Evm power point 25 august 2015 prams co (2)

Roger H. [email protected]

Earned Value ManagementOverview for understanding of the value of EVM analytical data

Concept of Earned Value Management (EVM)

• A tool for the Customer and Supplier to have visibility into technical, cost and planned progress

http://www.acq.osd.mil/evm

• Integrates the cost, planned (schedule) and technical aspects into programmatic report synopses

• Insight into progress that provided information on cost and planned (schedule) performance data

• Visually depicts budget efficiencies for both time and cost

• Time-phased budgets to specific tasks and/or statements of work

http://www.acq.osd.mil/evm

Management Needs

• Indicates work progress that properly relates cost, schedule and technical accomplishments

• Data presented are valid, timely, and can be audited Supplies management with information at a practical level of

summarization

• Data presented to the customer are from the same internal EVM system used by the supplier to manage the project

Guideline Concepts

• The guideline approach established the framework of an integrated cost, schedule, and technical management system

• EVM Guidelines provides rules for a system that is acceptable and that provides valid, timely data that can be audited

• The guidelines can be used for Research and Development, construction, modification, and production projects

Industry Standards

• Industry recognizes the importance of earned value in managing both supplies and services

• There are thirty two (32) Guidelines from industry standard that should become your baseline in determining the validity of any earned value management system

Management System

• In designing, implementing and improving the EVM system, the objective should be to do what makes sense

• The management system that meets the letter of the criteria but not their intent will not support management’s needs

Compliance will facilitate:

• Timely baseline development and control will provide information break down by product as well as by organizational function

• Objective measurement of accomplishment against the plan that summarized reporting to higher management for use in decision-making

• With reporting discipline and in objective analysis of variances, will direct management actions to manage cost and schedule performance

Earned Value Management

• TO BE EFFECTIVE: ESTABLISH MEASURABLE EFFORTS - You cannot manage

what you cannot measure

DEVELOP A PLAN THAT IS MEASURABLE - That becomes your budget

DECIDE WHAT WORK IS TO BE ACCOMPLISHED OVER TIME - That becomes your baseline plan

ESTABLISH WHAT WORK HAS BEEN ACCOMPLISHED - That is your work earned or earned value

VERIFY THE COST TO ACCOMPLISH THAT WORK - That is what has been expended


• TAKE ACTION DUE TO SCHEDULE VARIANCES: What was to be accomplished at this point in time? What has been accomplished at this point in time?

– The difference is the Schedule Variance– Determine cause, effect and mitigation

• TAKE ACTION DUE TO COST VARIANCES: What has been accomplished at this point in time? What was the cost to accomplish the efforts at this point in time?

– The difference is the Cost Variance– Determine cause, effect and mitigation


MasterPlanning

SelectedReportingElements

ADAProducts

SoftwareTools Standards

ADA Study

ADA Controls

ADA Interface

CPCO #1MOS

CPCO #2MOL

CPCO #3MAC

MarketingFunctionalManager

ADAApplications

ControlAccount

ControlAccount

ControlAccount

ProgramManager

EngineeringFunctionalManager

SoftwareEngineering

SecuritySystems

ControlAccount

OperationsFunctionalManager

HardwareEngineering

LANApplications

ControlAccount

ControlAccount

PlanningPackages

Contract Work Breakdown Structure &Organization Breakdown Structure

ProductDevelopment

Software Instigation Program

SelectedPSWBS

Elements

OBS DATA SUMMARIZATION

WBS

DATA

SUMMIZATION

FunctionalOrganization

WorkPackages

PlannedEarnedExpendedBACEAC

CWBSExtension

Cumulative Project Trends


TREND STATUS REPORT

0

50

100

150

200

250

300

350

400

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

TIME RELATED

LA

BO

R H

OU

RS

or D

OL

LA

RS

Earned Progress

Expended

Scheduled Planned


TREND STATUS REPORT

0

20

40

60

80

100

120

140

160

180

200

1 2 3 4 5 6 7

TIME RELATED

LA

BO

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OU

RS

or D

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LA

RS

Earned Progress

Expended

Scheduled Planned

COST VARIANCE

SCHEDULE VARIANCE

Status and Trends

Red indicates at least 3 weeks negative Schedule Variance

AS OF DATE

23-Nov-03TaskNo. Tasking

StatusSV

StatusCV

PercentEarned

2110 Task Lead Degrading 71.5%2220 Modeling Degrading 82.2%2230 Integration Degrading Degrading 76.6%2310 Docs Degrading 77.1%3110 Software Degrading 72.6%3210 SW Devel Improving Degrading 91.0%3215 KG-84 WF Improving Degrading 80.6%3224 KWR-46 W/F Improving Degrading 96.1%3330 Gen Infras Improving Degrading 83.5%3410 HMI Desg Holding Degrading 87.3%3624 Algor Holding Degrading 96.0%5120 Envir. Test Improving Holding 98.1%

OVER ALL Improving Degrading 82.4%

About 2 weeks behind schedule



About 1 week behind scheduleAbout 3 weeks behind schedule


About 1 week behind schedule



About 3 weeks behind scheduleAbout 5 weeks behind schedule

SchedulePosition

Green Block

WAVEFORMS

Task Status due to change in Cumulative Schedule & Cost Variances.Positive Performance

SV is Schedule Variance. The difference between Earned and PlannedCV is Cost Variance. The difference between Earned and Expended.

Estimate at Completion (EAC) Development

MCS S/WMCS 15855 Form: 28-Feb-02 To: 23-Nov-03 EAC 6 3 FUTURE Dollars or Hours EFF.

PRODUCT CUM. Periods Periods EST. TCPI % of % @CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC

Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8%MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2%MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7%Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2%Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2%MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2%ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5%Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0%CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8%G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1%PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9%

WR BAC/EAC

Developed by: Roger H. Mandel LRE Remain

S/W for Chris Newborn

Budget at Completion (BAC) is the authorized budget. Latest Revised Estimate (LRE) is latest revised estimate. Progress (Prog.). Cost efficiency (EFF)

Formula Card

PERFORMANCE INDICES Developed by: RMandel @PramsCo.Com

Less than 1.0 is unfavorable

Cost Efficiencies (Expended)

EarnedExpended

Schedule Efficiencies (Planned)Dollars

EarnedPlanned Percent

OVERALL STATUS ItemsBudget at Completion (BAC)

EarnedBAC

ExpendedBAC

TO COMPLETE PERFORMANCE INDEX

Work RemainingUnexpended Budget Time Line

BAC - Earned Cost Variance (CV) = Earned - ExpendedBAC - Expended

EarnedLatest Revised Estimate by the supplier (LRE) ExpendedEstimate at Completion is your projection (EAC)

Schedule Variance (SV) = Earned - PlannedYou can substitute LRE or EAC for BAC in the Denominator

EarnedESTIMATE at COMPLETION (EAC) Planned

BAC - Earned Variance at Completion (VAC) = BAC - LREProjected Efficiencies

Note: Negatives are unfavorable

x 100

x 100

Cost Variance % (CV%) =

Schedule Variance % (SV%) =

EAC = EXPENDED +

Cost Performance Index (CPI) =

Schedule Performance Index (SPI) =

Percent Complete =

Percent Spent =

TCPI BAC =

TCPI BAC =

1 2 3 4 5 6 7 8 9 10 11 12 13

EXPENDED orCONSUMED

EARNED orACCOMPLISHED

SCHEDULED or PLANNED

BUDGETED

Cost Variance

ScheduleVariance

Time Now

BAC

Purpose of Earned Value Management

• What does Earned Value Management do for Management?

Measurement of accomplished efforts against the plan so management can effectively make risk management decisions

In designing, implementing and improving the EVM system, the objective is to do what makes sense

Directs management’s decisions for cost and schedules performance

Conclusion• EVM is a proven value over many years

Integrates cost, schedule and technical performance Provides planning and control discipline on projects

• Reports summarize objective data from the internal system The program achieves improvements where accountability

derives systems effectiveness

• American National Standards Institute (ANSI) It is now part of the International Standards Organization’s

requirement to become certified as a ISO 9000 organization

• Electronics Industries Alliance (EIS)

• ANSI/EIS-748-C The new ANSI standard on Earned Value Management System

guidelines has been approved

Back Up

Contract Performance ReportIntegrated Program Management Report Format 2

Quick Look

File: CPR Software Customer The Government Form: 28-Feb-02 To: 23-Nov-03WO Example Description:

1 2 3 4 5 6

ScheduledPlanned Earned Expended

Budget at Completion

LatestRevisedEstimate

Date BCWS BCWP ACWP BAC LRE1 Jan-02 $0 $0 $0 $13,612,328 $13,582,9852 Feb-02 $1,708,000 $1,708,074 $1,708,074 $13,612,328 $13,582,9853 Mar-02 $2,672,000 $2,333,343 $2,324,376 $13,612,328 $13,582,9854 Apr-02 $3,712,187 $2,882,122 $3,047,592 $13,642,344 $13,688,9135 May-02 $4,742,291 $3,633,938 $3,974,360 $13,911,373 $14,206,8616 Jun-02 $6,052,344 $4,622,395 $5,376,493 $13,911,373 $14,693,3107 Jul-02 $6,810,848 $5,325,287 $6,404,564 $13,911,373 $15,640,5418 Aug-02 $7,745,218 $5,973,591 $7,465,236 $13,911,373 $16,090,2299 Sep-02 $8,623,791 $6,853,744 $9,029,286 $13,911,373 $22,830,318

10 Oct-02 $9,480,043 $7,661,221 $10,214,832 $13,907,817 $22,830,32011 Nov-02 $10,166,968 $8,262,559 $10,970,763 $13,907,817 $22,830,32012 Dec-02 $11,027,853 $8,828,656 $12,026,907 $13,907,817 $22,830,32013 Jan-03 $11,641,078 $9,361,548 $13,018,779 $14,530,683 $22,830,32014 Feb-03 $12,200,000 $12,631,080 $14,256,473 $14,530,683 $22,830,32015 Mar-03 $15,811,258 $15,900,611 $15,942,365 $26,956,128 $26,830,12816 Apr-03 $17,117,885 $16,905,911 $17,150,254 $26,956,129 $26,956,12817 May-03 $18,389,493 $17,904,295 $18,377,464 $27,018,953 $27,018,95318 Jun-03 $19,804,083 $19,232,824 $20,020,315 $27,134,209 $27,134,20919 Jul-03 $20,765,126 $19,996,797 $21,208,817 $27,134,209 $29,887,66920 Aug-03 $21,584,712 $20,775,864 $22,392,161 $27,134,209 $29,728,71621 Sep-03 $22,417,694 $21,351,286 $23,312,705 $27,166,410 $29,762,93822 Oct-03 $22,937,994 $21,908,166 $24,483,585 $27,166,410 $33,573,71923 Nov-03 23,111,327$ $22,292,564 $25,595,345 $27,039,864 33,436,558$ 24 Dec-03

Limited Rate Initial Production

$0

$4

$8

$12

$16

$20

$24

$28

$32

1 3 5 7 9 11 13 15 17 19 21 23M

illio

nsReport Period as of (Date)

LRE

Expended

Budget

Earned

Scheduled

Cumulative data

Historical Trends

Cumulative Status

EAC Development

Data Collections

Data Graph

The different trends indicate a growth in variances for Schedule and Cost to the baseline.

Data Graph

Current Status

Red indicates at least 3 weeks negative Schedule Variance

AS OF DATE

23-Nov-03TaskNo. Tasking

StatusSV

StatusCV

PercentEarned

2110 Task Lead Degrading 71.5%2220 Modeling Degrading 82.2%2230 Integration Degrading Degrading 76.6%2310 Docs Degrading 77.1%3110 Software Degrading 72.6%3210 SW Devel Improving Degrading 91.0%3215 KG-84 WF Improving Degrading 80.6%3224 KWR-46 W/F Improving Degrading 96.1%3330 Gen Infras Improving Degrading 83.5%3410 HMI Desg Holding Degrading 87.3%3624 Algor Holding Degrading 96.0%5120 Envir. Test Improving Holding 98.1%

OVER ALL Improving Degrading 82.4%




About 1 week behind scheduleAbout 3 weeks behind schedule


About 1 week behind schedule



About 3 weeks behind scheduleAbout 5 weeks behind schedule

SchedulePosition

Green Block

WAVEFORMS

Task Status due to change in Cumulative Schedule & Cost Variances.Positive Performance

EVM Raw Data

Budget Budget

TaskNo. Tasking 23-Nov-03

26-Oct-0328-Sep-03

23-Nov-0326-Oct-03

28-Sep-0326-Oct-03

26-Jan-032110 Task Lead 0 0 0 (41,082) (39,752) (37,854) 796,664 345,1512220 Modeling (46,318) (37,703) (18,973) 7,373 5,333 18,275 1,386,515 562,6502230 Integration (144,315) (117,391) (69,293) (252,295) (182,046) (112,483) 1,674,815 719,4642310 Docs (37,782) (24,909) (16,334) 145,764 139,545 138,685 1,219,216 708,1233110 Software 0 0 0 (124,101) (107,432) (77,210) 1,075,813 578,5233210 SW Devel (16,355) (31,240) (28,534) (278,586) (220,061) (200,295) 606,436 759,1163215 KG-84 WF (69,776) (74,261) (89,587) (195,634) (177,074) (149,091) 733,675 03224 KWR-46 W/F (6,597) (16,510) (32,578) (257,393) (254,874) (235,503) 170,454 35,2773330 Gen Infras (143,193) (279,663) (285,591) (765,474) (631,822) (470,757) 2,979,646 665,3553410 HMI Desg (14,039) (16,407) (18,944) (38,269) (32,027) (23,986) 427,674 346,1583624 Algor (15,223) (15,223) (30,466) (84,922) (76,293) (77,887) 384,855 135,6115120 Envir. Test (12,036) (23,903) (49,435) (238,256) (233,592) (188,158) 632,769 391,628

OVER ALL (818,763) (1,029,828) (1,066,408) (3,302,781) (2,575,419) (1,961,419) 27,166,410 14,530,683

WAVEFORMS Cumulative SV Cumulative CV

UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO

UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO 33

EAC Calculation Sheet

SoftwareExample Form: 28-Feb-02 To: 23-Nov-03 EAC 6 3 FUTURE Dollars or Hours EFF.

PRODUCT CUM. Periods Periods EST. TCPI % of % @CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC

Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8%MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2%MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7%Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2%Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2%MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2%ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5%Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0%CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8%G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1%PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9%

WR BAC/EAC

Developed by: Roger H. Mandel LRE Remain

Definition

Definitions and Acronyms

Variance at Completion (VAC): The difference between the total budgets assigned to a contract, WBS element, organizational entity

ACRONYMS

ACE: Actual Cost Expended ACWP: Actual Cost of Work Performed (Expended Resources in $) BAC: Budget at Completion in $ BCWP: Budgeted Cost for Work Performed in $ BCWS: Budgeted Cost for Work Scheduled in $ CPI: Cost Performance Index CV: Cost Variance CV%: Cost Variance as a percent ETC: Estimate to Complete EV: Earned Value PMB: Performance Measurement Baseline SPI: Schedule Performance Index SV: Schedule Variance SV%: Schedule Variance as a percent TCPI: To Complete Performance Indices VAC: Variance at Completion

[email protected]

or cost account and the estimate at completion. Variance at Completion equals Budget at Completion less Estimate at Completion. It represents the amount of expected overrun or under run.

Evm power point 25 august 2015 prams co (2)

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