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What Is It ?
Why Do I Need It ?
How Do I Do It?
1
Todays Situation
2
Theres Room For Improvement
3
Source:The Standish Group
How to answer the question:
Have we done what we said wed do?
% complete estimating
% of Budget spent
% of work done
% of time elapsed
subjective,
incomplete
draws false
conclusions
4
Enter Earned Value Analysis
Earned Value Analysis is:
an industry standard way to:
measure a projects progress,
forecast its completion date and final cost, and
provide schedule and budget variances along the
way.
5
Whats More Important?
6
EVA Integrates All Three
7
Earned Value is needed because...
8
Earned Value is needed because...
9
And One More Reason
Why You Need EVA
?
10
Because It May Be Required!
11
OK, So What Is This Stuff?
12
So, Is This Stuff New ?
13
Examples of Informal Earned Value Analysis
Cost comparisons
Budget vs. Actual
14
Hows This Project Doing?
120000
100000
80000
Projected
60000
Actual
40000
20000
0
Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03
15
Lets Take A Look Under The Hood
16
But First! - We Must Get Organized
EVA works best when work is compartmentalized.
17
Proper WBS Design
19
WBS Units are Work Packages
20
Control Account Plans
PV Planned Value
AC - Actual Cost
EV Earned Value
22
Earned Value Definitions
23
PV Planned Value or Budgeted Cost of
Work Scheduled
120000
100000
80000
60000 BCWS
40000
20000
Nov-03
Jan-03
Jun-03
Jul-03
Feb-03
Mar-03
Apr-03
May-03
Aug-03
Sep-03
Dec-03
Oct-03
24
Earned Value Definitions (cont.)
25
ACWP - Actual Cost of Work Performed
120000
100000
80000
56000 BCWP
60000
ACWP
49000
40000
20000
Nov-03
Jan-03
Jun-03
Jul-03
Feb-03
Mar-03
Apr-03
May-03
Aug-03
Sep-03
Dec-03
Oct-03
26
Earned Value Definitions (cont.)
27
EV- Earned Value or Budgeted Cost of Work
Performed
120000
100000
80000
55000 BCWP
60000
49000 BCWS
40000
20000
Nov-03
Jan-03
Jun-03
Jul-03
Feb-03
Mar-03
Apr-03
May-03
Aug-03
Sep-03
Dec-03
Oct-03
28
The Whole Story
120000
100000
80000
56000 BCWS
60000 BCWP
55000
49000 ACWP
40000
20000
Nov-03
Jan-03
Jun-03
Jul-03
Feb-03
Apr-03
May-03
Aug-03
Sep-03
Dec-03
Mar-03
Oct-03
29
Some Derived Metrics
31
Some More Derived Metrics
SPI: EV/PV
49,000/55,000 = 0.891
CPI: EV/AC
49,000/56000 = 0.875
33
Making Projections
Once a project is 10% complete, the
overrun at completion will not be less
than the current overrun.
20000
Nov-03
Jan-03
Jun-03
Jul-03
Feb-03
Apr-03
May-03
Aug-03
Sep-03
Dec-03
Mar-03
Oct-03
35
Estimate to Complete
140000
120000 116,571
100000 102000
Today BCWS
80000
BCWP
60000
ACWP
40000
20000
0
03 03 03 3 3 0 3 4 04
n- r- y - l -0 p- 0
v- n-0 r-
Ja M
a
M
a Ju S e No J a M
a
36
A New Criteria
37
Value of Earned Value
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But How Do I Do All This Stuff ?
40
Shortcomings of Earned Value
41
Summary
EVA & EVMS will help reduce guesswork in:
Measuring performance
forecasting
Need to get beyond misleading measures of
progress.
Reasons to use EVA and EVMS:
Good project management practice
OMB requirement
Incorporate into contracts
42
Earned Value Resources
http://www.pmi.org/
http://www.acq.osd.mil/pm/
43
Earned Value Analysis
Questions/Discussion
44