Earned Value & P6

Session ID#: 15429

A new perspective on project
performance and P6 usage.
Clearing up myths about EV

Prepared by:
Elaine Britt Krazer, PMP REMINDER
Align Projects, LLC Check in on the
COLLABORATE mobile app
WELCOME!

This is a subtitle or bulleted list

WHY EV?

360 perspective of progress

Balances the triple constraint
Identifies a common denominator for fidelity in reporting
Provides a common structure for governance
Gives the team a focus
EXAMPLE

THEME PARK TRANSPORT

EXAMPLE

THEME PARK TRANSPORT

5 STOPS
5 MILES
$1M PER MILE

BUDGET $5M

SCHEDULE 5 MONTHS
WITH ONE MILE PER MONTH
EXAMPLE

THEME PARK TRANSPORT

EXAMPLE

THEME PARK TRANSPORT

TEAM MEETING: Well, you wont
like me when you
see site photos

PM: I love you guys,

you are why we have
that award!
TEAM MEETING: We have
completed only 2
miles.

GAK!
Whiskey Tango
Foxtrot!
EARNED VALUE
It is about integrity,
Have you spent what you said you would BY THIS TIME?
Have you completed what you said you would BY THIS TIME?
IF we continue this trend, will we deliver what we said we would
OVER TIME?

Requires then,
A time-phased plan (schedule)
A spend plan over time (cost loaded schedule)
Regular intervals of progress reporting (status updates on cost
and schedule)
A report of physical, actual accomplished work & what remains?
A schedule that reflects actuals and planned information (exact
mirror of project work)
P6 REQUIREMENTS FOR EV

A time-phased plan (schedule)

A spend plan over time (cost loaded
P6 REQUIREMENTS FOR EV

A spend plan over time (cost loaded schedule)

Regular intervals of progress reporting (status updates on
cost and schedule)
A report of physical, actual accomplished work & what
remains?
A schedule that reflects actuals and planned information (exact
mirror of project work)
Schedule? Why does that affect Project
Outcomes?
Questions? Answers!

Update cycle too long

Its not attached to the reality
of the actual project
WHY NOT?!?!?!
Info not gathered correctly or
fully
Too cheap to buy a scheduler,
especially a good one
Scheduler role seen as
administrative, not analytic
Old school, not informed of best
practices or experienced a good
schedules effectiveness
Waste of money on P6
They dont want the project to
movebut projects DO move!

We assume we know dates, but P6

tells us dates we dont knowand it
is based on progress.

Tell P6 what you know, it tells you

what next before you know it.
So now we know we need P6 and a
schedulelets set it up!

Pre Work
Global Settings
All subsequent settings

REMINDER
Check in on the
COLLABORATE mobile app
Pre Work GET READY!

Industry, role, why P6 Chains

Strategic Plan Which projects to input
Contracts and type Settings and setup
Workflow (PROJECT not Improvements and cycle
PRODUCT) times
Roles for each step Training and security
Reports we rely on Admin settings, layouts,
Data we wish we had so we views, and communications
can make better decisions
Future plans for P6 Integrations, settings and
licensing
Cost decision
Risks, issues decision
Global settingsGET SET!

EPS-OBS alignment
Security
Summary data needs
Efficiency
Admin settings
Project and WBS templates (settings)
Resources, Roles
Codesa few is better than many
UDFnone is better than some
Costs prep
Risks, issues decision
Other settingsAIM!

Settings at global, eps, project, wbs,

activity, step, resource and USER
levels
Backups, restoration, training
Role-based step by step for each
part of the process
Serves as pilot for P6 setup
Serves as BOT
Previews for each level of the
organization WIIFM
Provides marketing opportunities for
the upcoming adoption
GO! (adopt it, use it, keep it clean!)

Use the process, even if it is a bad one

Data tells you what to fix or enhance
Data gives you proof to go to management
with requests
Follow input cycles with precision
Dont be afraid of the truth P6 tells
Baseline is stable, no project is
Stop light reports have red on them
Bad news gets worse
Schedule view = Site view
Respect the scheduler and schedule
Have a disciplined change system
Adoption elements

Senior, higher-level support

Licensing appropriate
Training is applicable, relevant, accessible and mandatory
Documentation available, guided, short, use-case, maintained
Management understands value, or is made to accept it
Users use it as prescribed
Users are heard in a forum
System is technically stable, speedy, available
Marketing is done ahead of time
As many team members as can be, should be
Meetings are not beatings and have no paper
Armed with
properly
configured P6,
you can clearly
see a path
through your
project
EV Calculations in P6

AC (ACWP) = Actual labor cost + Actual Non Labor Cost + Actual

Material Cost + Actual Expense Cost
Also Actual Total Cost
Cost Performance Index (CPI)
A CPI greater than 1 means that Earned Value is greater than the
actual amount spent. A CPI of less than 1 means that the Earned Value
is less the. n the actual amount spent.
CPI = EV / Actual Cost
Cost Variance (CV)
Cost Variance is the difference between the Earned Value and the
actual cost of that activity.
CV = EV - Actual Cost
EV Calculations in P6

Earned Value Cost (BCWP or EV)

Earned Value Cost (EV) is the portion of the budgeted total cost of the activity
that is actually completed as of the project data date. Also known as the
Budgeted Cost of Work Performed for the activity. The method for computing the
performance percent complete depends on the Earned Value technique selected
for the activity's WBS.
EV = BAC * Performance % Complete
Estimate At Completion (EAC)
EAC is the estimated cost at completion for the activity.

EAC = Actual Cost + ETC.

EV Calculations in P6

Estimate to Complete (ETC)

Estimate to complete is the estimated cost left to complete on the activity. The
calculation can be customized at the WBS level (On the 'Earned Value' tab in the
WBS view).

It can be computed as either:

ETC = Remaining Total Cost for the activity
ETC = PF * (BAC - EV)
Where 'PF' is a multiplier to weight the ETC calculation. This can be
either '1', '1/CPI' or '1/(SPI * CPI)' or user defined amount.
HOWEVER: the only one that takes the schedule into true
consideration is 1/(SPI * CPI)
EV Calculations in P6

Planned Value Cost (BCWS or PV)

Planned Value Cost (PV) is the portion of the budgeted total cost of the
activity that is scheduled to be completed as of the project data date
according to the baseline dates. Also known as the Budgeted Cost of Work
Scheduled for the activity. The Schedule % Complete specifies how much
of the activity's original duration has been completed so far based on the
baseline dates.

PV = BAC * Schedule % Complete

Schedule Performance Index (SPI)
An SPI greater than 1 means that Earned Value is greater than the Planned
Value. An SPI of less than 1 means that the Earned Value is less then the
Planned Value.

SPI = EV / PV
EV Calculations in P6

BAC
Uses Baseline Budgeted (Planned) Values or BAC depending
on settings at Enterprise level in Admin
If the 'Earned Value Calculation' is set to 'Budgeted Values with
Planned dates' or 'Budgeted Values with Current Dates':
BAC = BL Budgeted Labor Cost + BL Budgeted Non-Labor Cost + BL
Budgeted Material Cost + BL Budgeted Expense Cost.
If the 'Earned Value Calculation' is set to 'At Completion Values
with Current Dates':
BAC = BL At Completion Labor Cost + BL At Completion Non-Labor
Cost + BL At Completion Material Cost + BL At Completion Expense
Cost
Portfolio EV
Earned Value in P6
We appreciate your feedback and insight

Elaine Britt Krazer, PMP

Oracle certified implementation Specialist

Oracle Partner
www.AlignProjects.com

You may complete the session evaluation either

on paper or online via the mobile app