Project Management Webinar - Project Insightdownloads.projectinsight.net/training/pmi-project... · Develop project charter 5 $100 10% Yes $100 Develop landscaping plan and schedule

Project Management Webinar

Initiate Project Intelligence®

Earned Value Basics – In Practice

© 2017 Core Performance Concepts Inc.

Things to Know…

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Questions are welcome

Use the question box to ask questions

PM training is valid for 1 PDU

Must be in attendance for full session

PDU certificate sent by the end of the day

Recording and slides sent by tomorrow


Denise Rodriguez

Project Insight

Marketing

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www.projectinsight.net

Moderator


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Project Insight


Presenter

Diane C. Buckley, MBA, PMP

CEO, Core Performance Concepts Inc.

Training in project management,

PMP® and CAPM® certification, leadership,

business analysis, agile and six sigma

[email protected]

www.coreperformanceconcepts.com

PMP® and CAPM® are registered trademarks of the Project Management Institute


Estimate, budget, and control project costs

Know the expected budget at completion for

the project as well as the activities

Measure actuals at the activity level

Manage earned value management indicators

Forecast changes as accurately as possible

Project Manager’s Responsibility


CV (Cost Variance)

EV (Earned Value) minus AC (Actual Costs)

SV (Schedule Variance)

EV (Earned Value) minus PV (Planned Value)

$600 - $800 =<$200>

$600 - $700 = <$100>

1 2 3 4 5 6 7 8 9 10

EARNED VALUE $600

PLANNED VALUE $700

ACTUAL COSTS $800

Budget at Completion $1,000

Earned Value Calculations


• The earned value is quite subjective on most projects I have had. If you ask 2 different persons, you may get 2 different assessments on the earned value of a task.

• Are there any guidelines for refining the qualitative assessment of level of completion to assure the accuracy of EV calculations?

Question from you…


Budget at Completion

Planned Value(PV)

Actual Costs(AC)

Earned Value(EV)

Schedule Variance(EV-PV)

Cost Variance(EV-AC)

Landscape Plan $1,000 $1,000 $1,200 $ 1,000 $0 <$200>

Order Materials $ 500 $ 500 $ 400 $ 400 <$100> $0

Clear Old Yard $2,000 $1,500 $1,800 $1,000 <$500> <$800>

Install New Sprinkler System

$4,000 $2,000 $2,200 $2,500 $500 $300

Replanting $1,000 $0 $0 $0 $0 $0

Total $8,500 $5,000 $5,600 $4,900 <$100> <$700>

Earned Value Analysis – New Landscape


Planned Value(PV)

Actual Costs(AC)

Earned Value(EV)



Landscape Plan

$1,000 $1,000 $1,200 $ 1,000 $0 <$200>


Task Estimated Hours Dollars Percentage/Weight

Complete Y/N Actual Costs

Develop project charter 5 $100 10% Yes $100

Develop landscaping plan and schedule

25 $500 50% Yes $700 (10 extra hours)

Review plan with stakeholders & adjust

15 $300 30% Yes $300

Sign-off on plan and schedule 5 $100 10% Yes $100


• EV includes material costs as well, correct?

• Can you talk about incorporating non labor-related costs into the calculation?




Planned Value(PV)

Actual Costs(AC)

Earned Value(EV)



Landscape Plan $1,000 $1,000 $1,200 $ 1,000 $0 <$200>

Order Materials $ 500 $ 500 $ 400 $ 400 <$100> $0

Clear Old Yard $2,000 $1,500 $1,800 $1,000 <$500> <$800>


$4,000 $2,000 $2,200 $2,500 $500 $300

Replanting $1,000 $0 $0 $0 $0 $0

Total $8,500 $5,000 $5,600 $4,900 <$100> <$700>




Planned Value(PV)

Actual Costs(AC)

Earned Value(EV)




$4,000 $2,000 $2,200 $2,500 $500 $300


Task Estimated Hours Dollars Percentage Complete Y/N Actual Costs

Materials Delivered N/A $1400 35% Yes $1400

Dig Sprinkler Trench 110 $1100 ($10/hour) 27.5% Yes $800 (Complete in 80 hours)

Lay Pipe 100 $1000 ($10/hour) 25% No

Connect to Water & Test 10 $500 ($50/hour) 12.5% No

Only planned to achieved 55% through today ($600)


• Do you constantly recalculate when there is a change to project whether it is cost and/or schedule?



• I would like to hear a discussion on various contract scenarios. For instance, if you were working under a fixed price contract, you may look at the cost variances differently than in the scenarios noted.• Firm Fixed Price = $100,000 = PV

• Cost Plus = $90,000 = PV ($10,000 upon delivery)



• What’s the best way to ensure that the estimated hours provided by the team to complete the tasks are reasonable?

Optimistic + 4x Most Likely + Pessimistic-----------------------------------------------------

62 + 4*10 + 18------------------ = 10

6

6 + 4*10 + 44------------------ = 15

6



• What’s the best way to ensure that the estimated hours provided by the team to complete the tasks are reasonable?



• What’s the best way to ensure that the estimated hours provided by the team to complete the tasks are reasonable?• If you start to identify that the estimates are lower than

they should have been, at what point do you revise the estimated hours and budget?

• Then do you revise the budget going forward or from the beginning?




Planned Value(PV)

Actual Costs(AC)

Earned Value(EV)



Landscape Plan $1,000 $1,000 $1,200 $ 1,000 $0 <$200>

Order Materials $ 500 $ 500 $ 400 $ 400 <$100> $0

Clear Old Yard $2,000 $1,500 $1,800 $1,000 <$500> <$800>


$4,000 $2,000 $2,200 $2,500 $500 $300

Replanting $1,000 $0 $0 $0 $0 $0

Total $8,500 $5,000 $5,600 $4,900 <$100> <$700>



0

1000

2000

3000

4000

5000

6000

7000

8000

9000

100 400 300 800 1000 1400 400 600 1500 800 700 500

Jan Feb March April May June July August September October November December

Project S Curve

PV EV AC


Cost Performance Index (CPI)

CPI (Cost Performance Index) = Earned Value/Actual Costs

$4900/5600 = 0.875

For every dollar spent, you only receive $ 0.875 worth of value!

Any questions?


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Project Management Webinar - Project Insightdownloads.projectinsight.net/training/pmi-project... · Develop project charter 5 $100 10% Yes $100 Develop landscaping plan and schedule