Introduction to Earned Value Analysis.

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1 Introduction to Earned Value Analysis

2 What is Earned Value Concept
It is a technique for monitoring and tracking project progress. C/SCSC = Cost and Schedule Control System Criteria. It provides Cost and Schedule Integration. It was developed by Department of Defense. (DOD)

3 Traditional Barchart Traditional Barchart and S-Curve provides comparison between actual progress and budget progress. It does not provide accuracy comparison in term of time, cost separately. It does not show reasons of project problems. B time actual budget

4 What is Earned Value Concept
Total project Budget is 1,000,000 Baht. Total Project Duration is 10 Month. We have passed 6 Months. We have already spent 500,000 Baht, What is our time status ? What is our cost status ? What should we do ? If we got 55% work done.

5 Something is added Earned Value is added into the chart. B
It means ‘earned quantity of work in term of money’ we get at the time. Comparison between ‘earned ’ and ‘budget’ presents variance of time . Comparison between ‘earned and ‘actual’ presents variance of cost. B time actual budget accomplishment or Earned Value (EV)

6 Earned Value Concept Main Variables
BCWS - Budget Cost of Work Schedule = งานตามเป้าหมาย เราควรจะทำงานได้เท่าไรแล้ว ? มาจากการวางแผน ACWP - Actual Cost of Work Performed = เงินที่จ่ายไปจริงคือเท่าไร ? มาจากการบันทึกทรัพยากรที่ใช้ไปจริง และเงินที่จ่ายสำหรับงาน BCWP - Budget Cost of Work Performed = งานที่ทำได้จริง เราได้งานเท่าไร ? มาจากการวัดปริมาณงานที่ทำได้จริง

7 BCWP Measurement Two types of Calculation
BCWP = % of Work Completed x Planned Cost per Percentage BCWP = Quantity of Work done x Unit Cost of Work Planned. งานที่ทำได้ = ร้อยละของงานที่เกิดขึ้น x ราคาต่อร้อยละของงาน งานที่ทำได้ = หน่วยของงานที่ทำได้ x ราคาต่อหน่วยตามแผน

8 Schedule Variance (SV)
SV = BCWP - BCWS SPI (Schedule performance index) = BCWP/BCWS SVP (SV Percent) = SV x 100 / BCWS You planned to finish task A in 10 days which total quantity is 10 unit. Schedule cost of the task is 1,000. After 10 days, you have got only 90% complete (9 units completed) BCWS = 1000 BCWP = 90 (%) x 10 (Baht/%) or = 9 (Units) x 100 (Baht per unit) = 900 SV = BCWP - BCWS = = -100 SPI = 900/100 = 0.9 SVP = -100/1000 = -10%  Behind Schedule.

9 Schedule Variance (SV)
earned (BCWP) schedule (BCWS) SV months behind SV = -100 SPI = 0.9 SVP = -10%  Behind Schedule. How much? = 10% of the Period

10 Cost Variance (CV) CV = BCWP - ACWP
CPI (Cost Performance Index) = BCWP/ACWP CVP (CV Percent) = CV x 100 / BCWP You planned to finish task A in 10 days which total quantity is 10 unit. Schedule cost of the task is 1,000. After 10 days, you have got only 90% complete (9 units completed). You have already spent 950. BCWS = 1000 BCWP = 900 ACWP = 950 CV = BCWP – ACWP = = -50 CPI = 900/950 = 0.947 CVP = -50/900 = -5.56%  Cost Overrun

11 (CV and SV) CV, SV > 0 Good (Ahead or under run) = 0 OK - On Schedule., on budget < 0 Bad - Behind, overrun CVP, SVP > 0 Good (Ahead or under run) = 0 OK - On Schedule., on budget < 0 Bad - Behind, overrun CPI, SPI > 1 Good (Ahead or under run) = 1 OK - On Schedule., on budget < 1 Bad - Behind, overrun

12 CV and SV B time actual schedule earned CV SV

13 Example Total budget (BAC) = 5000 part way through project
Work scheduled (BCWS) = 2000 Work accomplished (BCWP) = 1800 Actual cost (ACWP) = 2400 SV, SVP, SPI = ? CV, CVP, CPI = ? Report status of this project. Recommend some actions.

14 Trend Analysis positive variance schedule variance negative
zero positive variance negative cost variance schedule variance

15 Trend Analysis +10% -10% -20% +0% CV% SV% 1.1 0.9 0.8 1.0 CPI SPI

16 Cost Prediction BAC = Budget at Completion งบประมาณทั้งหมดของโครงการที่วางแผนไว้ ETC = Estimate to Complete ประมาณงบประมาณที่ต้องใช้ ETC = ประมาณงบประมาณที่ต้องการต่อจากนี้ / CPI = (BAC - BCWP)/CPI Previous example ETC = ( )/CPI = 3200/CPI = ??

17 Cost Prediction EAC = Estimate at Completion งบประมาณที่คาดว่าจะต้องใช้ทั้งหมดเมื่อจบโครงการ EAC = ACWP + ETC = งบประมาณที่ใช้ไปแล้ว + ที่คาดว่าจะใช้ต่อไป Previous example EAC = ??

18 Time Prediction ETTC = Estimate Time to Complete = ประมาณว่าจะใช้เวลาอีกประมาณเท่าไร = ปริมาณงานที่เหลืออยู่ / ((อัตราการทำงานตามแผน)* SPI) = (BAC- BCWP)/ ((Planned Working Rate)x SPI) Previous Example, if planned time = 5 months Working rate = 5000/5 = 1000 / Month Then, estimated working rate = 1000*SPI ETTC = ( )/(1000x SPI) = 3200/SPI = ?? ETU (Estimate Time Use) = Time Use + ETTC Do some exercises.