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Session 15 EVM

Earned Value Management (EVM) is a project performance assessment technique that combines schedule, budget, and work completion data to evaluate schedule and cost variances and estimate the total project cost. It determines the value of work completed, compares it to planned value and actual costs, and uses variances to forecast expected total costs and completion dates. EVM provides objective

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Himanshu Bohra
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13 views

Session 15 EVM

Earned Value Management (EVM) is a project performance assessment technique that combines schedule, budget, and work completion data to evaluate schedule and cost variances and estimate the total project cost. It determines the value of work completed, compares it to planned value and actual costs, and uses variances to forecast expected total costs and completion dates. EVM provides objective

Uploaded by

Himanshu Bohra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Session - 15

Earned Value Management


Performance Analysis with Earned
Value
Percent Complete Concept

 Subjective assessment of performance vs.


schedule
 Assessed regularly for every work package
 Requires competency, candor, and trust
behind

ahead
behind
Earned Value
 Performance Assessment
 Purpose: determine current status of project

with respect to schedule and budget

 Earned value method


 Combine % complete, schedule, and cost

information to assess current status of project


Earned Value Concept (EV)
Status
Date
A 100%

B
50% C

75%

Total Expenditure
How well is this project doing?
Budget to date

A 1000 1000
B 2000 2050
C 1000 250

4000 3300
Earned Value Example
 Example, project with three tasks, A, B, and C
 Task A is on schedule, on budget
 Task B is behind schedule, over budget
 Task C is ahead of schedule, under budget

 How well is the project doing?


Earned Value Concept (EV)
Status
Date
A 100%

B
50% C

75%

(a)
Total (c) Percent (a) x (c)= (d) Percent (a) x (d)=
Budget (b) AC Scheduled PV Completed EV

A 1000 1000 100 1000 100 1000


B 2000 2050 100 2000 50 1000
C 1000 250 50 500 75 750

4000 3300 3500 2750


Earned Value Example
 Definitions
 PV = planned value (also called BCWS: budgeted
cost of work scheduled)
 AC = actual cost (or ACWP: actual cost of work
performed)
 EV= earned value (or BCWP: budgeted cost of
work performed)
Earned Value Concept (EV)
Status
Date
A 100%

B
50% C

75%

(a) x (d)=
Budget
Total AC (c) Percent PV EV (EV)
(a) x (c)= (d) Percent
Budget
4000 (b) ACWP
3300 Scheduled3500BCWS Complete
2750BCWP
A 1000 1000 100 1000 100 1000
• Since EV < PV, project is behind schedule in terms of value of work
B (ignores
2000 critical2050
path) 100 2000 50 1000
• C 1000
Since AC > EV project250is over 50
budget in500 75 of work
terms of value 750completed

4000 3300 3500 2750


Performance Analysis
 AV = (BCWS – ACWP) or (PV-AC)

 SV = (BCWP – BCWS) or (EV-PV)

 TV = Status Date – (Actual Days of Work


Performed)
 CV = (BCWP – ACWP) or (EV-AC)
 SPI = BCWP/BCWS
 CPI = BCWP/ACWP
 ETC = (BAC –BCWP)/CPI
 EAC = ACWP+ETC
Earned Value Example

 Second example
 Assess not only current state of the project but
also the project’s likely completion cost.
Earned Value Example
Definitions
 CPI= cost performance index= EV/AC
 ETC= estimated cost to complete project
= (BAC - EV)/CPI
BAC = budgeted cost at completion
 EAC= estimated cost of project at completion
= AC + ETC
Earned Value Example
Second Example % PV % EV
Budget Scheduled Complete AC

A A 220 100 220 100 220 240

B B 190 100 190 100 190 180

C C 250 100 250 50 125 150

D D 90 100 90 100 90 110

E E 350 100 350 50 175 190

F F 400 50 200 100 400 380

G G 250 0 0 0 0 0

H H 140 0 0 0 0 0

I I 240 0 0 0 0 0

1 2 3 4 5 6 7
weeks 2,130 1,300 1,200 1,250
Earned Value Example
Status summary analysis, end of week 4:
1. Project Cost to date $1,250
2. Value of work completed, EV = $1,200
3. Value of work remaining,
$2,130 – $ 1,200 = $930
3. CPI = 1,200/1,250 = 0.96
4. Likely cost to complete project
930/0.96 = $969
Earned Value Example

Second Example (cont’d)


 Likely project cost at completion
 $1,250 + $969 = $2,219

 Project cost variance


 $2,130 – $2,219 = -$89 (4.2% overrun)

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