Topic 7-Monitoring and controlling-ISB-el

TOPIC 7:
PROGRESS AND PERFORMANCE

MEASUREMENT AND
EVALUATION
Monitoring and Controlling the project

EARNED VALUE
Instructor: Dr. Nguyen Thi Duc Nguyen, School of Industrial Management, HCMUT 1
Instructor: Dr. Nguyen Thi Duc Nguyen 1

CONTENTS
1. Introduction
2. Earned value Cost/Schedule System
3. Assignments
INTRODUCTION
Instructor: Dr. Nguyen Thi Duc Nguyen, School of Industrial Management, HCMUT
4

Project Monitoring System for Control
Information System Structure

What data are collected?
• Current status of project (schedule and cost)
• Remaining cost to compete project
• Date that project will be complete
• Potential problems to be addressed now
• Out-of-control activities requiring intervention
• Cost and/or schedule overruns and the reasons for them
• Forecast of overruns at time of project completion
Project Monitoring System-

(cont’d)
Information System Structure (cont’d)

Collecting data and analysis
• Who will collect project data?
• How will data be collected?
• When will the data be collected?
• Who will compile and analyze the data?
Reports and reporting
• Who will receive the reports?
• How will the reports be transmitted?
• When will the reports be distributed?

Project Progress Report Format
1. Progress since last report

2. Current status of project
Schedule
Cost
Scope
3. Cumulative trends
4. Problems and issues since last report
Actions and resolution of earlier problems
New variances and problems identified
5. Corrective action planned
The Project Control Process
Control
The process of comparing actual performance
against plan to identify deviations, evaluate courses
of action, and take appropriate corrective action.
Project Control Steps

1. Setting a baseline plan.
2. Measuring progress and performance.
3. Comparing plan against actual.
4. Taking actions

Monitoring Time Performance
Tools used to catch negative variances from plan and

communicate project schedule status:
Tracking and baseline Gantt charts
• Show expected, actual, and trend data for event duration

performance.
Control charts
• Plot the difference in scheduled time on the critical path with

the actual point on the critical path.
through Period 6

Project Schedule Control Chart
Disparity Among Monitoring Systems
Time-Phase Baseline Plan

Corrects the failure of most monitoring systems to
connect a project’s actual performance to its
schedule and forecast budget.
Example: Weekly report of a construction project
Planned cost of Actual cost of week Difference at the
week 2: 12.000$ 2: 14.000$ end of week 2:
2.000$
Accumulatively Accumulatively Accumulative
planned cost at actual cost at the difference at the
the end of week 2: end of week 2: end of week 2:
25.000$ 29.000$ 4.000$
12

Common problems:
• Systems that measure only cost variances do not
identify resource and project cost problems associated
with falling behind or progressing ahead of schedule.
• If expenditures are lower than expected for a given period
it may be good or bad, depending on whether progress is
line with that amount of expenditure.
• If expenditures are higher than expected, this may be

acceptable if progress is sufficiently greater than planned
for that period
THE NEED OF
EARNED
VALUE
MANAGEMENT?

EARNED VALUE
COST/SCHEDULE SYSTEM
Earned Value Cost/Schedule System

An integrated project management system based
on the earned value concept that uses a time-
phased budget baseline to compare actual and
planned schedule and costs.

Developing an Integrated Cost/Schedule System
1. Define the work using a WBS. 3. Develop a time-phased

a. Scope budget using work packages
included in an activity.
b. Work packages
Accumulate budgets (PV).
c. Deliverables
4. At the work package level,
d. Organization units collect the actual costs for
e. Resources the work performed (AC).
f. Budgets 5. Multiply percent complete

times original budget (EV).`
2. Develop work and resource
schedules. 6. Compute the schedule
variance (EV-PV) and the
a. Schedule resources to cost variance (EV-AC).
activities
b. Time-phase work
packages into a network
Project Management System

Overview

Cost/Schedule Graph
Earned Value Example
Suppose that work on a project task was expected to cost $1500 to

complete the task and the workers were originally scheduled to
have finished today. As of today, however, the workers have
actually expended $1350, and our best estimate is that they are
about 2/3 finished.
Evaluate the progress of project task by EV, PV, AC, CV, SV, CPI,
SPI, BAC, ETC, EAC, VAC
Project : 1000 m, total cost: 200 000 USD.

Plan: 25m/day, 200USD/m
If the 18th ,Actual: finish: 400 m, actual cost: 80 000 USD.
Evaluate project progress at the 18th

Glossary of Terms
1. EV (Earned Value) BCWP—budgeted cost of the work
performed
The percent complete times its original budget. The percent of
the original budget that has been earned by actual work
completed. The older acronym for this value was BCWP—
budgeted cost of the work performed.
2. PV (Planned Value) (BCWS—budgeted cost of the work
scheduled)
The time-phased baseline of the value of the work scheduled. An
approved cost estimate of the resources scheduled in a time-
phased cumulative baseline (BCWS—budgeted cost of the work
scheduled).
3. AC (Actual Cost) ACWP—actual cost of the work
performed
The actual cost of the work completed. The sum of the costs
incurred in accomplishing work. (ACWP—actual cost of the work
performed).
Glossary of Terms
1. CV (Cost Variance)
Cost variance is the difference between the earned
value and the actual costs for the work completed
to date where CV=EV-AC.
2. SV (Schedule Variance)
Schedule variance is the difference between the
earned value and the baseline line to date where
SV=EV-PV.

Glossary of Terms
Glossary of Terms
CPI
1. CPI (Cost 1,10
Integrating SPI and CPI
On schedule
Performance Schedule problems
and on budget
1,05 Week 4
Index) (0.84,1.01) Week 1
(1.01, 1.01)
CPI = EV/AC 1,00
2. SPI (Schedule 0,95

Budget
Performance Schedule and problems
0,90 budget problems
Index)
0,85
SPI = EV/PV
Week 2
0,80 (1.05, 0.85)
Week 3
(0.79,0.79)
0,75
0,75 0,80 0,85 0,90 0,95 1,00 1,05 1,10
SPI
24

Glossary of Terms
1. BAC (Budgeted cost At Completion)
The total budgeted cost of the baseline or project cost accounts.
2. ETC (Estimate To Complete)
ETC = (BAC-EV)/CPI = ETCf
3. EAC (Estimated costs At Completion)
Estimated costs at completion. Includes costs to-date plus revised
estimated costs for the work remaining.
EAC = ETC + AC
Glossary of Terms
ETCe
EACe
0 SD n1 n2
PV ETCf BAC
VACf
EV EACf
AC
VACe

Glossary of Terms
1. VAC
Cost variance at completion (BAC-EACe), where EACe is derived by
estimators in the field.
Or, alternatively, cost variance at completion (BAC-EACf), where EACf is
derived from a formula using actual and earned value costs.
VAC indicates expected actual over-or underrun cost at completion.
Glossary of Terms
1. Percent Complete Indexes

Indicates how much of the work accomplished represents of the
total budgeted (BAC) and actual (AC) dollars to date.
PCIB = EV/BAC
PCIC = AC/EAC

Glossary of Terms
Scope Changes to a Baseline

EXAMPLES
Project : 1000 m, total cost: 200 000 USD.

Plan: 25m/day, 200USD/m
If the 18th ,Actual: finish: 400 m, actual cost: 80 000 USD.
Evaluate project progress at the 18th
1. BCWS =PV (Planned Value) (BCWS—budgeted cost of the work scheduled)
2. ACWP= AC (Actual Cost) ACWP— actual cost of the work performed
3. BCWP= EV (Earned Value) BCWP—budgeted cost of the work performed
4. SV = BCWP-BCWS
SV>0: ahead schedule
SV=0: on schedule
SV<0: behind schedule
5. CV = BCWP-ACWP
CV>0: cost under run
CV=0: on cost
CV<0: cost over run
6. AV = BCWS-ACWP
AV>0: budgeted cost of the work scheduled > actual cost of the work performed
AV=0: budgeted cost of the work scheduled = actual cost of the work performed
AV<0: budgeted cost of the work scheduled < actual cost of the work performed
7. SPI = BCWP/BCWS
8. CPI = BCWP/ACWP
9. FCTC (Forecast cost to complete project)= (BCAC-BCWP)/CPI; BCAC: Budgeted cost at
completion
10. FCAC (Forecast cost at Completion) = ACWP+FCTC 32

Glossary of Terms
1. EV (Earned Value) BCWP—budgeted cost of the work
performed
The percent complete times its original budget. The percent of
the original budget that has been earned by actual work
completed. The older acronym for this value was BCWP—
budgeted cost of the work performed.
2. PV (Planned Value) (BCWS—budgeted cost of the work
scheduled)
The time-phased baseline of the value of the work scheduled. An
approved cost estimate of the resources scheduled in a time-
phased cumulative baseline (BCWS—budgeted cost of the work
scheduled).
3. AC (Actual Cost) ACWP—actual cost of the work
performed
The actual cost of the work completed. The sum of the costs
incurred in accomplishing work. (ACWP—actual cost of the work
performed).

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TOPIC 7:

PROGRESS AND PERFORMANCE

Monitoring and Controlling the project

Instructor: Dr. Nguyen Thi Duc Nguyen 1

2. Earned value Cost/Schedule System

Instructor: Dr. Nguyen Thi Duc Nguyen 2

Information System Structure

Project Monitoring System-

Information System Structure (cont’d)

Instructor: Dr. Nguyen Thi Duc Nguyen 3

1. Progress since last report

The Project Control Process

Project Control Steps

Instructor: Dr. Nguyen Thi Duc Nguyen 4

Tools used to catch negative variances from plan and

Tracking and baseline Gantt charts

• Show expected, actual, and trend data for event duration

• Plot the difference in scheduled time on the critical path with

Instructor: Dr. Nguyen Thi Duc Nguyen 5

Disparity Among Monitoring Systems

Time-Phase Baseline Plan

Instructor: Dr. Nguyen Thi Duc Nguyen 6

• If expenditures are higher than expected, this may be

Instructor: Dr. Nguyen Thi Duc Nguyen 7

Earned Value Cost/Schedule System

Instructor: Dr. Nguyen Thi Duc Nguyen 8

1. Define the work using a WBS. 3. Develop a time-phased

f. Budgets 5. Multiply percent complete

Project Management System

Instructor: Dr. Nguyen Thi Duc Nguyen 9

Earned Value Example

Suppose that work on a project task was expected to cost $1500 to

Project : 1000 m, total cost: 200 000 USD.

Instructor: Dr. Nguyen Thi Duc Nguyen 10

Instructor: Dr. Nguyen Thi Duc Nguyen 11

2. SPI (Schedule 0,95

Instructor: Dr. Nguyen Thi Duc Nguyen 12

Instructor: Dr. Nguyen Thi Duc Nguyen 13

1. Percent Complete Indexes

Instructor: Dr. Nguyen Thi Duc Nguyen 14

Scope Changes to a Baseline

Instructor: Dr. Nguyen Thi Duc Nguyen 15

Project : 1000 m, total cost: 200 000 USD.

Instructor: Dr. Nguyen Thi Duc Nguyen 16

Instructor: Dr. Nguyen Thi Duc Nguyen 17

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