Connoizor Enabling Performance for Businesses through Software Website: Contact: [email protected]@connoizor.com.

ConnoizorEnabling Performance for Businesses through Software

Website: www.connoizor.comContact: [email protected]

Effective Project Management using Earned Value Management

Author: Sham Dayal VD, PMP

http://www.connoizor.com/

mailto:[email protected]

Introduction• Project Managers across the world face huge problems in managing projects.

• They are often faced with challenges of projects incurring a Cost Overrun and a Schedule Overrun apart from other project management challenges.

• Most often than not they realize this only after the project has reached the end or has been terminated due to these reasons.

• Though both the client and the vendor are party to this, Project managers often do have objective evidence to this.

• Project managers spend huge amounts of time and energy in preparing, updating and showing status of the project at any point in time.

• There are tasks which go on hold many times before it is completed due to the dependencies with the client. But we as project managers do not have a good mechanism to account for these delays and report the actual schedule or cost overruns.

• Earned value Management technique coupled with good planning and effective use of the Microsoft Project Plan will eliminate the problem faced and we will be able to report the actual schedule and cost parameters at any given point in time with ease.

• As part of this effort we have created a template which would enable any project manager to apply the earned value management technique in managing projects. We have also prepared guidelines on how to use the Microsoft Project Plan to enable tracking using earned value management technique.

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General Problems faced in the Projects

• Deliverables being reported as having Schedule Overrun/Effort Overrun after they have been delivered to the client.

• Overall Project Schedule Overrun/Effort Overrun is not known until the Project is completed.

• Schedule Overrun/Effort Overrun for the Project is being calculated as Average of the Schedule Overrun of the Deliverable Tasks which gives a wrong impression.

• At any given point in time there is no information available on the Schedule and Effort Parameters.

• Schedule Overruns calculated had no way of excluding the Hold on a task in the calculations resulting in huge Schedule Overruns which actually should not be attributed to the Project.

• Resource Linkages using the Predecessor field is the most time consuming activity.

• Project Plan updates taking almost half the Project Managers time.

• Project Plan monitoring becoming a tedious job by using Filters in the MPP and having to deal with the Dates for any calculations.


Solution to be Implemented

• Earned Value Management with Efforts being considered in place of Cost.

• Deliverable oriented WBS.

• Using the Priority field of the Tasks for sequencing the tasks.

• Automatic Resource Leveling in MPP based on Priority and Standard Leveling heuristics.


Benefits• Applications can be monitored as they progress and preventive/corrective actions can

be taken. In the below example (Figure -1) some of the summary activities have a negative schedule and cost variance which means that these tasks need special monitoring.


Benefits• Overall Project Schedule/Effort Parameters available at any given point in time

allowing the Project Manager to take preventive/corrective action. In the below given example (Figure – 2) if you notice there is a negative Schedule variance which means that the project is behind schedule so corrective action needs to be taken. Similarly we have a positive Cost Variance which means that we are running under budget which is good but needs monitoring.


Benefits• Schedule and Effort Overruns being calculated correctly with the Cost rolled up to the

Summary Tasks and Available on click of a button in the Microsoft Project Plan. In the Figure - 2 above, you can see that the schedule and cost variances are available at all levels. This helps in monitoring the tasks independently.


Benefits• Dealing with Numbers (Figure – 2) is easy and better to deal with than Dates (Figure –

3). In the Figures – 2 & 3 you can see that one is the earned value screen and the other is the traditional screen with the dates. It is very imperative that handling the dates is difficult as you would have to remember the dates to check whether the project is on schedule or behind schedule. Moreover this does not give you any indication of the effort/cost parameters.


Benefits• By introducing Holds in the Microsoft Project Plan as shown in the Figure – 4 below,

the Hold period can be discarded from the calculation of the Schedule Overruns. This would help in two ways, one you have a track of the delays caused by factors which are not in the control of the project team and second you have the right numbers to report for the schedule and cost parameters. All you need to do is introduce a new task in the Microsoft Project Plan and re-baseline the new task with all its summary tasks and by assigning a higher priority to the task would ensure that the hold is scheduled first before other tasks are scheduled.


Benefits• Project Plan updates reduced to 1 hr in a week from half the Project Managers time. • Project Plan Monitoring made simple by Earned Value Analysis at any level (Summary

Level/Activity Level) of the Project (Figure – 6).


Benefits• Projects being delivered almost on Time and Under Budget (Figure – 7).


Help on Abbreviations


BAC (t-wks) Budget At Completion (Time) How much Time is the entire Project Budgeted for?

SV(t-wks) Schedule Variance (Time) How much ahead or behind Schedule is the Project?

SPI(t-wks) Schedule Performance Index (Time) What is the efficiency of the time utilised on the Project?

EAC(t-wks) Estimate at Completion (Time) What is the estimate complete the remainder of the Project?

CV Cost Variance How much over or under budget are we on the Efforts?

CPI Cost Performance Index. How effectively are we using our resources ?

TCPI To Complete Cost Performance Index. How efficiently must we use our remaining resources?

TSPI To Complete Schedule Performance Index. How efficiently must we use our remaining Time?

BAC Budget At Completion (Effort) How much efforts is the entire Project Budgeted for?

EAC(effort) Estimate at Completion (Effort) What is the estimated efforts at the completion the Project?

VAC Variance At Completion What would be the variance in efforts at the end of the Project?

ETC Estimate to Complete What would be estimated hours to complete the remaining work?

Source: Practice Standard for Earned Value Management, Copyright PMI.

Benefits• Improved Customer Satisfaction since the Progress is presented to the customer

using the Earned Value Techniques on a periodical basis as the project progresses (Figure – 8).


Benefits• Forecasting of the Efforts Required and Time Required gives a clear picture of how

the Project will end (With/Without Schedule Overruns/Effort Overrun) (Figure – 9).


Benefits• Forecasting of the Efficiency parameters required to complete the Project On Time

and Under Budget gives the Project Manager a hint of whether he should charge the team up in his next Team Meeting or be subtle (Figure – 10/11).


Benefits


Benefits• Trends in the Efforts/Schedule Parameters (Figure – 12) indicates to the Project

Manager whether a serious action needs to be taken or a subtle mention in the Team Meeting would suffice.


Benefits• Total Control of the Project from the beginning to the end (Figure – 13).


End

Thank You.


Connoizor Enabling Performance for Businesses through Software Website: Contact: [email protected]@connoizor.com.

Documents

project managers time

effective project management

project management challenges

introduction project

microsoft project plan

project plan monitoring

project plan updates

actual schedule