QM for DM

Project Performance
Tracking and Reporting
Earned Value Analysis EVA

PS Your handout has a number of places

where you will be wise to add more detail
 Reporting

BS6079:1 2010 observes:

Managing reporting

The purpose of reporting management is to ensure that all

project team members and stakeholders are aware of the
current status for the project and the outlook for the future, in
particular, regarding the achievement of the project objectives.

Reports can be on many aspects . . . we will concentrate on time

and cost . . . but there is also quality and risk and procurement
and health and safety and many more
 Tracking and Reporting

What do we need:

A joined up project time schedule plan

This ought to be reasonably resourced and resource

managed – i.e. not too expensive/sustainable approach

Ideally it should be costed but if it is not, a cumulative

cashflow, based on the time schedule, should be in place
 Tracking and Reporting

All of this should be BASELINED

Baselining is creating a snapshot or record of what has

been planned so that what is being achieved can be
compared with what was planned. This also gives a
mechanism so that what is intended to be done in the
future can also be compared with what was planned

Baselining in MS Project
 Tracking and Reporting

Consider Time:

Before baselining, we only have Schedule Time

After baselining and when we get going on the
project, we will be faced with Baseline Time,
Actual Time and Scheduled Time
Note Time can be illustrated by cost
– we will come onto that shortly….
 Consider Time
Time now

TASK A
 Tracking and Reporting

Consider Cost

Before baselining we will have Scheduled Cost

After baselining, we will have Baseline Cost,
Actual Cost and Scheduled Cost . . . which have
some other names
 Consider Cost
Time now
Cumulative
Cost
Actual Cost, AC

Time
 Time and Cost, what are these telling us?

Taken separately, Time and cost cannot illustrate what is

happening on a project in terms of being on track (plan) with:

• Expenditure – have we spent more or less than we planned?

• Schedule – have we done all the work we intended to do at
this stage?
 Tracking and Reporting

Consider Cost with respect to time

Before baselining we will have Scheduled Cost

After baselining, we will have Baseline Cost,
Actual Cost and Scheduled Cost . . . which have
some other names

We will come back to this later…

 Reporting

Considerations:
Client/Project
Who? management team
All of this should be
When? Frequency/Period? recorded and
detailed in a
What? Content/structure
Project Management
Where? Location/archive Plan
How? Meetings/reports

Why? Aims… cost control,

interjection triggers
 Run, Track and Control

Run
Make some progress on the project

Track
Map what has been achieved against what was planned. This
is passive. It is also referred to as monitoring.

Control
Take actions to bring future intentions back into line with
what was originally intended. This is active.
 Tracking

Baselining/Tracking in MS Project
 Measuring the work done on site

How do we know how much work has been done?

What if we are half way through doing it?

 Performance

Variance Analysis has been used for a very long time. It is

simply matching what was intended against has happened.

This can be time

This can be cost

This could be amount of concrete used compared with

what was intended to be used
 Earned Value Analysis
• Simply considering monitoring Time and Cost
Performance and Tracking the Time and Cost
Performance might not be sufficient.
• Earned Value Analysis is intended to monitor actual
output performance (The Earned Value) as well
• It will then make some predictions about the future
based on past performance.
 Earned Value Analysis
EVA

EVA is a technique used to measure project performance which uses:

Planned Cost (This is the Baselined Cost)

Budgeted Cost of Work Scheduled BCWS

Actual Cost
Actual Cost of Work Performed ACWP

Earned Value
Budgeted Cost of Work Performed BCWP
 Let us develop a simpler picture

EVA
Time now
Cumulative Planned cost, PC

Cost
Actual Cost, AC

Cost Variance, CV
Schedule Variance, SV
Earned Value, EV
What does
this actually
represent??? Time
 Illustration to help make this more
understandable
Time now
Planned Cost = 200k (50k + 150k)
Our Plan:
2 Weeks
A 50k 6 Weeks
B 300k 2 Weeks
C 50k

What may actually happen for example:

3 Weeks
Actual Cost = 250k (100k + 150k)
A 100k 2 Weeks
B 150k >>
We are behind schedule and have C 50k
overspent on the work we have completed
(doing badly by both measures) Earned Value = 150k (50k + 100k)
 EVA
Time now
Cumulative Planned cost, PC

Cost
Actual Cost, AC 250k

Cost Variance, CV 200k

Schedule Variance, SV
Earned Value, EV 150k

Time
 Variance

Variance
 
Cost Variance = Earned Value – Actual Cost
 
 
Schedule Variance* = Earned Value – Planned Cost
 
* based on cost.
 Efficiency

Efficiency
 
Cost Performance Index (CPI) = Earned Value
Actual Cost
 
 
Schedule Performance Index (SPI) = Earned Value
Planned Cost
 
Note if these are less than 1.0, then the project is lagging behind that
planned. If these are greater than 1.0 the project is outperforming the plan
  

Forecasting

 Forecasting
 
Final Cost = Budgeted Cost
CPI
 
 
Final Duration = Original Duration
SPI
 
 
Example
• It is 8 weeks into a 20 week runway resurfacing
contract which is working five 10 hour night shifts
each week. The contract is for 200 000 m2 and the
contractor tendered £40/m2 for the work. To date,
75 000 m2 have been completed and the cost to
date is £4 000 000. Comment on the performance.
 
• At ten weeks, 105 000 m2 have been completed at
a cost of £4 100 000. Comment on the
performance at 10 weeks compared with 8 weeks.
Total Value for work = £40/m2 x 200,000m2 = £8,000,000
Planned duration is 20 weeks
At week 8
@8 of 20 weeks we would expect to have completed the following
area of the runway:

Planned area = 200,000 x 8/20 = 80,000m2 = £3,200,000 (Planned cost)

Actual cost = £4,000,000

Work completed = 75,000m2

Value of work completed = 75,000m2 x £40/m2 = £3,000,000 (Earned Value)

Cost Variance = EV – AC = 3,000,000 – 4,000,000 = -£1,000,000

Schedule Variance = EV - PC = 3,000,000 - 3,200,000 -£200,000

CPI = EV/AC = 3,000,000/4,000,000 = 0.75 (Bad overspend!)

SPI = EV/PC = 3,000,000/3,200,000 = 0.9375 (Slightly behind schedule!)
 Final Cost = Budgeted Cost = £8,000,000/0.75 = £10,666,667
CPI
Final Duration = Original Duration = 20/0.9375 = 21.333 weeks (21 weeks 2 days)
SPI
£10,666,667
Cu Predicted
cost

Total PC (8 million)
£8million 21.333 weeks

AC
£4million

PC £3.2million
EV
£3million
Predicted
time
8 20
Time
At ten weeks, 105 000 m2 have been completed at a cost of
£4,100,000. Comment on the performance at 10 weeks compared
with 8 weeks.

@10 of 20 weeks we would expect to have completed the following

area of the runway:

Planned area = 200,000 x 10/20 = 100,000m2 = £4,000,000 (Planned cost)

Actual cost = £4,100,000

Work completed = 105,000m2

Value of work completed = 105,000m2 x £40/m2 = £4,200,000 (Earned Value)

Cost Variance = EV – AC = 4,200,000 – 4,100,000 = £1,00,000

Schedule Variance = EV - PC = 4,200,000 – 4,000,000 = £200,000

CPI = EV/AC = 4,200,000/4,100,000 = 1.024 (Spent well – under budget just)

SPI = EV/PC = 4,200,000/4,000,000 = 1.05 (Slightly ahead of schedule!)
 Final Cost = Budgeted Cost = £8,000,000/1.024 = £7,812,500
CPI
Final Duration = Original Duration = 20/1.05 = 19.05
SPI

Cu

Predicted
cost
Total PC (8 million)
£8million
£7,815,500
EV £4.2million 19.05 weeks

AC £4.1million
PC £4.0million

Predicted
time
8 10 20
Time
  

EVA does have some limitations

- Assumes money spent in a linear fashion –

   prorated based on time intended to be spent
  on a task. This is seldom the case.
- Cost in terms of money spent is accurate.
However the judgement of how far we are into
a task or a project in general is subjective and
therefore so are costs associated with Schedule
- Prediction for the future are based on
extrapolations of what has occurred so far.
Often what has happened does not represent
accurately what will happen in the future – E.g.
Ground conditions early in a project.
Tutorial – More Questions!