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Earned Value Management

Earned Value Management. How do we get started?. What is it?. A planning process An internal policy A contract requirement A way to measure performance A way to identify problems A forecasting tool A way of doing business. What is it?.

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Earned Value Management

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  1. Earned Value Management How do we get started?

  2. What is it? • A planning process • An internal policy • A contract requirement • A way to measure performance • A way to identify problems • A forecasting tool • A way of doing business

  3. What is it? A way to integrate scope, schedule, and resources all at once!

  4. How is it used? • A reporting tool • Satisfy the contract reporting requirements • “filling the square” • As a decision-making tool • To evaluate project planning • To communicate status • To forecast resource needs

  5. Language of EVM • Budgeted Cost of Work Scheduled (BCWS) • The plan to spend budget • Actual Cost of Work Performed (ACWP) • The costs of the work that has occurred • Budgeted Cost of Work Performed (BCWP) • What was performed (what it should have cost) • This is EARNED VALUE

  6. Language of EVM • Schedule Variance SV = BCWP – BCWS • On/Off plan in dollars (>0 is ahead, 0 is on target, <0 is behind) • Schedule Performance Index SPI = BCWP/BCWS • On/off plan as a ratio (>1 is ahead, 1 is on target, <1 is behind) • Cost Variance CV = BCWP – ACWP • Over/under running (>0 is underrun, 0 is on target, <0 is overrun) • Cost Performance Index CPI = BCWP/ACWP • Return on actual costs (>1 is under, 1 is on target, <1 is over)

  7. Language of EVM • Budget Authority for unknowns • Management Reserve • Budget at Complete, BAC • The budget to do the work • Estimate to Complete, ETC • Estimate of the cost to do the remaining work • Estimate at Complete • Best guess of cost of entire cost of project • Latest Revised Estimate • Contractor’s best guess of cost of entire cost of project

  8. In a Picture EAC Management Reserve BAC PMB Schedule Variance Cost Variance $ ACWP BCWS BCWP time Time Now Completion Date

  9. How do we do this? • Performance Measurement Baseline • Scope • Identify the scope of work • WBS • Extend to Work package level

  10. How do we do this? • Performance Measurement Baseline • Schedule • Arrange work packages in order • Schedule start and finish • Classify work and choose EV technique

  11. How do we do this? • Performance Measurement Baseline • Budget • Identify needed resources (budget) • Spread budget • Calculate Cumulative BCWS

  12. How do we do this? • Performance measurement baseline Graph Cum BCWS

  13. Example Task Cost Start End WP1 9 1 3 WP2 12 3 7 WP3 28 3 4 WP5 8 6 9 WP5 10 1 10

  14. 1 2 3 4 5 6 7 8 9 10 WP1 WP2 WP3 WP4 Monthly BCWS Cumulative BCWS WP5 Example

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