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Earned Value Management (EVM) Efficiency Notes – Project Controls Series 1 What It Is Why You Need It

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Earned Value Management (EVM) Efficiency Notes – Project Controls Series 1 What It Is Why You Need It Earned Value Management (EVM) Efficiency Notes – Project Controls Series 1 What It Is Why You Need It A project management technique that EVM is the industry standard method of measures project performance and progress tracking project progress on capital by combining scope, schedule and costs into a projects. It improves communication, reduces single integrated system of monitoring and project risk, provides better forecasting, better reporting. progress tracking and better project visibility. What You Need 1. A Project Plan 4. Method to track work execution on Activities (schedule, scope, costs) Actual % Complete Actual Costs Actual Hours Spent Actual Start / Finish 2. What you plan to spend and what you expect to have done for the $$$ spent 5. Formulas to calculate EV, CV and SV X Activities Done by Y Date will cost $MM See back of page 3. Metrics to quantify work % complete 6. Reports on $ Expenditure vs. Time X Activities of equal effort or weighted Planned, Actual, Earned, Variances Reading an S-Curve Report Data Date When is this project data as of? Planned Value > Earned Value We are behind schedule Actual Cost > Earned Value We are over budget VAC = BAC – EAC (Negative Value) How far over budget do we expect to be? Estimated Complete Date vs. Planned Complete Date When do we expect to finish? Get smart forms, reports and processes on your tablet. www.industrialaudit.com/efficiency-notes Earned Value Management (EVM) Efficiency Notes – Project Controls Series 1 Primary Data Points and Calculations Budget At Completion BAC BAC = Total Planned Cost What you plan to spend for 100% complete Planned Value PV PV = BAC x (% Completed Planned) What you plan to spend on what you plan to be completed Actual Cost AC AC = SUM(Cost) Actual cost of work performed Earned Value EV EV = BAC x (% Complete Actual) What you planned to spend on what’s actually done Variances and Calculations Cost Variance CV = EV – AC CV How far over or under budget am I? (-) = over (+) = under Cost Variance % CV% = (CV) / (EV) CV% How far over or under budget expressed as a % (-%) = over (+%) = under Schedule Variance SV = EV – PV SV How far ahead or behind schedule am I? (-) = behind (+) = ahead Schedule Variance % SV% = (SV) / (PV) SV% How far ahead or behind schedule expressed as a % (-%) = behind (+%) = ahead Variance At Completion VAC VAC = BAC – EAC Variance of total actual cost and expected cost Performance Indices CPI = (EV) / (AC) Cost Performance Index > 1 typically good (cost < plan) CPI Ratio of planned spend on what’s actually done to what’s < 1 bad (cost > plan) actually spent for the work delivered by reporting date = 1 good (cost = plan) SPI = (EV) / (PV) Schedule Performance Index > 1 typically good (ahead vs. plan) SPI Ratio of planned spend on what’s actually done to planned < 1 bad (behind vs. plan) spend on what you planned to have done by reporting date = 1 good (on plan) Forecasts Estimate At Completion EAC = AC + ((BAC – EV) / CPI)) (typical) EAC Expected TOTAL cost for 100% complete] Atypical - assumes similar variances seen will not occur in future EAC = AC + (BAC – EV) (atypical) Estimate to Complete ETC ETC = EAC - AC Expected cost to finish REMAINING work Get smart forms, reports and processes on your tablet. www.industrialaudit.com/efficiency-notes .
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