Anaheim, CA | February 2-5, 2014

Matthew T. DavisPMP, MCTS, MCITP

Matthew T. Davis, PMP, MCITP

EVM De-Mystified!Understanding Earned Value Management in Project

PC313

EVM De-Mystified

EVM OverviewKey ConceptsTerminologyInterpretation

EVM ModelingData RequirementsProcess NeedsModeling Options

EVM AnalysisViews and Reports in ProViews and Reports in PWA

DemoEVM FundamentalsA day in the life of an EVM Project

Q&A

Presentation Summary

ResourcesSchedule Cost

Are we on schedule?

Will we be on budget?

Are our resources delivering?

Will we meet customer expectations?

Can we keep our promises?

The Ultimate PM Challenge

AccountabilityEfficiencyValue

Simple Questions. What’s your answer?

EVM Overview – Key ConceptsWhat is EVM?

‘A method for measuring project performance. It indicates how much of the budget should have been spent, in view of

the amount of work done so far and the baseline cost for the task, assignment, or

resources.’

- Microsoft Project 2003 User Guide

Other Definitions"A methodology used to measure and communicate the real physical

progress of a project taking into account the work complete, the time taken and the costs incurred to complete that work.“

- Project Magazine

"An integrated management control system for assessing, understanding and quantifying what a contractor or field activity is achieving with program dollars. EVM provides project management with objective,

accurate and timely data for effective decision making.“- NASA

"A method for measuring project performance. It compares the amount of work that was planned with what was actually accomplished to determine

if cost and schedule performance is as planned.“- Englert and Associates, Inc

EVM Overview – Working DefinitionWhat is EVM?

A project management technique for measuring project performance and

progress. It combines measurements of Scope, Schedule, and Cost in a single

integrated system which enables extremely accurate forecasts of project

performance.

EVM Analysis ComponentsThree fundamental values calculated for each task PV – Planned Value (BCWS)AC (ACWP) – Actual Cost of Work PerformedEV – Earned Value (BCWP)

EVM Analysis Components - PVPV (BCWS) is the budgeted cost of tasks as scheduled based on the costs of resources (people, equipment, and material) assigned to those tasks, plus any fixed costs. Shows how much of the budget SHOULD have been spent at a point in time, based on the baseline cost of the task, assignment, or resource. PV is calculated as the cumulative time-phased baseline costs up to the status date.

EVM Analysis Components – AC (ACWP)AC (ACWP) is the cost that has actually been incurred to date for a task, resource, or assignment.

What cost have I incurred so far?

EVM Analysis Components – EV (BCWP)EV (BCWP) is the value of the work performed by the status date, measured in currency. This is literally the value earned by the work performed.

For example, if after 2 days 60% percent of the work on a task has been completed, you might expect to have spent 60 percent of the total task budget, or $60 of a $100 task. (Or not!)

EVM Analysis Components - RecapThree fundamental values calculated for each task PV – Planned Value (BCWS)

How much should I have spent for work PLANNED to this point in time (Status Date)

AC (ACWP) – Actual Cost of Work PerformedHow much did I ACTUALLY spend for the work PERFORMED so far?

EV – Earned Value (BCWP)How much VALUE should I have for the cost of work PERFORMED so far?(Status Date)

“We’ve spent all the money and more, we’re

behind schedule, and the house is only 25% done.”

Understanding EV – ‘Emotional Value’What these elements are really telling you...

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EVM

Typical EVM Graph

The Indices: CPI, SPI and TCPIDerived from previous 3 valuesCPI - Cost Performance IndexSPI - Schedule Performance IndexTCPI - To Complete Performance Index

The Indices: CPI, SPI and TCPICPI - Cost Performance Indexshows the efficiency of the resources>1 is good, <1 is badSPI - Schedule Performance Indexshows the efficiency of the time utilized >1 is good, <1 is badTCPI – To Complete Performance IndexRatio of work remaining to funds remaining

“Yeah, we’re supposed to be done next week but we’ve been working for

18 weeks! We need another 6 weeks.”

Understanding The Indices (Or Idiocies!)What CPI, SPI and TCPI is really telling you...

SPI CPI TCPI01234

EVM

Funds Remaining

Work Remaining

Funds Remaining

Work Remaining

TCPI – To Complete Performance Index

TCPI < 1

TCPI = 1

TCPI > 1

Data Requirements in ProjectDependencies / Dynamic Tasks / Critical PathNo Task Constraints – Unless they are REALAll Task have a Predecessor and Successor or implied successor

Resources with CostsStandard Rate at minimumAccurate Max Units – Single or Group Resources OKConsider Cost Per Use Values and Non-Work Resource Types

Resource AssignmentsRecommend Work Modeling vs. 100% Unit AllocationsLoaded per resource / task as work (not duration based)Consider Work, Contours, Overtime, and Task Calendars

Data Requirements in ProjectComplete BaselineStart / Finish DatesWork / Cost/ DurationNo Missing Baseline Values

Status DateDetermines date for EVM Calculations

Actuals / ProgressActual Work / Remaining WorkActual Start / Finish Dates

Data Requirements in ProjectStart / Finish Dates for TasksBaseline Start / FinishPlanned Start / FinishActual Start / Finish

Process NeedsWork / Effort EstimationResource SchedulingBaseline ManagementActuals Updates & AnalysisRe-Planning

Process Needs

Work / Effort Estimation

Team / SME Based

Quantifiable

Manageable

Assumptions Known

Clear ‘Done’ State

Resource Scheduling

May not be ‘Levelling Delay’

Other Methods include Team Planner, Overtime, Weekend Task Calendars, Additional Resources, etc.

Actuals Updates & Analysis

% complete vs. Actual Work

Start / Finish Dates

Duration Based

Physical % complete

Baseline Management

When to baseline?

When can I re-baseline?

Ensure new added tasks are baselined

The EVM baseline vs. ‘other baselines’

Re-Planning

No completed tasks in the future!

Re-Estimate in-progress tasks

Re-Schedule Incomplete Work

Process NeedsTypical ScheduleMaintenance Cycle

Weekly?Monthly?Quarterly?

Work Effort Estimation

Resource Schedulin

g

Baseline Managem

ent

Actuals Updates & Analysis

Re-Planning

EVM Modeling Options in Project• % Complete is duration based and is

calculated by Project when entering Actual Start/Actual Finish or Actual Work

• Physical % Complete is always entered manually by you. Allows for a more accurate measure of real work performed when duration is not a good indicator.

Data Requirements in ProjectEVM Fundamentals – A Day In The Life EVM Reporting & Analysis

EVM De-Mystified Demo

Challenges with EVMProjects will look ‘RED’ all the time!

Are estimates too optimistic?Are resource availability assumptions too

high?Getting Actuals is too hard!

Consider SharePoint Sync UpdatesConsider Project Online

Stakeholders won’t understand EVM Reports!Simple charts and graphs always tell a

story

MonitorControlDeliver

Are we on schedule?

Will we be on budget?

Are our resources delivering?

Will we meet customer expectations?

Can we keep our promises?

The Real Value of EVM

UnderstandRespondTrust

It’s not just about reporting. It’s about driving results.

Additional Resourceshttp://office.microsoft.com/en-us/project-help/earned-value-analysis-for-the-rest-of-us-HA102840086.aspx

http://office.microsoft.com/en-us/project-help/applying-earned-value-analysis-to-your-project-HA001021179.aspx

www.pm-providers.com

Microsoft Project Earned Value Fields• ACWP Fields• Baseline Cost (BAC) Fields• BCWP Fields• BCWS Fields• CPI Fields• CV Fields• CV% Fields• EAC (Task Field)

• Earned Value Method (Task Field)• Physical % Complete (Task Field)• SPI Fields• SV Fields• SV % Fields• TCPI (Task Field)• VAC Fields

Fields values are calculated by Project based on Task level data

www.pm-providers.com

Q&A

EVM De-Mystified

Anaheim, CA | February 2-5, 2014