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Using Earned Value Management System EVMS

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Managed in a coordinated way - ACT-200 Coordinating ... Thank you for Listening. Pat A. Eigbe, PMP , -- Hi-Tec Systems. x. 5-7857 ... – PowerPoint PPT presentation

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Title: Using Earned Value Management System EVMS


1
Using Earned Value Management System (EVMS)
  • Briefing for ATC Engineering Test Division
    (ACT-200) Managers and Leads

2
Briefing Objectives
  • What is a Project?
  • What is a Program?
  • What is Project Management?
  • What is EVMS?
  • Why do we need EVMS?
  • How is EVMS Implemented?
  • Who will implement it?

3
Project Management Terms - IV
  • Project -
  • A temporary endeavor
  • To create a unique product or service.
  • Program -
  • A group of related projects - e.g. DSR, VSCS,
    URET, STARS, ...as part of NAS
  • Managed in a coordinated way - ACT-200
    Coordinating
  • Usually include elements of ongoing operations

Complements of Project Management Institute
4
Project Management Terms - I
  • PM is the Application of Knowledge, Skills,
    Tools, and Techniques to Project Activities to
    Meet or Exceed Stakeholders Needs
    Expectations.
  • Knowledge of general management practice
    relevant application areas.
  • PM overlaps general management in many areas but
    they are not synonymous - e.g DSR vs.
    Division/Branch.

5
Project Management Terms - II
  • Work Breakdown Structure (WBS) A
    deliverable-oriented grouping of project elements
    which organizes and defines the total scope of
    the project. Each descending level represents an
    increasingly detailed definition of a project
    component. Project components may be products or
    services.

6
Project Management Terms - III
  • Work Package Lowest Level of the WBS that may
    be Divided into Activities.
  • OBS An Organizational Chart Relating Work
    Packages to Organization Units.
  • Responsibility Matrix Relates Organization
    Structure to WBS Ensures that each Element of
    the Projects Scope of is Assigned to a
    Responsible Individual.

7
Earned Value Management System (EVMS) - I
  • EV - Tool for Measuring Project Performance
  • Compares work actually accomplished to work
    planned to determine if cost schedule
    performance is as planned
  • EV is an Early Warning System
  • Helps management make proactive decisions to keep
    projects on course

8
Earned Value Management System (EVMS) - II
  • EV Integrates Cost, Scope Schedule measurements
  • EV Involves Calculating 3 key values for each
    activity
  • Budget - BCWS
  • Actual Cost - ACWP
  • Earned Value/Physical Progress - BCWP
  • Basis for variance analysis

9
Planning for EVMS - I
  • Create a work breakdown structure
  • Organize work into discrete work packages and
    activities
  • Allocate a budget to each of the activities
  • Develop a schedule and Assign resources to
    accomplish each activity on the schedule
  • Be sure to include all work in the schedule

10
Planning for EVMS - II
  • Award performance credit for physical complete
    using any of these methods
  • 0-100
  • Short duration tasks lt 160 hours
  • EV is Zero until activity is complete
  • 50-100
  • Duration less than 600 hours
  • 50 at start of activity 50 at completion

11
Planning for EVMS - III
  • Interim milestone
  • Duration less than 600 hours
  • Based on completed milestone for task
  • Level of Effort (LOE)
  • Long duration consistent tasks
  • Difficult to measure - no deliverables
  • Measured by duration of time used e.g. 10 weeks
    support is 50 complete at 5 weeks

12
Tracking Analysis
  • Each update cycle/Reporting Period
  • Monthly or Bi-Monthly
  • Obtain physical complete for each task
  • Calculate EV for each task
  • Sum up EV for all tasks as project EV
  • Calculate actual expenditure for actual work
    completed during the period
  • Compare the Cumulative EV to Actual expenditure

13
Elements of EV Analysis - I
  • Performance indices relate value of work
    performed to dollar spent. e.g. CPI 0.65 means
    that for every dollar spent, actual value of the
    work performed is 0.65.
  • Cumulative CPI used to forecast project cost at
    completion (also slide 17)
  • Cumulative SPI used to forecast project
    completion date (also slide 17)

14
Elements of EV Analysis - II
  • Cost Variance - Difference between budgeted cost
    of work scheduled actual cost of work performed
  • CV BCWP - ACWP
  • Schedule Variance - Difference between budgeted
    cost of work scheduled actual cost of work
    performed
  • SV BCWP - BCWS

15
Elements of EV Analysis - II
  • SPI - BCWP/BCWS
  • SPI gt 1.0, Project Schedule performing as
    planned or better
  • SPI lt 1.0, Project not performing as planned -
    needs help

16
Elements of EV Analysis - III
  • CPI - BCWP/ACWP
  • CPI gt 1.0, Project Cost performing as planned or
    better
  • CPI lt 1.0, Project Cost not performing as planned
    - needs help
  • Over/Under Budget - CAC - BCWS

17
Project Cost Schedule Forecast Methods
  • Estimate at Completion (EAC) is total cost to
    complete an activity, work package, or a project
    expressed as
  • EAC Actuals-to-date Estimate to complete
    (ETC)
  • Cost EAC - BAC/CPI
  • Schedule EAC - BAC/SPI

18
EV Reporting
  • Interpret the results of the calculations -
    Slides 8 - 11
  • Take or recommend corrective action as necessary

19
Conclusion
  • EVMS provides management with an effective
  • tool for program planning and control
  • early warning system for program mgt.
  • EV Integrates Cost, Quality, Schedule
    objectives when appropriately implemented
  • Must a baseline for measurements, and control at
    the start of project.

20
References
  • Project Management Institute (PMI), 1996. A Guide
    to the Project Management Body of Knowledge (the
    PMBOKTM Guide) -
  • Ray W. Stratton, 1999. Improving SPI and CPI
    Calculations on LOE Heavy Programs, Proceedings
    of the 30th Annual PMI Seminars Symposium
  • Fleming and Koppeman, 1996. Earned Value Project
    Management.

21
Thank you for Listening
  • Pat A. Eigbe, PMP, -- Hi-Tec Systems
  • x. 5-7857
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