Earned Value Management EVM Earned Value Management Planned

Earned Value Management EVM

Earned Value Management • Planned Value (PV): – Budget of the planned work until now – How much I should spend until now • Actual Cost (AC): – Actual Cost of the completed work – How much I spent until now • Earned Value (EV): – How much I should spend considering the completed work – The budget for the completed work 03/06/2013 http: //www. escritoriodeprojetos. com. br

Earned Value Management • Variação – CV (Cost Variance) = EV – AC; • Difference between Earned Value and Actual Cost – SV (Schedule Variance) = EV – PV; • Difference between Earned Value and Planned Value 03/06/2013 http: //www. escritoriodeprojetos. com. br

Expenses ($ thousands) Example Budget (PV) 1000 750 500 The project is late!!! 250 Actual Cost (AC): $ 230 Tend to exceed the budget!!! CV = ($ 30) SV = ($ 50) Earned Value (EV): $ 200 1 03/06/2013 2 Time (quartes) 3 4 http: //www. escritoriodeprojetos. com. br

Earned Value Management. Performance Index • SPI (Schedule Performance Index) = EV/ PV – Earned Value compared to Planned Value • CPI (Cost Performance Index) = EV / AC – Earned Value compared to Actual Cost • TCPI (To-complete Performance Index) = – (BAC – EV) / (BAC – AC) – BAC: Budget at completion, Total Budget of the Project. 03/06/2013 http: //www. escritoriodeprojetos. com. br

Expenses ($ thousands) Variações PV 1000 Only 80% of the planned value has been converted to earned value. 750 A loss of 20% of the planned value! 500 AC = $230 250 SPI = (200/250) = 0, 8 1 03/06/2013 EV = $200 2 3 Schedule (Quartes) 4 http: //www. escritoriodeprojetos. com. br

Variações PV 1000 For each $ 1 spent, only $ 0. 87 is being physically converted into product. Expenses ($ thousands) 750 There is a loss of $ 0. 13 per $ 1 spent! 500 AC = $230 250 CPI = (200/230) = 0, 87 1 03/06/2013 EV = $200 2 3 Schedule (Quartes) 4 http: //www. escritoriodeprojetos. com. br

Earned Value Management >0 & > 1. 0 =0&=1 <0&<1 SV & SPI Earlier on schedule Late CV & CPI Under budget on budget Over budget Metric Questions TCPI - To-complete Necessary performance to finish the project on Performance Index budget EAC= BAC/IDC How much will the project cost? Budget Variance= BAC-EAC Is the project below or above the budget? ETC= BAC-EV CPI How much will the work to be realized cost? 03/06/2013 http: //www. escritoriodeprojetos. com. br

Reviewing Earned Value Management • • • Check the quality of the collected information Determine variations between real x baseline Determine impact of changes in cost and schedule (*) Analyze the causes and trends of changes Propose corrective actions or renegotiate baseline Document causes and impacted areas • (*) Determine with the stakeholders range of acceptable variations (documented it in the Project Plan) 03/06/2013 http: //www. escritoriodeprojetos. com. br

Exercice (15 minutes) • You have a project to build a square. • Each side takes one day to build and is budgeted at $ 1, 000. 00 per side. • Each side must be built one after another. • Consider that today is the end of the 3 rd day. Task Side 1 Side 2 Side 3 Side 4 Day 1 Day 2 Day 3 Day 4 S ------ F Status in the end of the 3 rd day Completed, $ 1. 000, 00 spent S ----- PF ------F Completed, $ 1. 200, 00 spent PS ----I---- PF Half complete, $ 600, 00 spent PS ----- PF Not started S = Started; F = Finished; PF = Planned Finish; PS = Planned Start 03/06/2013 http: //www. escritoriodeprojetos. com. br

Exercices • Calculate: – – – – 03/06/2013 PV EV AC BAC CV (EV - AC) CPI (EV / AC) SV (EV - PV) SPI (EV / PV) http: //www. escritoriodeprojetos. com. br

Thanks! Eduardo Montes, PMP eduardo@escritoriodeprojetos. com. br