PM592 Week 5 Discussion

7/11/13 Topic Print View

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Week 5: Project Monitoring and Control - Discussion

Earned Value Calculation (graded)

This week we are introduced to Earned Value techniques. Why is this method any different than just comparing thetraditional budget to date with the expenditures to date? After reviewing the EV technique and calculations, does themethod have any use when monitoring a project?

Responses

Response Author Date/Time

Measuring Work Completed Professor Orr 6/1/2013 9:41:06 AM

How can you avoid subjectivity w hen measuring w ork completed? What provisions should be incorporated into the project plan

to make measurements more accurate?

Regards,

Susan

RE: Measuring Work

Completed Varune Ramoutar 6/3/2013 11:39:41 AM

One of the ways we avoid subjectivity in Oil and Gas construction is to have independent

Quantity Surveyors check the work to see what is actually erected and thus give credit for

what was actually accomplished and nothing more. This is useful because superintendents andother work group leaders may sometimes tend to inflate the work performed so they can be

given extra credit.

In project plans a provision could be incorporated where a certain percentage of the work is

held until it is verified that the task is 100% complete e.g. if a piping system is being installed

then the project plan can state that 10% will be held until it is verified that the piping systemhas been tested and paperwork signed off as accepted by the client. Only when this is done

will the final 10% be credited to the piping system.

RE: Measuring

Work Completed Maria Ventura 6/3/2013 9:40:22 PM

Hello class,

Project Managers can avoid subjectivity with work completed by using (EVM) EarnedValue Management.

Budgets are “earned” as work is completed = EARNED VALUE

This is a project management technique which focuses on the completion of authorizedwork and its authorized budget, called the "earned value." for the purpose of monitoringperformance and predicting the final required costs and time necessary to finish aproject.



Source: http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA403737

Thank you//

RE:

Measuring

Work

Completed

Esperanca Rosa 6/3/2013 11:35:26 PM

Hi class,

Earned Value gives managers greater idea of potential risk areas in theproject. EV analysis is a method of performance measurement. Additionally,EV is a program that manage techniques that uses “work in progress” toindicate what will happen to work in the future. Earned Value is anenhancement over traditional accounting progress measures. Traditionalmethods focus on planned accomplishment (expenditure) and actual costs.Earned Value goes one step further and examines actual accomplishment.

Reference:

http://www.pmiglc.org/COMM/Articles/0410_nagrecha_eva-3.pdf

RE: Measuring Work

Completed Philip Effiong 6/4/2013 8:29:07 AM

While we will never fully remove subjectivity from the design process, there are ways that you canmake better team decisions by doing exercises that create data and numbers by which thedecisions become apparent, so there is no discussion about whose opinion is right. This removesthe tension and debate that happens when 2 or more people on a team have perfectly validarguments for a direction, but the project gets stalled because consensus must be reached priorto moving on. However, the following plan could be incorporated into the project plan to makemeasurement more accurate

Create a unified focusDefine the problem visually, in contextCollect user dataCreate potential solution(s)Test and measure for accuracy

RE: Measuring Work

Completed Herminio Dionisio 6/4/2013 1:04:21 PM

Because projects are often defined by their constraints w hich are the scope, cost and time better know n as the

triple constraints, one of the most signif icant challenges w ith running a project has to do w ith maintaining an

accurate monitoring and control system for its implementation. Project monitoring and control are the principal

mechanisms that allow the project team to stay on top of a project's evolving status as it moves through the various

life cycle stages tow ard completion. Rather than adopting a "no new s is good new s" approach to monitoring and

control of projects, w e need to clearly understand the benefits that can be derived from careful and thorough status

assessments as the project moves forw ard. We need to be fully aw are of the "w hat and w hen" questions. What

information concerning the project should be measured, and w hen are the best times to measure it? This is how to

http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA403737

http://www.pmiglc.org/COMM/Articles/0410_nagrecha_eva-3.pdf



develop systematic project control that is comprehensive, accurate, and timely.

RE: Measuring Work

Completed Dwayne Grant 6/5/2013 6:44:16 PM

If you want to take the subjectivity out of measuring the work completed you must have a way ofmeasuring the work completed by all the people involved in the project. A good example of that isthe project administrators may look at the project one way, and the project manager may look atthe project another way. You need to have a way of measuring the work completed in aconsistent manner and it is a work breakdown structure. The work in the work breakdown cleardefines the deliverables and the times it takes to complete the work packages. If you want tomake sure that your project has accurate estimates you would use historical data or subjectmatter experts.

RE: Measuring Work

Completed Bruce Foley 6/6/2013 10:25:54 PM

When evaluating w ork performance you should follow the follow ing guidelines:

1. Choose discrete objective measures

2. In complex w ork packages choose measures that align w ith the objectives

3. Acknow ledge w ork packages that are completed in a single month uniquely

4. Make sure w ork packages of signif icant value are acknow ledged accordingly

5. Avoid measuring LOE

SOURCE: w w w ,cms.gov

Does behind schedule mean over budget? Professor Orr 6/3/2013 11:37:51 AM

So, if I'm behind schedule, am I automatically over budget?

Regards,

Susan

RE: Does behind schedule mean

over budget? Varune Ramoutar 6/4/2013 11:14:42 AM

When a project is behind schedule it means that they have not accomplished the amount of

work they planned to accomplish to that point. Thus the work amount completed is less thatwhat it was planned to be. Relating this to budget the company would have planned to spend

a certain amount by accomplishing the planned amount. Since they did not accomplish what

they planned then logically they may be under budget. However this may not be the case they

may have accomplished less but spent the budgeted amount or they may have even spentmore than what was budgeted.

So being behind schedule does not mean over budget even though this possibility exists.



With the earned value method the budget and the schedule are independent of each

RE: Does behind

schedule mean

over budget?Cauretta Bell 6/5/2013 2:07:02 PM

Most people w ould automatcally assume that w hen a project is behind schedule you w ill be over budget.

They forget the beauty of technology to help you w ith other altenatives to keep you from being ove

budget. It is not true that a project over budget does not mean that it is behind schedule


over budget? Maria Ventura 6/4/2013 1:33:14 PM

Hello class,

Being behind schedule does not necessarily mean that you are over budget by the end of theproject. In some cases you may be able to make up the cost by finishing other tasks that comelater in the project faster than expected to make up the different.

Thank you//

RE: Does behind schedule

mean over budget? Nishan Ragoonanan 6/4/2013 2:44:00 PM

I think the tw o things are distinct concepts, you have a budget and you have a schedule, they're both plans, or better

yet estimates based upon some assumptions made early on on in the project. Being behind schedule does not mean

your automatically over budget, as an example, if I had to build a skyscraper and I had budgeted X dollars to build and

it w as going to take 5 years to build, if the permitting got stuck in red tape for 12 months and I had only set aside 4

months, I haven't spent any extra money, I'm just behind schedule by 8months. If I w anted to still make my schedule

of 5 years, then I might have to go over budget and w ork some w eekends to make up the schedule delay, if my client

is ok w ith an 8 month delay, then w e're still on budget.

RE: Does behind

schedule mean

over budget?Tanika Thomas 6/4/2013 9:27:47 PM

I don't believe that behind schedule means over budget; however beingbehind schedule can "cause" one to go over budget. This would happenwhen trying to get caught up to avoid longer delays. This could be writtenin the contract if work is contracted out with clauses that could tie taskcompletion to rewards or penalties.

RE: Does

behind

schedule

mean

over

budget?

Chukie Okunzua 6/4/2013 11:06:58 PM



other therefore behind schedule does not translate to automatically being over

budget. Budget deals w ith the amount of money approved to complete authorised

w ork, w hile schedule deals w ith detailed phase plan of the authorised w ork to be

done. If a project is behind schedule over budget may only result if more resources

are added to bring the project to planned schedule. The project could in the alternative

be allow ed to exceed planned duration at the approved budget.

RE: Does

behind

schedule

mean

over

budget?

Esperanca Rosa 6/5/2013 8:57:21 AM

Hi class,

Earned value is a technique used to balance cost, schedule, andscope of a project. In other words, it measures the evaluation of theperformance of a project and its progress. Being behind schedule,doesn’t means the project is over budget. Depending on the type ofproject or its progress, occasionally, there are some tasks that arenot completed on time. So the initial approved budget could be overbudget before project completion. On the other hand, there are someprojects in the right ongoing path (80% of completion) and its budgetsometimes is under the expected budget amount. This means theproject is getting its right schedule completion and under budget withsometimes isn’t good too. Projects have to be not over and not underbudget, they should be balanced. Thus, analyze the EV (scope,schedule, and cost) will avoid being over budget.

Regards,

Esperanca


over budget? Huyen Bui 6/5/2013 3:43:00 PM

In order to have a correct answ er, w e must calculate both CPI and SPI, just one of them alone cannot make an

assumption that if I'm behind schedule then I'm automatically over budget and vice versa.

The SPI calculate by EV/PV, there's no cost factor involve. While the CPI=EV/AC

Therefore, if both SPI and CPI <1, then w e can interpret that the project is behind the schedule and over budget


mean over budget? Mary Hart 6/5/2013 7:56:33 PM

The earned value concept gives the performance of a project dimension as:One: Work scheduled (PV).Two: work actually performed (EV).Three: Cost associated to EV.(AC)

The work scheduled and cost are based on estimates done individually. We will have to make anearned value analysis to provide a right answer of the cost at a given point of the project andschedule performance . A project behind schedule does not automatically mean over budget.




mean over budget? Philip Effiong 6/6/2013 8:15:11 AM

Behind schedule dos not mean over budgeting. These are tw o separate issues in project management. Factors

responsible for over budgeting are not necessarily the same factors responsible for being behind schedule.


mean over budget? Herminio Dionisio 6/6/2013 9:45:58 PM

This is one easy question for someone w ho is not in project management. The f irst answ er that w ill surely come into

his mind is yes it is over budget or, no it is not. It is all depend on his/her ow n personal perception about the project.

But being in project management ourselves, w e must not be tricked by giving an answ er right aw ay but w ill check

w ith utmost care about the actual status or performance of the project before w e give any specif ic answ er.

Accurate information is very critical w hen the issue is about the project constraints, assumptions and perceptions

must not be used but based on fact. The only w ay w e can answ er this is to perform an Earned Value Analysis

based on the actual cost and actual schedule versus the planned cost and planned schedule, and most importantly,

be able to calculate the value of our money using the base lines of the project.


mean over budget? Bruce Foley 6/8/2013 11:51:23 PM

Behind schedule is not necessarily a precursor to being over budget. Being behind schedule could have many root

causes.One of w hich may be the fact that the reason for falling behind schedule could have been due to the

discovery of a problem and it being addressed as part of f ixing a problem that could cause a greater delay later on.

Causes of People Overstating Progress Professor Orr 6/4/2013 10:49:14 AM

These are good responses, but I'm thinking more of how can you remove subjectivity from the human aspect. What causes

people to overstate progress, or w ork completed?

Regards,

Susan

RE: Causes of People

Overstating Progress Serge Ndongo 6/4/2013 2:37:29 PM

I think confidence and reliability in w hat has been accomplished w hile w orking on a project are elements that could

cause people to overstate progress and the w ork completed. Sometimes w hen you are w orking on a project and

firmly believe that you are on the right track, not only you feel good about w hat you are doing but it increases your

confidence. This is a natural feeling that many of us have. On the other hand that confidence is tested w hen some

w ays of improvement are found and applied on the same project. In the end, after all the suggestions, review and

improvements made on the project this usually lead people to be very satisf ied w ith the w ork done; that's how they

become very happy w ith the w ork completed and this can lead them to overstate their progress.

RE: Causes of

People

Overstating

Progress

Chukie Okunzua 6/5/2013 9:09:03 AM

Serge to address the subjectivity issue you raised is the reason the earned value project



management technique was designed. The earned value management technique providefor continuous measurment of actual performance result which are matched against theplanned value and the earned value. The planned value provides the project manager withthe actual authorized work to be completed at a point in time and the authorised budgetfor that work at that point in time. The earned value looks at how much of the authorizedwork that has been done at a point in time and the authorized budget for that work. Theactual work completed with the actual cost of the work is then compared with theplanned and earned value. With this both ambiguity and subjectivity are eliminated andthe true position of the project established relative to the project plan at commencementof project execution phase.

RE: Causes

of People

Overstating

Progress

Cauretta Bell 6/8/2013 9:42:58 PM

You are right about utilizing plan value and actual w ork value for the project to eliminate

overstating the completion value for the project. Some of the reasons w hy projects are

overstated pertaining to the completion date are the project time believes or simply feel like

they have less w ork to do. The have fail to review the items along the critcal path and to see

w hat the potential areas w ould be,


Overstating Progress Nishan Ragoonanan 6/5/2013 7:13:20 AM

One w ay that progress can be overstated on a project is to look at items that are complete but aren't on the critical

path. A large number of complete items not on the critical path can give a false sense of progress w hilst those

critical to the projects completion remain undone.


Overstating Progress Herminio Dionisio 6/6/2013 9:58:13 PM

This is w hat I can defined to be an issue of "Hope Creep". Hope Creep happens w hen a project team member falls

behind schedule but reports that it is on schedule, hoping to get back on schedule by the next report date. Hope

creep is a real problem for team member w ho do not w ant to give bad new s, so they are prone to tell that their w ork

is proceeding according to schedule w hen in fact it is not. It is their hope that they w ill catch up by next report period

and make up for the slippage, so they misled the report that the project is on schedule. As a Project Manager, w e

must be able to verify the accuracy of the status reports received from the team members, but this does not mean

that w e have to check into the details of every status report. Random checks can be used effectively.

RE: Causes of

People

Overstating

Progress

Dwayne Grant 6/8/2013 6:41:20 PM

That is a good point and I'm good to add hope creep to my project managementterminology. However, our job as a project manager is to make sure what we reportedhappened needs to have actually happened. So, at critical milestones we need to makesure the work was actually accomplished, and some of this can be accomplished bymanagement by wandering around. This is especially important in those criticalmilestones involved with any project.



RE: Causes of

People

Overstating

Progress

Cauretta Bell 6/9/2013 9:55:49 PM

You are right! This is a definite issue. These individuals believe that they w ill be able to correct the

situation and if the PM does not follow up w ith the team members regularly w hat tends to occur w ould be

a project w ill suffer if each member is not honest and the pm is no active


Overstating Progress Mary Hart 6/9/2013 7:31:30 PM

I f ind that the a w ay of removing subjective effects in progress of w ork completed is including objective metrics as

Earned Value method.

When the right metrics is not in place in the project plan, subjectivity w ill be present.

EVM Joel Khan 6/5/2013 6:33:35 AM

Because EVM has the ability to combine measurements of :

scope

schedule

and cost,

in a single integrated system, Earned Value Management is able to provide accurate forecasts of project performance problems,

w hich is an important contribution for project management.

Early EVM research show ed that the areas of planning and control are signif icantly impacted by its use; and similarly, using the

methodology improves both scope definition as w ell as the analysis of overall project performance. More recent research

studies have show n that the principles of EVM are positive predictors of project success. Popularity of EVM has grow n

signif icantly in recent years beyond government contracting, in w hich sector its importance continues to rise (e.g., recent new

DFAR rules), in part because EVM can also surface in and help substantiate contract disputes

Essential features of any EVM implementation include

a project plan that identif ies w ork to be accomplished,

a valuation of planned w ork, called Planned Value (PV) or Budgeted Cost of Work Scheduled (BCWS), and

pre-defined “earning rules” (also called metrics) to quantify the accomplishment of w ork, called Earned Value (EV) or Budgeted

Cost of Work Performed (BCWP).

EVM implementations for large or complex projects include many more features, such as indicators and forecasts of cost

performance (over budget or under budget) and schedule performance (behind schedule or ahead of schedule). How ever, the

most basic requirement of an EVM system is that it quantif ies progress using PV and EV.

Establishing Cost and Progress Metrics

during Planning Stages Professor Orr 6/5/2013 11:20:32 AM

More excellent responses. How do you establish metrics for measuring actual cost and progress during the planning stages of

the project?

Regards,

Susan

RE: Establishing Cost and

Progress Metrics during

Planning StagesVarune Ramoutar 6/5/2013 12:05:28 PM



In Oil and Gas construction we establish periodic durations (weekly, monthly etc) and

milestones like 10%, 25% completion etc by which we should have certain work completed.

The metrics for the work can be tonnage of structural steel erected, linear feet of pipe run and

tested, square feet of concrete poured, length of electrical cable run and terminated etc. So

during the planning stage we could stay that every month we expect to have 10 tons of

structural steel erected. Also we can say at 25% completion we should have 500 tons of

structural steel erected, 200 linear ft of pipe installed, 500 sq ft of concrete poured and 500 ft

of electrical cable run and terminated.

RE: Establishing

Cost and

Progress Metrics

during Planning

Stages


Modified:6/6/2013 10:08 AM

Varune I agree with you that establishing milestone and the duration for accomplishingthem are important criteria for quantifying cost. In developing a project metrics and costcriteria for assessing progress it is important that we define at the planning stage theacceptance criteria for the deliverables and end products. We may also look at thefunctional attributes of the project deliverables and end products. Combining acceptancecriteria , the functional attributes and matching them with the deliverables andmilestones can help establish measuring unit for the project. The actual cost will becalculated from the cummulative cost of all the input that produced the deliverables ormile stone to an acceptable standard by the project stakeholder or customer. Units maybe volume, lenght, weight,, rate, quantity etc. The final metric will be a function of theproject type, industry and project goal.

RE:

Establishing

Cost and

Progress

Metrics

during

Planning

Stages

Tanika Thomas 6/6/2013 11:40:23 PM

Great explanation Varune and Chukie. Making sure there areinterval check points in all projects helps to identify and measurerisk, progress, problems and need for adjustment.

Successful Project Management Principles & Controls aresummarized as three main methods:

1. Continually focus on the Project Plan as the basis ofyour project

2. Continually update the Project Plan (especially theschedule, scope, and budget

3. Regularly (better still, at scheduled intervals or on


threadcontent.next.ecollege.com/(NEXT(c2554bec91))/Main/CourseMode/Topic/TopicPrintView.ed?topicID=29456101&sortBy=Title&sortOrder=Ascending&… 10/16

achievement of milestones) measure status andproject progress against the Project Plan - and makeadjustments to get back on track, if necessary

http://www.mastering-project-management.com/project-management-principles.html

By keeping a watchful eye on the finances, actual work andschedule helps to identify the success of project and of a projectmanager.

RE: Establishing Cost and

Progress Metrics during

Planning StagesMary Hart 6/8/2013 9:43:07 PM

Modified:6/8/2013 10:04 PM

How do you establish metrics for measuring actual cost and progress during the planning stages of the project?

I f ind that the metrics of measuring actual cost of a project w ill depend on the type of project, it's tasks, the existence

or no of established method given by the organization or by lessons learned due to previous experience by others or

myself.

I w ill have to f ind out w hat metrics w orks best depending on the project.

For example if the project w as in an Oil & Gas area I w ill have to consider the established metrics for measuring

actual cost and progress during the planning stages given by the organization as mention by Varune. But if the

project w as an IT project I w ould be inclined to establish actual costs metrics based on the project milestones due to

the complexity of the tasks in this area, as discussed in the last class.

Examples of Use of Earned Value Professor Orr 6/6/2013 11:11:00 AM

Good comments. If you are using EV, give an outline of the system and evaluate its effectiveness. If not, w hat are some best

practices for EV?

Regards,

Susan

RE: Examples of Use of Earned

Value Esperanca Rosa 6/6/2013 12:26:05 PM

Hi Dr. Susan and class,

As per my research, EV is an integrated management system to coordinate the work scope,schedule, and cost goals of a program or contract, and objectively measures progress towardthese goals. EVM is a tool used by program managers to:

1- Quantify and measure program/contract performance

2- Provide an early warning system for deviation from a baseline

3- Mitigate risks associated with cost and schedule overruns

4- Provide a means to forecast final cost and schedule outcomes.

http://http//www.mastering-project-management.com/project-management-principles.html



Source:

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

Thanks,

Esperanca

RE: Examples of

Use of Earned

ValueSerge Ndongo 6/7/2013 3:43:12 AM

The most pow erful measurement of project progress is Earned Value metrics, the w ay of measuring

actual versus planned progress. "Earned value" is so attractive because the term conjures positive

visions, emotions and expectations on w hat earned value metrics w ill do. But in reality, if a project

manager does not measure and then present the metrics properly to project sponsors, the numbers can

produce unpleasant mood sw ings, premature celebrations and raging arguments. Here are some some

tips if measuring Earne-Value:

1. Qualify activities that earn value. One of the quickest roads to failure is to include all project

activities in determining earned value. This can set up the false indication of true progress by

incorporating administrative tasks like the kick-off meetings, project status meetings and other activities

that are not central to actual progress. To avoid misleadingly optimistic earned value, include only core

items w hen determining earned value — for example, high- effort and -risk activities, and external

dependency milestones.

2. Set standard earned value ranges. Another common trap in calculating earned value is allow ing

optimistic or dow nright untrue declarations of progress. You've all probably heard, "We are 99 percent

complete, and all w e have left to do is..." time and time again.

To avoid this trap, set up conservative ranges of progress completion. For example, you may set a

conservative percentage-complete tier of 75 percent if a deliverable is completed, and designate the

remaining 25 percent to the approval process by the project sponsor.

3. Clearly communicate earned value to project sponsors. Avoid tense moments by

communicating to project sponsors, in terms they understand, w hat earned value can and cannot do.

Add relevance and context by combining earned value w ith other project readout content, and tailor your

communications to sponsors through visualization techniques. For example, present a graph show ing the

schedule of planned value against the actual earned value of these deliverables for the project.

Earned value can be one of the most pow erful and revealing indications of true project progress — as

long as it is properly determined and presented.

http://blogs.pmi.org/blog/voices_on_project_management/2013/05/making-earned-value-more-valua.html

RE:

Examples

of Use of

Earned

Value


While Earned Value methodology is great for assessingproject progress and control it is also important to note it shortcoming and how to overcome it. EV information may at times beinaccurate and misleading if the project manager does not digfurther into activities at the work package level. Excess overheadcharges that originate from outside the project may producenegative CV (over run) and giving the impression that project isnot progressing well. A positive CV (underrun) may arise from yetto be paid bill on completed package(s). Inaccurate estimation of

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

http://blogs.pmi.org/blog/voices_on_project_management/2013/05/making-earned-value-more-valua.html



percentage complete may also arise where work cannot beuniformly measured.To avoid inaccurate information the project manager need toanalyse EV, PV, AC, SPI and SPI at the package level anddetermine the causes of variation where it is reported by thePCAS system.

RE: Examples of Use

of Earned Value Huyen Bui 6/9/2013 5:25:20 PM

Great one Esperanza, not only the triple constraint, but the EV has helped forming a single management

system that can apply tow ard both service and production.When it comes to using an EV, most

organizations follow a learning curve. The purpose of this paper is to help organizations f latten the curve,

arming them w ith EV best practices. These best practices are broken dow n into f ive guideline areas:

• EV description

• EV use

• Work Breakdow n Structure (WBS) and Control Account

• Cost and schedule integration

• Earned Value calculation

RE: Examples of Use of

Earned Value Philip Effiong 6/7/2013 7:58:52 AM

Earned Value is a project management technique that relates resource planning to schedules andto technical cost and schedule requirements. All work is planned, budgeted and scheduled ontime-phased "planned value" increments constituting a cost and schedule measurement baseline.There are two major objectives of an earned value system: to encourage effective internal cost andschedule management systems and to be able to provide timely and reliable data produced bythese systems for determining project delivery status.

The Earned Value band displays the date for which the earned value is valid. Since teammembers continue to enter time past this date, once the earned value has been calculated theEV (BCWP), BAC and EAC remain constant until such time as the background execution hasbeen performed. The AC (ACWP) is updated immediately when additional time is entered and theresulting indices calculations are performed. Since these values are based on up to date EV(BCWP) they may not reflect the current situation.

http://publib.boulder.ibm.com/infocenter/ratportm/v7r1m1/index.jsp?topic=/com


Earned Value Herminio Dionisio 6/8/2013 4:05:30 PM

Effective control system require accurate project measurement mechanisms. When w e have some sense of the

original base line and a method for accurately measuring progress, w e can compare the tw o pieces of information

that w ill allow us to measure the ongoing status of the project. We need a measurement system that can provide

results and information as quickly as possible. Once w e detect signif icant deviations from the project plan, w e have

a clear cut w arning signal w hen it becomes necessary to engage in some form of corrective action to minimize or

remove the deviation. This is the beauty of Earned Value Analysis. It integrates the triple constraints of the project

w hen effectively controlled, the success or failure of the project purely rely on it.


Earned Value Joel Khan 6/9/2013 10:05:26 AM

Some best practices for EV:

http://publib.boulder.ibm.com/infocenter/ratportm/v7r1m1/index.jsp?topic=/com



The single most important step that a project manager and control account manager can take to develop and

implement a meaningful EVM plan is to define ―strong w ork packages. Strong w ork packages have the follow ing

characteristics:

A clear definition of scope;

A single responsible manager;

A time-phased (say, monthly) budget;

A discrete measure of earned value w ith a clear definition of completion;

Accurate cost and performance tracking.

Reference: http://w w w .cms.gov/Research-Statistics-Data-and-Systems/CMS-Information-

Technology/EarnedValueManagement/Dow nloads/evm-best-practices.pdf

Alternatives to Earned Value in Monitoring

and Controlling Professor Orr 6/7/2013 8:18:32 AM

More excellent comments. If you are not using EV as a part of your monitoring, w hat are the alternatives?

Regards,

Susan

RE: Alternatives to Earned

Value in Monitoring and

ControllingChukie Okunzua 6/7/2013 9:39:10 AM

For large project an alternative to EV is the critical ratio method where a set of critical ratios arecomputed for the project.

Critical ratio =( Actual progress / Sheduled progress) X Budget Cost / Actual cost).

When critical ratio is equal to 1, the project is probably on target. The further the critical ratio isaway from 1 the more important to investigate the project

RE: Alternatives to

Earned Value in

Monitoring and

Controlling

Maria Ventura 6/7/2013 7:43:07 PM

Hello class,

One of the methods used as an alternative for EV is the "Milestone Method".Milestone Method - Work packages that use objective indicators, have measurablemilestones. The Task Manager plans discrete work efforts. These discrete work effortshave definable objectives with predetermined values. The Task Manager determines thata definable objective is complete when the milestone is recorded as complete. TheMilestone Method is preferred over all other EVTs. The Task Manager should selectmilestones which meaningfully assess progress. The characteristics of the milestone method are:

(A) A product or event which is clearly unambiguously defined.

http://www.cms.gov/Research-Statistics-Data-and-Systems/CMS-Information-Technology/EarnedValueManagement/Downloads/evm-best-practices.pdf



(B) Each milestone is owned by the performer.

(C) Clear, Objective criteria for measuringt accompishment, which is always quantified.

(D) Directly related to the work package work scope.

(E) Each milestone is weighted in relationship to the time-phased budget.

(F) Each milestone is scheduled and related to the task plan, intermediate, and prjectmaster scheudle

Source: http://guidebook.dcma.mil/79/evhelp/perform.htm

Thank you//

RE:

Alternatives

to Earned

Value in

Monitoring

and

Controlling

Tanika Thomas 6/7/2013 9:51:25 PM

Also as discussed in class and presented by Bruce is using Fixedformula (25/75; 50/50; 75/25 etc.) which is typically used for non-recurring tasks. This is done by measuring what is earned by startof the project and how much is earned when the task iscompleted. This method is not commonly used but is best forprojects that are less than 2 years. ('Earned Value Project Management' by Q.W. Fleming &

J.M.Koppelman)



ControllingDwayne Grant 6/9/2013 10:23:56 AM

I did some research and found out that as part of earn value monitoring there are somealternatives, and one of these concepts was developed by the Core Consulting Group. Theyrecommend that this alternative be used on business and technology projects, and this method iscalled the gate value method. The method is supposed to be simpler and can provide significantbenefits into what is now being called visibility cost.

http://coreconsulting.com.au/gate-value-method-a-new-approach-to-earned-value/



Controlling

Bruce Foley 6/9/2013 1:42:13 PM

http://guidebook.dcma.mil/79/evhelp/perform.htm

http://coreconsulting.com.au/gate-value-method-a-new-approach-to-earned-value/



An alternative to cost variance is Schedule Variance (SV): This is the completed work when compared to the

planned schedule. Schedule Variance is computed by calculating the difference between the earned value and the

planned value, i.e. EV – PV. A positive Schedule Variance tells you that the project is ahead of schedule, while a

negative Schedule Variance tells you the project is behind schedule. Monitoring Schedule Variance is critical to

delivering the project on-time.

Alternatives to EV Monitoring Professor Orr 6/8/2013 12:29:57 PM

More excellent comments. If you are not using EV as a part of your monitoring, w hat are the alternatives?

Regards,

Susan

RE: Alternatives to EV Monitoring Varune Ramoutar 6/8/2013 1:01:11 PM

One of the alternatives to EV is the Gate Value Method. This was initially developed byOffice of Government Commerce (OGC) UK. This method basically deals with

monitoring and checking progress at specified "gates" throughout a project life. Similar to theMilestone method mentioned previously. This method focuses on when should the project

have achieved a particular monetary value thus checking the planned value at key projectgateways as opposed to work packages and specified time periods. Ref: http://coreconsulting.com.au/wp-content/uploads/2012/07/Gate-Value-Method-

overview.pdf

RE: Alternatives to EV Monitoring Herminio Dionisio 6/8/2013 4:18:01 PM

One w ay of testing the status of the project is using the Gap Analysis. Gap Analysis refers to any measurement

process that f irst determines the goals and then the degree to w hich the actual performance lives up to those goals.

The smaller the gaps betw een planned and actual performance, the better the outcome. Other methods for

monitoring project progress is milestone analysis because those are the stages of the project that represents a

signif icant accomplishments to project completion, and the other one is the tracking Gantt chart w hich is very useful

for evaluating project performance at specif ic points in time w hich identif ies the satge of completion each task has

attained by a specif ic date w ithin a project. It is possible to measure both positive and negative deviations from the

schedule baseline.

RE: Alternatives to EV Monitoring Joel Khan 6/8/2013 7:36:16 PM

Modified:6/9/2013 10:01 AM

Other professional methods for measuring budget and schedules generally only monitor the percent of the time

through the schedule and make the often mistaken assumption that this is also the percent that the project should be

through the budget. But cost and project progress generally are not evenly expended through a project. The reason

earned value stands above the alternatives is that it accurately deals w ith this reality. Earned value w arning signals

become available to management as early as 15 to 20 percent into a new project, in ample time to take corrective

measures.

Reference: http://w w w .projectsmart.co.uk/how -to-implement-earned-value.html

http://coreconsulting.com.au/wp-content/uploads/2012/07/Gate-Value-Method-overview.pdf

http://www.projectsmart.co.uk/how-to-implement-earned-value.html



RE: Alternatives to EV Monitoring Nishan Ragoonanan 6/8/2013 8:45:55 PM

Another alternative to Earned Value is the Zone method w hich is essentially a lightw eight version of Earned Value,

meant for those w ho cannot support the administrative overhead associated w ith Earned Value Management.In the

Zone method, schedule events and labor hours are the only metrics that are used to track project progress and is

based on the principle that project costs are determined primarily by direct labor hours. Using labor hours and the

start and f inish of a given activity, schedule and cost variances from the project baseline can be revealed.

http://w w w .pmhut.com/an-alternative-to-evm-the-zone-method

RE: Alternatives to EV Monitoring Serge Ndongo 6/9/2013 11:59:16 AM

Earned Schedule (ES) can also be used to measure the time progress of the project as an alternative to Earned

Value (EV). For instance ES provides an estimate of duration and milestones completion date. It also provides

forecast indicators much in the same w ay as EV. ES can also integrate and support the risks management activities.

RE: Alternatives to EV Monitoring Huyen Bui 6/9/2013 9:27:31 PM

Another method is the level of effort that alternate from EV. The universally accepted standard

definition and practice for calculating LOE earned value is to set the budgeted cost for work

performed (BCWP) equal to the budgeted cost for work scheduled (BCWS) each performance

reporting period. The LOE method does not measure task schedule performance as it simply

acknowledges the passage of time. Thus, for LOE tasks, the schedule variance (SV) is always

zero. It does, however, provide early cost variance (CV) visibility to a potential overrun on the LOE

tasks.

http://w w w .humphreys-assoc.com/evms/discussion-level-effort-earned-value-method-ta-a-56.html

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PM592 Week 5 Discussion