Earned Value
45
Create WBS Work Package Scope Decompositio n 100 %
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Earned Value in PMP
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Create WBS
Work Package
ScopeDecomposition
100 %
Create WBS
Work Package
ScopeDecomposition
100 %100 %
Initiating the Project•Conduct project selection methods•Define scope•Document project risks, assumptions, and constraints•Identify and perform stakeholder analysis
•Develop project charter•Obtain project charter approval
Planning the Project•Define and record requirements, constraints, and assumptions•Identify project team and define roles and responsibilities•Create the WBS•Create Activity List , Attributes and Network Diagram •Estimate activity resources and duration •Estimate activity Costs •Iterations, go back to make changes or updates to Project management Plan •Develop change management plan•Identify risks and define risk strategies•Determine quality standards, processes and metrics•Determine roles and responsibilities•Determine communication requirements •Obtain plan approval•Conduct kick-off meeting
Executing the Project•Execute tasks defined in project plan•Ensure common understanding and set expectations•Implement the procurement of project resources•Manage resource allocation•Implement quality management plan•Implement approved changes•Implement approved actions and workarounds•Improve team performance
Monitoring and Controlling the Project•Measure project performance•Verify and manage changes to the project•Ensure project deliverables conform to quality standards•Monitor all risks
0 4 10 11 15
SCOPE 100%
WP 1 WP 2 WP 3 WP 4
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SCOPE 100 $
WP 1 WP 2 WP 3 WP 4
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20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
20 $ 60 $ 10 $ 10 $
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BAC
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
80 $ Planned Value = 80 $
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Only Package 1 complete
20 $Planned Value = 80 $
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $ Earned Value = 20 $
Schedule Variance = EV – PV = -60 $
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $ Earned Value = 20 $
Schedule Variance = EV – PV = -60 $
Behind Schedule
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $Schedule Variance = EV – PV = -60 $
Behind Schedule
Earned Value = 20 $
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $
30 $
Earned Value = 80 $
What did we spend for completing package 1
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $Actual Cost = 30 $
30 $
Earned Value = 80 $
What did we spend for completing package 1
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $Actual Cost = 30 $
Cost Variance = EV – AV = -10 $30 $
Earned Value = 80 $
What did we spend for completing package 1
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $Actual Cost = 30 $
Cost Variance = EV – AV = -10 $30 $
Earned Value = 20 $
Over Budget
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $Actual Cost = 30 $
Cost Performance Index = EV AV = 0.6730 $
Earned Value = 20 $
Over Budget
÷
20 $ 60 $ 10 $ 10 $
0 4 10 11 15
BAC
Planned Value = 80 $
20 $ Earned Value = 20 $
Behind Schedule
Schedule Performance Index = EV PV 0.25 ÷
20 $ 60 $ 10 $ 10 $
0 4 10 12 15
BAC
20 $ 60 $ 50%
80 $
0 4 10 11 15
Earned Value
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Planned Value
Earned Value
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Schedule Variance
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Cost Variance
Schedule Variance
Both relative to earned value
Planned Value
Actual
Cost
Earned Value
Time
Cost
Cost Variance
Schedule Variance
Both relative to earned value
Positive Variances are good ( under spent or ahead of schedule) Negative Variances are bad ( Over spent or Behind schedule)
Planned Value
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Earned Value
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Performances Indices
Cost Performance Index
Schedule Performance Index
Cost Performance Index
Schedule Performance Index Earned Value
Earned Value
Performances Indices
Cost Performance Index
Schedule Performance Index Earned Value
Earned Value
Actual Cost
Performances Indices
Cost Performance Index
Schedule Performance Index Earned Value
Earned Value
Actual Cost
Planned Cost
Calculates efficiency
Calculates effectiveness
Ratios greater than 1 are good
Performances Indices
Cost Performance Index
Schedule Performance Index
Calculates efficiency
Calculates effectiveness
Ratios greater than 1 are good
Final Cost BAC
CPIFinal Project duration
Planned Project Duration
SPI
Earned Value
Earned Value
Actual Cost
Planned Cost
Performances Indices
Worked Example 1
A project has a budget of $ 1.5 million and a planned duration of 20 months
After 8 months the reported figures are given below:
Cost Type AmountPlanned Cost $ 720k
Actual Cost $ 600k
Earned Value $ 680k
Calculate CPI , CV , SPI , SV , Final Cost , Final Planned Duration ?
Worked Example 1
A project has a budget of $ 1.5 million and a planned duration of 20 months
After 8 months the reported figures are given below:
Cost Type AmountPlanned Cost $ 720k
Actual Cost $ 600k
Earned Value $ 680k
Calculate CPI , CV , SPI , SV , Final Cost , Final Planned Duration & % complete ?
CPI = EV / AC = 680 / 600 = 1.13CV = EV – AC = 680 – 600 = 80
SPI = EV / PV = 680 / 720 = 0.94SV = EV – PV = 680-720 = - 40
Final Cost BAC
CPI
Final Cost 1.5 m / 1.13 132 m
Final Project duration Planned Project Duration
SPIFinal Project duration 20 / 0.94 21.27
Percentage complete EV / BAC * 100 680 / 1500 * 100 45.33 %
