Project Monitoring and Control

Using Earned Value Analysis

Tej S. Dhakar, PhD Ex-PMP

Chair, Quantitative Studies, Operations and

Project Management Department

School of Business

Southern New Hampshire University

t.dhakar@snhu.edu

The Project Control Process

Monitor and control schedule, cost and performance

Four Step Process

Step 1: Setting a baseline plan.

Network planning

Resource scheduling

Expediting

The Project Control Process

Step 2: Measuring progress and performance.

Time performance is the easiest to measure

Cost performance is more difficult

Performance with respect to meeting specifications and requirements can be met by on-site inspections and measurements.

The Project Control Process

Step 3: Comparing plan against actual.

Measure deviation

Step 4: Taking actions

If there are significant deviations, make corrections.

If there is change in scope, revise the baseline plans.

Project Monitoring Tools

Project Monitoring Tools to track time and/or cost

performance

Project S-Curve

Milestone Analysis

Control charts

Tracking and baseline Gantt charts

Earned Value System

The Project S-Curve

Elapsed Time (in weeks)105 45403530252015 50

20

60

40

Cumulative Cost

($ in thousands)

Cumulative

Budgeted Cost

Cumulative

Actual Cost

$10,000 Negative Var

Tracking Gantt Chart

Earned Value Cost/Schedule System

Developed by DOD in 1960s.

An integrated project management system used to

compare the actual and planned schedule and

costs.

Most large companies use this system.

Digital Camera Prototype Project

Baseline Gantt Chart

Planned Value (PV)

Budgeted cost of the work scheduled.

Budgeted at Completion (BAC)

Total budgeted cost for the project

Project Baseline

Digital Camera Prototype Project

Baseline

Baseline budget needs are in thousands of dollars

Earned Value (EV)

Budgeted cost of the work completed

Percentage of work completed times the budgeted cost.

Actual Cost (AC)

The actual cost of the work completed.

Project Status Measures

Earned Value Analysis Concept

PV EV

AC

Ahe

ad

Overspend

Scheduled Performed

Actual

Budget

Schedule

Cost

Schedule Variance (SV) = EV - PV

Cost Variance (CV) = EV - AC

Which is better?

Positive or Negative Variance?

Project Variance Measures

Digital Camera Project Status After Six

Weeks

The project started as planned on Monday August

8, 2016.

Today’s date is September 19, 2016 (end of week

6).

Design and Specs took 2 weeks to complete at a

total cost of $20K.

Shell & Power took 3 weeks to complete at a total

cost of $25K.

Digital Camera Project Status After Six

Weeks

Zoom System took 2 weeks to complete at a total

cost of $30K.

Memory/Software is in progress with 4 weeks

completed and one week remaining. Cost to date is

$100K.

All of the tasks started on time.

Status Report – At the End of Week 6

Task % Complete EV PV AC SV CV

A Finished 20 20 20 0 0

B Finished 15 15 25 0 -10

C 80% 80 100 100 -20 -20

D Finished 35 35 30 0 +5

E 0 % 0 0 0 0 0

F 0 % 0 0 0 0 0

Cumulative Totals 150 170 175 -20 -25

How is the project doing on schedule?

Schedule variance (SV)

SV = EV – PV = 150-170 = -20.

Schedule Performance Index (SPI)

SPI = EV/PV = 150/170 = 0.88

SV% = 𝑆𝑉

𝑃𝑉100 =

−20

170(100) = -12%

Measures of Total Project Performance

How is the project doing on cost?

Cost variance (CV)

CV = EV – AC = 150-175 = - 25

Cost Performance Index (CPI)

CPI = EV/AC =150/175 =0.86

CV% = 𝐶𝑉

𝐸𝑉100 =

−25

175x100 = -14%

Measures of Total Project Performance

How much of the projected has been

completed?

Percent Complete Index Budgeted (PCIB)

PCIB = EV/BAC = 150/320 = 47%

Measures of Total Project Performance

What is the expected performance of the

project at completion?

Estimated at Completion (EAC)

EAC = BAC / CPI = 320/0.86 = 372K

Variance at Completion (VAC)

VAC = BAC-EAC = 320- 372 = -52K

Projected Project Performance

To Complete Performance Index (TCPI)

TCPI = (BAC – EV) / (BAC – AC)

= (320-150)/ (320-175)

= 170/145

= 1.17

Projected Project Performance

Earned Value Portfolio Management

System

Determine the schedule and cost variance for

various projects.

How well the company is managing its portfolio of

projects?

Comparison of projects across the company.

Project Monitoring and Control

Using Earned Value Analysis

Questions??