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27-11-13 - Earned Value - Dave Fairhurst
27-11-13 - Earned Value - Dave Fairhurst
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Earned Value Performance Measurement
Time now
Budget
Cost
Actual
Time
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Starting point …Recording Progress
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Measuring using Manhours - example
After 10 days;
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What have we achieved on the Plan?
Schedule • What work has been started/completed?
• Real and measurable % progress
Good examples:
• Have you built as many rooms as you
planned to at this stage?
• Have you plumbed/wired as many rooms as
expected?
• Milestones achieved –we moved in on time!!
A bad example of progress is the double
glazing company is coming next week
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Progress…Underpinning Information
(Quantity Tracking)
We should use/provide underpinning information to
support our % progress complete figure e.g.
Drawings and documents produced
Numbers of cables, pipes, bricks, bottles of wine
Metres of Pipe types
Metres cubed of concrete
Items of equipment to install, i.e. kitchen cupboards,
dishwasher
Contractor programmes
Underpinning information removes any confusion, doubt,
or conflict when scrutinising performance
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Types of progress:
Staged Milestones
Actual % Complete – use of Quantity Tracking
Equivalent Units – Operational Performance via
MPS i.e. tonnes produced
Level of Effort – No Measurable Deliverables, i.e.
departmental personnel
Apportioned Effort – support to ‘doing’ tasks, i.e.
Project Management
Steps/Underpinning Schedule – Further detail to
enable progress to be ascertained
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How is Earned Value measured?
How much work should be Budgeted Cost for Work Scheduled (BCWS)
done? plan
schedule
budget
How much work is done? Budgeted Cost for Work Performed (BCWP)
accomplishment
value of plan that has been earned
How much did it cost? Actual Cost of Work Performed (ACWP)
Actuals
Accruals
What is the total job Current Baseline Budget At Completion (CB BAC)
supposed to cost in the Baseline scope
execution year? plus approved and implemented changes
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Earned Value Performance Measurement
BCWS
Time now
CB BAC
The value of the planned work
Cost
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Earned Value Performance Metrics
CPI & SPI
Under and over performance can be quantified using:
Cost Performance Index, CPI
Schedule Performance Index, SPI
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CPI & SPI
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Earned Value Performance Metrics
CV & SV
Under and over performance can be quantified using:
Cost Variance, CV
Schedule Variance, SV
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CV & SV
A positive CV or SV value indicates over-performance
i.e. ahead of schedule, below planned cost
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Good News or Bad News?
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Good News or Bad News?
BCWP
Earned
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Good News or Bad News?
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Good News or Bad News?
BCWP
Earned
Project 4 Are the SPI and CPI less than or
greater than 1
SPI? >1 <1
CPI? >1 <1
£ BCWS
Planned Cost
What action would you take?
ACWP
Actual Cost
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In Summary
Earned Value is a simple process if applied in the correct
manner
There are individuals who perpetuate the myth that
Earned Value is a complex process in order to create a
niche market
Earned Value is best performed at the project detail level
and if necessary rolled up
Avoid applying Earned Value in non Project
environments i.e. Level of Effort tasks, it adds no value
Other applications of the process can cause the
corruption of the practice, unnecessary manipulation and
the proliferation of complex equations and rules as
illustrated on the next slide
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Execution Year End Metrics
Year End EAC YE SV EAC (Baseline Carryover)
Current
Current Baseline EAC
Baseline BAC
Forecast Year
End SV
Cost
ACWP
Forecast Year
End BCWP
BCWS
BCWP
Slippage
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and finally
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