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ISB-ITPM-Assignment 8.2
ISB-ITPM-Assignment 8.2
➢ The Ariba Implementation at MED-X case is designed to teach students how to analyze a
program that is experiencing problems and recommend solutions. Specifically , the case
introduces students to earned value analysis and program oversight for an e-procurement
technology program. The case centers on MED-X’s need to quickly discover why the company’s
e-procurement implementation project was not going according to plan. Once a cause has
been discovered students will need to make a recommendation to fix the problem. Data for the
simplified program, consisting of two concurrent projects, is given to students in the case, who
should in turn analyze the project using earned value analysis.
➢ The case is an easy introduction to program management and oversight for executives and
MBA students, and teaches the essentials of earned value project management.
PURPOSE
Purpose
➢ For the purpose of the case, the complex program was simplified to two
parallel projects: a software project and a hardware infrastructure project.
➢ Earned value data for the two projects are given to students, who should in
turn analyze the plan using Excel and make recommendations.
“Chris, what do you mean, we can’t deploy the system on time? It’s a month before the end of the project
and now you’re telling me that we may not deploy on time! Do you know what this means? Don’t you
understand what the implications are? I don’t understand what went wrong. This entire time I have been
reviewing the budget variance and combined earned value reports and everything appeared to be fine. How
am I going to explain this to the steering committee? I want to know what went wrong with the project and
➢ Terry Baker, CIO of MED-X Inc., a Fortune 500 pharmaceutical company, was furious. Thee-procurement
implementation she had been sponsoring was not going according to plan and the project manager had
➢ Christopher Martin, a consultant from Implementation Technologies, was the project manager for the $2
million Ariba e-procurement implementation at MED-X Inc. This was Martin’s first time managing a full-
life-cycle e-procurement implementation and he was having problems figuring out what was delaying the
project. He had been aware of some potentially troublesome events early in the project, but had not been
➢ Martin was very bright, had a great deal of technical development experience, and knew Ariba
functionality well. He was just completing his MBA in the manager’s program at the Kellogg School of
Management, and was looking forward to a big raise when this project was over. However, Martin knew
very little about earned value and ha d never seen it used in project analysis before. His client Terry Baker
was demanding answers and Martin had to figure out what was going wrong.
➢ The Ariba implementation was broken up into several phases. However, the critical path went through two
major components of the project: technical infrastructure setup and software customization. Looking at
the project plan alone, Martin could not figure out which component was causing the delay.
Exhibit 3
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8 – Earned Value Analysis Template
Exhibit 8 – Earned Value Analysis Template (Continued)
Exhibit 8 – Earned Value Analysis Template (Continued)
CASE QUESTIONS
Case Questions
➢ The analysis involves looking at the project plan and determining the best
course of action.
➢ Students will also quantitatively determine the project completion date and
costs.
➢ They should use the EVA spreadsheet templates so their basic analysis
follows a simple format
Introduction to Earned Value Management
➢ A major challenge for managers is to track the progress of IT projects. This can be difficult when the number of
projects for a large firm may exceed one hundred.
➢ Earned value program management is a systematic approach to integrating the measurement of costs,
schedule, and scope. It also allows managers to quickly determine the status of projects under their
supervision.
➢ Earned value program management allows the manager to answer the following questions objectively:
➢Where have we been?
➢ Traditional forms of program management track only two data sources: budgeted costs and actual costs.
➢ By comparing these two items, one can only determine what has been spent versus what was planned to be
spent. The method does not take into account what has actually been produced. Thus, one cannot determine
what has been produced for the money spent or if the project is on schedule.
➢ In essence, the true performance of the project cannot be measured using the traditional methods.
Introduction to Earned Value Management
In earned value program management there are three data sources: the budgeted cost of work scheduled, the
actual cost of work scheduled, and the budgeted cost of work performed or the earned value. This technique
allows managers to determine the schedule and cost variance for the project. Both the traditional method and
the earned value method show the manager how much money was spent at any given time during the project.
However, earned value provides the manager with additional key pieces of information:
➢ first, how much work has been completed to date for the funds spend, and
➢ second, what the total job cost will be and how long it will take to complete the job.
The key obstacle in implementing earned value program management is measuring what has been
accomplished, or the budgeted cost of work performed. Many organizations are not set up to record this critical
piece of information in a timely manner. The implementation of a reliable and accurate system of recording the
budgeted cost of workperformed is an absolute must for the use of earned value program management.
The first task for the participants will be to take the data from Exhibits 5, 6, and 7 from the case
and insert it into the EVA template (Exhibit 8 from the case). If the data are entered correctly, the
students’ resulting figures should be identical to those presented .
(see Exhibit TN3 through Exhibit TN5).
Exhibit 5 – Budgeted Cost of Work Scheduled (BCWS)
Exhibit 6 – Actual Cost of Work Performed (ACWP)
Exhibit 7 – Budgeted Cost of Work Performed (BCWP)
Exhibit 8
Exhibit 8 (Continued)
Exhibit 8 (Continued)
CASE QUESTION SOLUTION
Case Question-1 Solution
➢ Two major components of the project, software customization and technical infrastructure setup lie on the
critical path. The Project Manager is not clear which component is causing the delay. Which component of the
project is underperforming?
➢ Compute :
➢ If you were to estimate in September, how much longer will the underperforming project take?
➢ Compute :
2. Subtract SPI from 100 namely (100 – SPI). This will give in percentage how much the project is behind
3. Based on a 6 month or 24 week project multiply the number obtained from Step 2 * 24 to get the final
answer
Thank You
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