Earned Value Management (EVM)

Earned Value Management & Analysis

• is a project control technique preferred by PMI

• is used to detect performance variances

• is used to establish a clear relationship between planned and actual accomplishments

• is a way to forecast project’s cost and completion date using historical and statistical projections.

• is a project analysis tools can answer these questions using time and cost tracking

Being as a project managers there are important elements related to "Earned Value" that you need to know related to the followings:

• Is the project on schedule? Time tracking

• Is the project on budget? Cost tracking

• How much of the budget that should have been spent at this point in time

• How much value has the work on the project "earned" so far?

• Is the project fulfill the quality? Quality tracking

Select the correct definition and concepts for Earned Value Management

• Budgeted Cost of Work Scheduled (BCWS) answers "how much work has been actually completed?"

• Budgeted Cost of Work Performed (BCWP) answers "how much work has been actually completed?"

• Actual Cost of Work Performed (ACW) how much did we actually spend to deliver the Earned Value? which is the Actual Cost (AC)

• •Budgeted Cost of Work Performed (BCWP) is the “Earned Value” (EV)

• Budgeted Cost of Work Scheduled (BCWS) is “Planned Value" (PV)

Select the "Earned Value" components below:

• Planned Value (PV)

  How much work (person-hours) you planned to have accomplished at a given point in time (this is from the WBS in your plan)

• Earned Value (EV)

  The value (person-hours) in terms of your base budget of what you have at a given point in time (or, % complete X Planned Value)

• Actual Cost (AC)

  How much work (person-hours) you have actually planned at a given point in time

In short, EVM takes the planned value (PV), or what you planned to do at an estimated cost, and compares it against the estimated cost of the work performed (EV) and against the actual cost of work performed (AC), or what actually got done.

• False

• True

Select the correct information below: (you may choose more than one answer)

• Schedule variance (SV) shows whether the project tasks are taking longer than they should

• Cost variance (CV) shows whether they are actually requiring more work effort to complete

• Estimate-at-completion metric (EAC) helps to forecast final project performance and determine if any corrective action needs to take place

This figure shown and example of "Earned Value". Select the correct combination of the three important elements (A, B and C) for earned value analysisi

• A: .Planned Value: what your plan called for sending on the tasks planned to be completed by this date.

  B: Actual Cost: what you have actually spent to this point in time

  C: Earned Value: value (cost) of what you have accomplished to date, per the base plan.

• A: Actual Cost: what you have actually spent to this point in time.

  B: Planned Value: what your plan called for sending on the tasks planned to be completed by this date.

  C: Earned Value: value (cost) of what you have accomplished to date, per the base plan.

• A: .Earned Value: value (cost) of what you have accomplished to date, per the base plan.

  B: Planned Value: what your plan called for sending on the tasks planned to be completed by this date.

  C: Actual Cost: what you have actually spent to this point in time

• A: Earned Value: value (cost) of what you have accomplished to date, per the base plan.

  B: Actual Cost: what you have actually spent to this point in time

  C: .Planned Value: what your plan called for sending on the tasks planned to be completed by this date.

What do A and B indicate?

• A - Over Budget

  B - On Schedule

• A - Under Budget

  B - Behind Schedule

• A - Over Budget

  B - Behind Schedule

• A - Behind Budget

  B - Behind Schedule

What does "variance" means?

• Any different schedule or cost deviation from a specific plan

• Used within an organization to verify the budget and schedule for a project

• Frequently used as a key component of plan reviews

• To indicate performance measurement

Choose the following variances to be compared

• Schedule variance: deviations from work planned – not a measure of changes in cost.

  SV = EV - PV

• Product variance: Any different between the budgeted cost of an product and the actual cost of the product.

  PV = EV – PC

• Cost variance: Any different between the budgeted cost of an activity and the actual cost of the activity.

  CV = EV – AC