ARIBA implementation

Assignment Requirement
Your team has been assigned to help Christopher Martin determine what went wrong with
the project and develop a presentation and recommendation for Terry Baker.

1. Which of the two components is underperforming according to the plan? How do you
know this?

Based on the article, the TWO major components of the project are, (1) Technical
Infrastructure (TI) setup and (2) Software Customization (SC).

Martin realizes that base on the Microsoft Project Gantt chart, he could not find out
which component is responsible for the delay. He figured out that, using data obtained
from his project staff, and by creating Earned Value Analysis, he could find which
component causing the delay.

Earned Value Analysis will give him 4 project performance indicators, which is:

• Schedule Variance (SV)

SV shows deviation from schedule. Negative means behind schedule. Positive
shows that you are ahead of schedule.

• Schedule Performance Index (SPI)

SPI shows at what percent the project progress compared to planned
performance.

• Cost Variance (CV)

CV shows deviation from the planned budget as of now. Negative means the
project are overspending. Positive shows that the project is under budget.

• Cost Performance Index (CPI)

CPI states how much the project spend to earn 1 dollar of value. Greater than 1
means the project earn 1 dollar of value for less than a dollar of actual costs.

Using the given Earned Valued Analysis template, here is the calculated results, base on
information received from Martin’s project staff.

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SC Monthly Plan MAY JUN JUL AUG SEP

Monthly Status Plan BCWS 120,000 192,000 192,000 192,000 192,000
Actual Burn ACWP 119,000 187,000 165,000 189,000 186,000
Actual Perform BCWP 133,250 197,000 220,000 215,000 240,000
Rolling RATIOS Schedule Impact SV = BCWP - BCWS 13,250 5,000 28,000 23,000 48,000
SPI = BCWP / BCWS 1.1104 1.0260 1.1458 1.1198 1.2500
Cost Impact CV = BCWP - ACWP 14,250 10,000 55,000 26,000 54,000
CPI = BCWP / ACWP 1.1197 1.0535 1.3333 1.1376 1.2903
Control RATIO CR = SPI x CPI 1.2434 1.0809 1.5278 1.2738 1.6129

TI Monthly Plan MAY JUN JUL AUG SEP

Monthly Status Plan BCWS 120,000 192,000 192,000 192,000 192,000
Actual Burn ACWP 120,000 215,000 192,000 216,000 170,000
Actual Perform BCWP 120,000 170,000 173,000 190,000 185,000
Rolling RATIOS Schedule Impact SV = BCWP - BCWS 0 -22,000 -19,000 -2,000 -7,000
SPI = BCWP / BCWS 1.0000 0.8854 0.9010 0.9896 0.9635
Cost Impact CV = BCWP - ACWP 0 -45,000 -19,000 -26,000 15,000
CPI = BCWP / ACWP 1.0000 0.7907 0.9010 0.8796 1.0882
Control RATIO CR = SPI x CPI 1.0000 0.7001 0.8119 0.8705 1.0486

** Note: Value below 1 marked with Red font.

Using calculated results from Earned Value Analysis above, the project performance
can be summarized as follow:

Indicator Software Customization (SC) Technical Infrastructure (TI)

SV All SV shows POSITIVE values All SV show NEGATIVE values

Other than value in May, SPI values
SPI All SPI values are GREATER THAN 1
is LESS THAN 1
CV values is exactly 0 in May,
CV All CV shows POSITIVE values NEGATIVE in June, July, and August,
but POSITIVE in September
Other than value in May, CPI values
CPI All CPI values are GREATER THAN 1
is LESS THAN 1

Conclusion, based on the calculation in Earned Value Analysis and summary of it above,
we can conclude that Technical Infrastructure component implementation is BEHIND
the schedule and OVER the estimated budget. While Software Customization
implementation is AHEAD of the schedule and UNDER the estimated budget.

Therefore, between both components, Technical Infrastructure component is the

component underperforming according to the actual plan.

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2. Are the components of the project within the budget? How do you know?

To determine whether both components of the project within the budget, we have to
look at the calculated values of Cost Variance (CV). Using again Earned Value Analysis
above, the results reveal that, all CV shows POSITIVE values for Software Customization
component, and exactly 0 in May, NEGATIVE in June, July, and August, and only POSITIVE
in September for Technical Infrastructure component.

Therefore, we can conclude that Software Customization component is UNDER the

estimated budget, while Technical Infrastructure component is OVER the estimated
budget.

3. What can you conclude by looking at the combined earned value data for the
project?

Result of combine earned value of the project can be seen below:

Combine Project Monthly Plan MAY JUN JUL AUG SEP
Monthly Status Plan BCWS 240,000 384,000 384,000 384,000 384,000
Actual Burn ACWP 239,000 402,000 357,000 405,000 356,000
Actual Perform BCWP 253,250 367,000 393,000 405,000 425,000
Rolling RATIOS Schedule Impact SV = BCWP - BCWS 13,250 -17,000 9,000 21,000 41,000
SPI = BCWP / BCWS 1.0552 0.9557 1.0234 1.0547 1.1068
Cost Impact CV = BCWP - ACWP 14,250 -35,000 36,000 0 69,000
CPI = BCWP / ACWP 1.0596 0.9129 1.1008 1.0000 1.1938
Control RATIO CR = SPI x CPI 1.1181 0.8725 1.1266 1.0547 1.3213

By looking at the combined earned value, we can see that all most of the indicator show
POSITIVE results except in the month of June. Therefore, based on this information, we
can conclude that if the data from both components combines, the project appears to
be WITHIN and UNDER the estimated budget and implemented AHEAD of the schedule.

4. Why did Terry Baker think that the project was going according to plan the entire
time?

Terry Baker thinks that the project was according to plan because of:
• Christopher Martin the Project Manager did not communicate the problems he
faced and not comfortable reporting it to her.
• She has been reviewing the budget variance and combine earned value reports
and everything is thought to be fine, but unaware that if the project components
earned value calculated separately, she will see there is delays in Technical
Infrastructure component project implementation.

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• Add more (if any)

• Add more (if any)

5. How much longer will the project take?

To calculate how many additional days for the project to be completed, several
information from the project needs to be identified:
• No. of days for project completion based on schedule from May to September.
= May (31d) + June (30d) + July (31d) + August (31d) + September (30d)
= 153 days
• Since only Technical Infrastructure component causing the delay, and both
components are independent from each other, therefore the required
completion days only taken from the requirement from Technical Infrastructure
component
• Schedule Performance Index (SPI) for Technical Infrastructure component in
September is 0.9635.
• Numbers of additional days can be calculated by dividing no. of days (until
September) with SPI in September
Therefore, number of additional days required the project will take is.

(153/0.9635) – 153 = 5.79 @ 6 days

6. What should Martin have done earlier in the project timeline to prevent delays?

In our opinion, Martin should:

• Followed the Gants chart and create Earned Value Analysis (EVA) monthly report
to track and identify potential problems.
• Performing EVA in monthly basis will helped him identify which activities is ahead
or behind schedule.
• When facing certain problems such as delays in Sun server delivery and system
testing running, he should consider ‘crashing’ some of the activities.
• Add more (if any)
• Add more (if any)

7. What should Martin do when managing future projects to prevent similar problems
from developing?
• Progress meeting should be held in regular basis with vendors and involved
parties.
• Improve and manage effective communication within key project members.
• Have a clear and establish project scope and objectives.
• Have a clear resources management reports.
• Add more (if any)
• Add more (if any)

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