Q N U Earned Value Management They Say I have to Do It, But Why??? By Ursula Kuehn, PMP, EVP UQN and Associates.

QNU

Earned Value Management They Say I

have to Do It,But Why???

By Ursula Kuehn, PMP, EVPUQN and Associates

QNU History of EVMS

• 1962-1965 PERT/Cost on Minuteman Missile• 1965 USAF created CSPCS (35 criteria)• 1967-1996 DOD issued C/SCSC (35 same

criteria)• 1996 DOD EVMS (NDIA initiative) (32 criteria)

• 1998 ANSI/EIA-Standard 748 (32 same criteria)

QNU

What Size of Project Requires EVMS?

• DoD requires on projects > $20M• DoT requires on projects > $6M• Dept. of Ed. requires on projects > $2M,

with a lighter version for projects < $2M

Do we see a trend?

QNU

10 Easy Steps for EVMS on all Projects

1. Define the project scope via a WBS2. Determine who will perform the work and

what it might cost3. Plan & schedule the defined work for the

agreed upon scope4. Determine points of management control5. Authorize budgets for the baselined plan

Adapted from Earned Value Management Project Management, Third Edition, Fleming and Koppelmen

QNU

10 Easy Steps for EVMS on all Projects (continued)

6. Define metrics to measure performance of work within each control point

7. Record actual costs of the work8. Measure control point performance and

determine project performance9. Forecast future performance10.Manage changes to the agreed upon

baseline

QNU Step 1

Define the project scope via a Work Breakdown Structure

QNU The WBS

Ursula’s Pond

Hole Liner Water Livestock Plants Test Pond

Design Pond

Project Management

QNU

Hole

Move Earth

Trees PlantsDisposal Equipment

Earth

Removal Equipment

Environmental Study

Earth Removal Earth Disposal

Garden

Take the Requirements Analysis to the Hole of the

Pond

QNU

Water

Water In Water Removal

Water Circulates

Take the Requirements Analysis to the Water of the

Pond

QNU Step 2

Determine who will perform the work and what it might cost

QNU $113.85

$71.35

$2.50$68.85

$93.45

$23.45$45.00$25.00

$50.00

$42.50

$2.50

$140.45

$40.00$7.50$107.95$25.00

$102.50

$17.50$60.00$25.00

$531.00

$30.00$90.00$411.00

$35.00

$136.95

$17.50$2.50$91.95$25.00

$240.20

$109.35$64.35$25.00

$41.50

$2.50$106.85$2.50$61.85$2.50$39.00

Pond

1234

Plants

1234.5

Livestock

1234.6

Water

1234.4

Rock Border

1234.7

Liner

1234.3

Pump

1234.8

Hole

1234.2

Inspect Pond

1234.9

Design Pond

1234.1

Design Hole

1234.2.1

Dig Hole

1234.2.2

Inspect Hole

1234.2.3

Design Liner

1234.3.1Buy Liner

1234.3.2

Install Liner

1234.3.3

Fill Pond

1234.4.2

Test Water

1234.4.3

Design Water

1234.4.1

Bog Plants

1234.5.3

Floating Plants

1234.5.4Oxygenating Plants

1234.5.2

Design Plants

1234.5.1

Install Oxy. Plants

1234.5.2.2

Buy Oxy. Plants

1234.5.2.1

Buy Bog Plants

1234.5.3.1

Install Bog Plants

1234.5.3.2

Buy Floating Plants

1234.5.4.1

Install Floating Plants

1234.5.4.2

Fish

1234.6.1

Snails

1234.6.2

Buy Fish

1234.6.1.1

Install Fish

1234.6.1.2

Install Snails

1234.6.2.2

Buy Snails

1234.6.2.1

Build Waterfall

1234.7.3

Buy Rock

1234.7.1

Install Border

1234.7.2

Buy Pump

1234.8.2

Install Pump

1234.8.3

Design Pump

1234.8.1

Test Waterfall

1234.8.4

$1,743.55

QNU Step 3

Plan & schedule the defined work for the agreed upon

scope

QNU

Planning and Scheduling the Defined Work

END

Work Package G

24

22

0

16 21

15 20

14 21

14 21

22 24

18 20

21

21 24

6

14

6 14

6 10

10 14

7 16

6 15

6

6

0

15 18

19

Work Package I

Work Package H

Work Package E

Work Package F

Work Package B

Work Package C

Work Package D

Work Package A

QNU Step 4

Determine points of management control

QNU $113.85

$71.35

$2.50$68.85

$93.45

$23.45$45.00$25.00

$50.00

$42.50

$2.50

$140.45

$40.00$7.50$107.95$25.00

$102.50

$17.50$60.00$25.00

$531.00

$30.00$90.00$411.00

$35.00

$136.95

$17.50$2.50$91.95$25.00

$240.20

$109.35$64.35$25.00

$41.50

$2.50$106.85$2.50$61.85$2.50$39.00

Pond

1234

Plants

1234.5

Livestock

1234.6

Water

1234.4

Rock Border

1234.7

Liner

1234.3

Pump

1234.8

Hole

1234.2

Inspect Pond

1234.9

Design Pond

1234.1

Design Hole

1234.2.1

Dig Hole

1234.2.2

Inspect Hole

1234.2.3

Design Liner

1234.3.1Buy Liner

1234.3.2

Install Liner

1234.3.3

Fill Pond

1234.4.2

Test Water

1234.4.3

Design Water

1234.4.1

Bog Plants

1234.5.3

Floating Plants

1234.5.4Oxygenating Plants

1234.5.2

Design Plants

1234.5.1

Install Oxy. Plants

1234.5.2.2

Buy Oxy. Plants

1234.5.2.1

Buy Bog Plants

1234.5.3.1

Install Bog Plants

1234.5.3.2

Buy Floating Plants

1234.5.4.1

Install Floating Plants

1234.5.4.2

Fish

1234.6.1

Snails

1234.6.2

Buy Fish

1234.6.1.1

Install Fish

1234.6.1.2

Install Snails

1234.6.2.2

Buy Snails

1234.6.2.1

Build Waterfall

1234.7.3

Buy Rock

1234.7.1

Install Border

1234.7.2

Buy Pump

1234.8.2

Install Pump

1234.8.3

Design Pump

1234.8.1

Test Waterfall

1234.8.4

$1,743.55

QNU Step 5

Authorize budgets for the baselined plan

QNU

Allocating the Budget

Work Package G

$3,000

24

22

END0

16 21

15 20

14 21

14 21

22 24

18 20

21

21 24

6

14

6 14

6 10

10 14

7 16

6 15

6

6

0

15 18

19

Work Package I$2,000

Work Package H

$3,000

Work Package E

$7,000

Work Package F

$5,000

Work Package B

$8,000

Work Package C

$4,000

Work Package D$9,000

Work Package A

$6,000

QNU Baseline the Plan

Performance Measurement Baseline (PMB)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

1 2 3 4 5 6 7 8 9 1011 121314 151617 181920 212223 2425

Day

QNU Step 6

Define metrics to measure performance of work within

each control point

QNU How to Measure Progress

• Effort/(Effort + Remaining)• Physical % Complete• Weighted Milestones or

Inchstones• 50/50 Rule, 20/80 Rule, 0/100

Rule• Others, all used to determine a

% Complete

QNU Step 7

Record actual costs of the work

QNU Collecting Actual Cost (AC)

• Timesheets• Invoices• Other Expenses

QNU Step 8

Measure performance and determine project performance

QNU The Planned Value (PV)

24

22

END0

16 21

15 20

14 21

14 21

22 24

18 20

21

21 24

6

14

6 14

6 10

10 14

7 16

6 15

6

6

0

15 18

19

Task I$2,000

Task H$3,000

Task E$7,000

Task F$5,000

Task G$3,000

Task B$8,000

Task C$4,000

Task D$9,000

Task A$6,000

QNU The PV Continued

Task Total Task Budget Planned Value (PV)As of Day 10

A $6,000.00 $6,000.00

B $8,000.00 $4,000.00

C $4,000.00 $4,000.00

D $9,000.00 $4,000.00

Project $47,000.00 $18,000.00

QNU The PV Continued

Performance Measurement Baseline (PMB)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

1 2 3 4 5 6 7 8 9 1011 121314 151617 181920 212223 2425

Day

Data Date

QNU Earned Value (EV)

workwork Budget x Complete %EV

QNU The EV Continued

Task Total Task Budget Planned Value (PV)As of Day 10

% Comp

Earned Value (EV)As of Day 10

A $6,000.00 $6,000.00 100% $6,000.00

B $8,000.00 $4,000.00 25% $2,000.00

C $4,000.00 $4,000.00 75% $3,000.00

D $9,000.00 $4,000.00 50% $4,500.00

Project $47,000.00 $18,000.00 $15,500.00

QNU EV Analysis

Performance Measurement Baseline (PMB)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

1 3 5 7 9 11 13 15 17 19 21 23 25Day

PMB

EVAC

QNU Variances

PVEV(SV) Variance Schedule

ACEV(CV) VarianceCost

Positive Negative

SV Ahead of schedule Behind schedule

CV Under budget Over budget

QNU Cost Variance

Performance Measurement Baseline (PMB)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

1 3 5 7 9 11 13 15 17 19 21 23 25Day

PMB

EVAC

CV

QNU Performance Indexes

PV

EV(SPI)Index ePerformanc Schedule

AC

EV(CPI)Index ePerformancCost

QNU EVA Examples

PV = $45,000

EV = $35,000

AC = $40,000

SV = -$10,000

CV = -$5,000

SPI = 0.78

CPI = 0.86

PV = $145,000

EV = $135,000

AC = $140,000

SV = -$10,000

CV = -$5,000

SPI = 0.93

CPI = 0.96

QNU

.79.94.83

.92

.96

1.00

.87

.92

.99

.921.03.98

.98Pond

1234

Plants

1234.5

Livestock

1234.6

Water

1234.4

Rock Border

1234.7

Liner

1234.3

Pump

1234.8

Hole

1234.2

Inspect Pond

1234.9

Design Pond

1234.1

Design Hole

1234.2.1

Dig Hole

1234.2.2

Inspect Hole

1234.2.3

Design Liner

1234.3.1Buy Liner

1234.3.2

Install Liner

1234.3.3

Fill Pond

1234.4.2

Test Water

1234.4.3

Design Water

1234.4.1

Bog Plants

1234.5.3

Floating Plants

1234.5.4Oxygenating Plants

1234.5.2

Design Plants

1234.5.1

Install Oxy. Plants

1234.5.2.2

Buy Oxy. Plants

1234.5.2.1

Buy Bog Plants

1234.5.3.1

Install Bog Plants

1234.5.3.2

Buy Floating Plants

1234.5.4.1

Install Floating Plants

1234.5.4.2

Fish

1234.6.1

Snails

1234.6.2

Buy Fish

1234.6.1.1

Install Fish

1234.6.1.2

Install Snails

1234.6.2.2

Buy Snails

1234.6.2.1

Build Waterfall

1234.7.3

Buy Rock

1234.7.1

Install Border

1234.7.2

Buy Pump

1234.8.2

Install Pump

1234.8.3

Design Pump

1234.8.1

Test Waterfall

1234.8.4

QNU

Project Control Chart

0.800.850.900.951.001.051.101.151.20

1 3 5 7 9 11 13 15 17 19 21 23

Day

CPI

SPI

Basing Your Stoplight on Your CPI

QNU Step 9

Forecast future performance

QNU

The Estimate At Completion (EAC)

• Forecasts possible project outcome based on past performance

– Calculating the EAC with just the CPI

– Calculating the EAC with both the CPI and SPI

CPI

BACEAC

SPICPI

)EVBAC(ACEAC

Note: EAC always has the caveat “…if things do not change…”

QNU

Other Forecasting Formulas

• The estimate to complete (ETC)

• The variance at completion (VAC)

• The to-complete performance index (TCPI)

EACBACVAC

ACEACETC

ACBAC

EVBACTCPI

QNU Step 10

Manage changes to the agreed upon baseline

QNU

The Change Control Process

• Establish a change control board (CCB)

• Require the use of change request forms

• Keep a change control log

• For each approved change, a new PMB is established

QNU Conclusion

Earned Value ManagementIs

Project Management