Earned Value Method

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Earned Value Method
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• Technique for computing
• Performance Percent Complete
• (Perf Cpl)

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Activity percent complete Calculates earned
value according to current activity completion
percentages. Based on the activity percent
complete type, the Act Cpl can be one of Dur
Cpl, Units Cpl, or Phys Cpl. Set the percent
complete type to "Duration" for activities which
are duration driven, for example, administration
tasks and training classes. Set the percent
complete type to "Physical" for activities which
are work-product driven, for example, creating a
document or a product. Set the percent complete
type to "Units" for activities which are work
effort driven, for example, providing a
consulting service.
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Use resource curves/future period buckets Mark
to override the Activity Percent Complete type
for activities that have a resource curve
assigned to, or manually-entered future period
bucket values defined for, at least one of the
resource assignments. If a curve is assigned,
Units Percent Complete is always multiplied by
the Budget at Completion to calculate Earned
Value.
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WBS milestones percent complete Calculates
earned value according to weighted milestones you
define on the WBS Milestones tab. Enter a number
in the Weight cell indicating the significance of
this milestone relative to the others listed. As
each milestone completes, the WBS elements
percent complete is calculated based on the
weight of the completed milestone in relation to
the remaining milestones.
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0/100 Calculates earned value as 100 only after
the activity ends. Until the activity is
complete, calculate earned value as 0. 50/50
Calculates earned value as 50 after the activity
starts and until the activity ends. After the
activity ends, the activity's earned value is
100. Custom percent complete Calculates earned
value as a percentage you specify. This
percentage applies after the activity starts and
until the activity ends. After the activity ends,
the activity's earned value is 100
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Revision and formulae
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Budget at Completion is the baseline Labor Cost
baseline Nonlabor Cost baseline Expense Cost
baseline Material Cost. Same as the baseline
Total Cost.

• EV Perf Cpl BAC

Earned Value Cost or Budgeted Cost of Work
Performed (BCWP)
The activity performance percent complete. May be
based on the Activity Complete, on the 0/100
rule, on the 50/50 rule, etc., depending on the
technique for computing earned-value percent
complete for the activity's WBS. The Performance
Complete specifies what percentage of the
activity's planned worth has been earned so far.
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Budget at Completion is the baseline Labor Cost
baseline Nonlabor Cost baseline Expense Cost
baseline Material Cost. Same as the baseline
Total Cost.

• PV Sch Cpl BAC

Planned Value Cost or Budgeted Cost of Work
Scheduled (BCWS)
The activity schedule percent complete. The
Schedule Complete specifies how much of the
activity's baseline duration has been completed
so far. Computed based on where the current data
date falls between the activity's baseline start
and finish dates. If the data date is earlier
than the baseline Start, the Schedule Complete
is 0. If the data date is later than the baseline
Finish, the Schedule Complete is 100. The
Schedule Complete indicates how much of the
activity duration should be currently completed,
relative to the selected baseline.
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• AC

Actual Cost is the Actual Labor Cost Actual
Nonlabor Cost Actual Material Cost Actual
Expense Cost as of the project data date. Same as
the Actual Total Cost.
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• CV EV AC
• SV EV - PV

Cost Variance is the Earned Value minus the
Actual Cost. A negative value indicates that
Actual Cost have exceeded the Planned Value.
Schedule Variance is the Earned Value minus the
Planned Value. A negative value indicates that
less work was actually performed than was
scheduled.
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• CPI EV / AC
• SPI EV / PV

Cost Performance Index is the Earned Value
divided by the Actual Cost. A value less than 1
indicates that Actual Cost have exceeded the
Planned Value.
Schedule Performance Index is the Earned Value
divided by Planned Value. A value less than 1
indicates that less work was actually performed
than was scheduled.
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• CVI EV AC
• SVI EV PV
• NOTE
• For other related metrics and indicators,
  please explore the Percent Completes and Earned
  Value available column groups within P6 Activity
  screen
• Activating View/ Hint help provides you with
  quick definitions, formulae and explanations.

• Cost Variance Index is the Cost Variance divided
  by Earned Value.

Schedule Variance Index is the Schedule Variance
divided by Planned Value.
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• Technique for computing
• Estimate to Complete (ETC)

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ETC remaining cost for activity Calculates
Estimate To Complete (ETC) values as the
remaining cost to complete an activity (ETC
remaining duration of activity applicable
resource rates). Does not take into account
project measured performance (earned value) and
progress trend as of the data date. (e.g. project
may be behind schedule and/or over budget). May
prove over optimistic if corrective measures are
not taken (optimised schedule and costs).
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ETC PF (Budget at Completion Earned Value),
where PF 1 Calculates Estimate to Complete
(ETC) values as Budget At Completion (BAC
baseline or target budget) less Earned Value Cost
(BCWP budgeted cost of work performed as of the
data date) . Depending on the technique of
calculating EV, project status and performance is
measured and the current ETC is calculated as
what has not been earned so far, relative to the
project baseline.
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Considering either CPI or both CPI and SPI (of
the key performance indicators), when estimating
the work load still to be performed in terms of
resource quantities or costs, provides management
with more realistic data for decisions regarding
control measures. This takes into account
performance achieved so far and bases this
estimation on the progress trend to date for the
project. If there is any bad news (sub-unit
values for one or both of the key performance
indicators resulting in increased costs for ), it
is better to find out as soon as possible when
something can still be done to bring the project
back on track.
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ETC PF (Budget at Completion Earned Value),
where PF 1 / Cost Performance Index
Calculates Estimate to Complete (ETC) values
according to a Performance Factor (PF) of 1
divided by the Cost Performance Index (CPI) CPI
lt 1 resource consumption and associated costs are
over budget gt increased ETC ?
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ETC PF (Budget at Completion Earned Value),
where PF 1 / (Cost Performance Index
Schedule Performance Index) Calculates Estimate
To Complete (ETC) values according to a
Performance Factor (PF) of 1 divided by the
product of the Cost Performance Index (CPI) and
Schedule Performance Index (SPI) . if CPI lt 1 gt
project is over budget ? SPI lt 1 gt project is
behind schedule ? then ETC (manhours, equipment
usage or costs) is increased accordingly. ???
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ETC PF (Budget at Completion Earned Value),
where PF Calculates Estimate To Complete
(ETC) values according to a Performance Factor
(PF) you specify. The Performance Factor (PF)
used to calculate Estimate To Complete (ETC)
values. You can type a new factor based on
historical or statistical data.
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EVM Animation
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
25
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
26
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
27
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
29
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
30
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
32
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
36
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
37
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
41
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
42
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
45
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
46
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
47
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
48
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
49
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
50
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
51
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
52
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
53
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
58
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
59
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
60
Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management and Earned Value
0
100
Planned Spending and Scope
Complete
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
Over budget
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Project Management and Earned Value
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
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Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
67
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
68
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
69
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
70
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
71
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
72
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
73
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
74
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
75
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
76
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
77
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
78
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
79
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
80
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
81
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
82
Project Management with P6 Web Access
0
100
Planned Spending and Scope
Complete
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
Closer to budget
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Project Management and Earned Value
0
100
Planned Spending and Scope
Complete
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
Over budget
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Project Management with P6 Web Access
0
100
Planned Spending and Scope
Complete
Schedule Efficiency
Earned Value
Cost Efficiency
Actual Costs
Projected
Closer to budget
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Practical exercise
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Project scope and assessment settings

• Create a new project
• You may keep the WBS simple (one level deep or
  even the project itself)
• For that WBS element (or the whole project)
  select the Act Cpl as the basis for your Perf
  Cpl
• Use both CPI and SPI to calculate ETC
• (see next slide)

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Project planning phase - schedule

• Add one activity, 10 days long on a 5-day
  workweek - 8h/d calendar.
• The relevant percent complete type for this
  activity is Physical.
• Schedule the project

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Project planning - budget

• Assign one labour resource A working on a similar
  calendar for a total of 80 man-hours, evenly
  distributed over the duration of the activity
• Worker As rate is 10lei/h

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Project baselining

• Create and assign the initial project baseline
  (target schedule and budget)

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Project progress update

• 5 days later, the status of the project is as
  follows
• The activity is started 2 days later than
  initially planned. You estimate a remaining
  duration of 7 days.
• The Phys Cpl is evaluated at 30

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Project progress update (cont.)

• Resource A worked 8h/d for 3 days as expected,
• But an additional labour resource B was needed
  for a total of 24 man-hours.
• Resource B has a rate of 15lei/h

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Questions

• The project as of the current Data Date is
• a) ahead of schedule and within budget
• b) ahead of schedule and over budget
• c) behind schedule, but within budget
• d) behind schedule and over budget
• e) insufficient data

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Questions

• Whats the Estimate At Completion (EAC) for
  Labour units?
• Whats the Schedule Variance (SV)?

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• Further reference
• http//en.wikipedia.org/wiki/Earned_value_manageme
  nt

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• Thank you,
• Tiberiu Ghita-Istrate
• Primavera Project Manager 
• TotalSoft
• 17 Radu Voda str,
• First One Building, 1st floor
• 040273, Bucharest 4, Romania
• Phone     [phone]
• Fax         [phone]
• Mobile  [phone]
• e-mail     tistrate_at_totalsoft.ro
• primavera_at_totalsoft.ro
• web        http//www.totalsoft.ro/