GROUP 1 PRESENTATION:

EARNED VALUE MONITORING

Specialization 3
Construction project management, completion phase

PRESENTED BY B.S. ARCH 5A

AGUSTIN, MARVIN B.
DHARIWAL, PRINCE AJIT SINGH D.
LASAM, DANIEL A.
SANTIAGO, JOHARIKO A.
SALADINO, RIANNE ANGEL E.
SORIANO, JOHN MICHAEL ANGELO E.
TUNGPALAN, KENNETH M.

MARCH 2024
 highlights

I. Earned Value - Overview

II. Earned Value - Definitions
III. Earned Value - Metrics
IV. Earned Value - Variance & Management
V. Earned Value - Examples (including revised estimates)
VI. Earned Value - Criteria

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EARNED VALUE MONITORING
what is earned value monitoring?

Earned value monitoring

Earned Value Monitoring is a project management technique used to
track the progress and performance of a project by comparing the
actual work completed (earned value) with the planned work and costs
(planned value) and the actual costs incurred (actual cost). It's often
utilized in Specialization 3 subjects, particularly in fields like engineering,
construction, software development, and other project-based industries.

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 Current project challenges

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 earned value - overview

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 earned value (why & what)

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 earned value - benefits

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 earned value - criticism
The time required for data measurement and manipulation can be considerable.
Qualifying/measuring work-in-progress (WIP) can be challenging.
Integration of financial expenditure information with schedule status.
adhere to project management best-practices
Baseline your schedule
Analyze variance from your expectations
Diligently update your schedule and expenditure
Understand work products produced by the project
Organize your estimation and schedule around work products

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 earned value - definitions

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earned value monitoring, several key metrics are used:

1. Planned Value (PV): Also known as Budgeted Cost of Work Scheduled

(BCWS), PV represents the authorized budget assigned to scheduled
work for a specific period or task.
2. Earned Value (EV): Also known as Budgeted Cost of Work
Performed (BCWP), EV represents the value of the work actually
completed and is typically measured in terms of the budget assigned
to that work.
3. Actual Cost (AC): Also known as Actual Cost of Work Performed
(ACWP), AC represents the actual costs incurred for the work
completed during a specific period.

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 earned value - ac, pv, ev

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 earned value - cost/schedule + or -

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 earned value - metrics

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 cost metrics

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 cost metrics

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 earned value metrics

Minimum funds needed if things do not get worse

Minimum funds = Original total budget divided by CPI
Funds needed if things continue to get worse at the same level of
slippage
Funds needed = Original total budget divided by (CPI x SPI)

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 earned value - Variance & management reserve

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 variance - sv & cv illustration

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 variance - do you know
What is the problem causing the variance?
What is the impact on other efforts, if any?
What corrective action is planned or under way?
What is the impact on time, cost & performance?
What are the expected results of the corrective action?

variance - depends on...

Estimate type
Life-cycle phase
Length of project
Accuracy of estimate
Length of life-cycle phase
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 management reserve

The padding added to a project for unexpected costs that are within
the project scope
1. NOT an allowance for changes to scope
2. NOT part of the cost estimate
Added by upper management, NOT the project manager.

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 earned value - example

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 example - budget, schedule, tasks

Project Budget = $40,000

Schedule = 4 months
Tasks = 20 Tasks (evenly divided over 4 months)
1. $2,000 per task
2. 5 tasks per month
Planned Value or BCWS = $10,000/month
Invoice - 1st Month Payment = $8,000
Actual Cost or ACWP
Work Completed - 1st Month, 3 tasks costing = $8,000 as against
$6,000 ($2,000 x 3)
Earned Value or BCWP = $6,000

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 comparison - pv, ac & ev

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 cost performance indicators

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earned value - example (Utilizing Revised Estimates)

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 example - latest revised estimate
Total budget (BAC) = $5,000
Work schedule (PV) = $2,000
Work accomplished (EV) = $1,800
Actual cost (AC) = $2,400
Latest Revised Estimate (LRE) = $5,600
TCPI (To Complete Cost Performance Index)
CPI = EV/AC ($1,800 / $2,400) = 0.75
TCPI (at BAC) = Work Remaining (BAC - EV)/ Budget Remaining (BAC - AC)
TCPI (at BAC) = ($5,000 - $1,800)/$5,000 - $2,400) = 1.23
TCPI (at LRE) + Work Remaining (BAC - EV)/Estimate Remaining (LRE-AC)
TCPI (at LRE) = $5,000 - $1,800)/$5,600-$2,400) = 1.00
Based on the LRE ($5,600), the project will come on budget (1.00) & revised estimate
appears reasonable.

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 earned value - success criteria

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 criteria

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 ”The three great essentials to achieve anything
worth while are, first, hard work; second,
stick-to-itiveness; third, common sense.”

- thomas edison

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THANK YOU FOR
LISTENING!