Earned Value Management - EVM - Revision history

S205701: /* Earned Value Analysis : basic formulas and definitions */

2021-03-08T18:00:36Z

Earned Value Analysis : basic formulas and definitions

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	[[File:Image11.png\|thumb\|450px\|Figure 3 : Plotting of Planned value, Actual Cost and Earned value. Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]		[[File:Image11.png\|thumb\|450px\|Figure 3 : Plotting of Planned value, Actual Cost and Earned value. Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]



	* '''Schedule Variance''' : SV = EV – PV.		* '''Schedule Variance''' : SV = EV – PV.

S205701: /* Earned Value Analysis : basic formulas and definitions */

2021-03-08T18:00:13Z

Earned Value Analysis : basic formulas and definitions

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	* '''Earned Value''' '''(EV)''' is the amount of authorized work that was actually accomplished at a given point in time measured through the amount of management’s initial budget for the accomplished work. This is also regarded as the budgeted cost of work performed (BCWP). EV can be defined by multiplying the budget for a work package or activity by the percentage of advancement: EV = percent complete x budget. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>		* '''Earned Value''' '''(EV)''' is the amount of authorized work that was actually accomplished at a given point in time measured through the amount of management’s initial budget for the accomplished work. This is also regarded as the budgeted cost of work performed (BCWP). EV can be defined by multiplying the budget for a work package or activity by the percentage of advancement: EV = percent complete x budget. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>



	Once the key parameters are established, and a measuring tool for each of these is defined (as will be explained later), some more calculations can be carried out. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>		Once the key parameters are established, and a measuring tool for each of these is defined (as will be explained later), some more calculations can be carried out. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>


	[[File:Image11.png\|thumb\|450px\|Figure 3 : Plotting of Planned value, Actual Cost and Earned value. Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]		[[File:Image11.png\|thumb\|450px\|Figure 3 : Plotting of Planned value, Actual Cost and Earned value. Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]


	* '''Schedule Variance''' : SV = EV – PV.		* '''Schedule Variance''' : SV = EV – PV.

S205701: /* Earned Value Analysis : basic formulas and definitions */

2021-03-08T18:00:01Z

Earned Value Analysis : basic formulas and definitions

← Older revision		Revision as of 18:00, 8 March 2021
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	* '''Earned Value''' '''(EV)''' is the amount of authorized work that was actually accomplished at a given point in time measured through the amount of management’s initial budget for the accomplished work. This is also regarded as the budgeted cost of work performed (BCWP). EV can be defined by multiplying the budget for a work package or activity by the percentage of advancement: EV = percent complete x budget. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>		* '''Earned Value''' '''(EV)''' is the amount of authorized work that was actually accomplished at a given point in time measured through the amount of management’s initial budget for the accomplished work. This is also regarded as the budgeted cost of work performed (BCWP). EV can be defined by multiplying the budget for a work package or activity by the percentage of advancement: EV = percent complete x budget. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>



	Once the key parameters are established, and a measuring tool for each of these is defined (as will be explained later), some more calculations can be carried out. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>		Once the key parameters are established, and a measuring tool for each of these is defined (as will be explained later), some more calculations can be carried out. <ref name="Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. ">Fleming QW, Koppelman JM. Earned Value Project Management. 4th edition. Project management institute; 2010. </ref>


	[[File:Image11.png\|thumb\|450px\|Figure 3 : Plotting of Planned value, Actual Cost and Earned value. Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]		[[File:Image11.png\|thumb\|450px\|Figure 3 : Plotting of Planned value, Actual Cost and Earned value. Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]


	* '''Schedule Variance''' : SV = EV – PV.		* '''Schedule Variance''' : SV = EV – PV.

S205701: /* Earned Value Analysis : basic formulas and definitions */

2021-03-08T17:59:44Z

Earned Value Analysis : basic formulas and definitions

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	[[File:Image7.png\|thumb\|450px\|Figure 2 : Plotting of Planned value, Actual Cost, and Earned Value. Own Figure based on<ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]		[[File:Image7.png\|thumb\|450px\|Figure 2 : Plotting of Planned value, Actual Cost, and Earned Value. Own Figure based on<ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref>]]


	To carry out Earned Value Analysis, three key values need to be available: the planned value (PV), actual cost (AC), and earned value (EV).		To carry out Earned Value Analysis, three key values need to be available: the planned value (PV), actual cost (AC), and earned value (EV).

S205701: /* Terminology */

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Terminology

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	As pointed out by the literature <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref><ref name="Fleming QW, Koppelman JM. Using earned value management. Cost Eng (Morgantown, West Virginia). 2002;44(9):32-36."></ref> it is important to clarify the terminology associated with Earned Value, as it is a source of confusion for many:		As pointed out by the literature <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref><ref name="Fleming QW, Koppelman JM. Using earned value management. Cost Eng (Morgantown, West Virginia). 2002;44(9):32-36."></ref> it is important to clarify the terminology associated with Earned Value, as it is a source of confusion for many:


	* '''Earned Value Analysis (EVA)''' is a '''quantitative method''' of assessing the progress of a project at any given point in time, predicting its completion date and final cost, and evaluating cost and schedule variances as the project progresses. Its objective is to assess whether the cost, schedule, and work done are progressing in accordance with the plan, comparing the expected amount of work done with what has actually been achieved. <ref name="‘Earned Value Analysis’ (2014) Handbook for Construction Planning and Scheduling, (202), pp. 158–170. doi: 10.1002/9781118838167.ch6.">‘Earned Value Analysis’ (2014) Handbook for Construction Planning and Scheduling, (202), pp. 158–170. doi: 10.1002/9781118838167.ch6.</ref>		* '''Earned Value Analysis (EVA)''' is a '''quantitative method''' of assessing the progress of a project at any given point in time, predicting its completion date and final cost, and evaluating cost and schedule variances as the project progresses. Its objective is to assess whether the cost, schedule, and work done are progressing in accordance with the plan, comparing the expected amount of work done with what has actually been achieved. <ref name="‘Earned Value Analysis’ (2014) Handbook for Construction Planning and Scheduling, (202), pp. 158–170. doi: 10.1002/9781118838167.ch6.">‘Earned Value Analysis’ (2014) Handbook for Construction Planning and Scheduling, (202), pp. 158–170. doi: 10.1002/9781118838167.ch6.</ref>
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	* '''Earned Value Management System''' '''(EVMS)''' is the method, processes, resources, and models that a company uses to implement Earned Value Management.		* '''Earned Value Management System''' '''(EVMS)''' is the method, processes, resources, and models that a company uses to implement Earned Value Management.


	Earned Value Analysis formulas can be used on any project, but if an Earned Value Management methodology is not in place, it would be highly unlikely to produce accurate results. Moreover, in order to implement Earned Value Management, there must be an Earned Value Management System in place. The three concepts are therefore very closely linked to each other.		Earned Value Analysis formulas can be used on any project, but if an Earned Value Management methodology is not in place, it would be highly unlikely to produce accurate results. Moreover, in order to implement Earned Value Management, there must be an Earned Value Management System in place. The three concepts are therefore very closely linked to each other.

S205701: /* Earned Value Management Overview */

2021-03-08T17:59:18Z

Earned Value Management Overview

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	[[File:Image6.png\|thumb\|450px\|Figure 1 : Plotting of planned and actual expenditure curves Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. ">Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9</ref>]]		[[File:Image6.png\|thumb\|450px\|Figure 1 : Plotting of planned and actual expenditure curves Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. ">Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9</ref>]]



	“How is your project going?” is a very frequently asked question to project managers and one it’s not easy to answer. As pointed out by Lukas, Joseph A. <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref> one of the techniques that are frequently used in project management is comparing the planned expenditure curve with the actual one. <ref name="Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.">Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.</ref> However, this approach can cause major errors and provide misleading information. As projects are complex processes that involve a large number of aspects and dimensions, controlling just one of these dimensions is too simplistic.		“How is your project going?” is a very frequently asked question to project managers and one it’s not easy to answer. As pointed out by Lukas, Joseph A. <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref> one of the techniques that are frequently used in project management is comparing the planned expenditure curve with the actual one. <ref name="Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.">Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.</ref> However, this approach can cause major errors and provide misleading information. As projects are complex processes that involve a large number of aspects and dimensions, controlling just one of these dimensions is too simplistic.

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Abstract

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	==Abstract==		==Abstract==

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Abstract

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	==Abstract==		==Abstract==



	Earned Value Management is a very powerful and popular project monitoring tool. Monitoring and controlling are key practices in project management, serving the purpose of informing project managers on the advancement of the project. Thus, data on the planning process and its advancement allows, through earned value management analysis to be investigated and results to be anticipated.		Earned Value Management is a very powerful and popular project monitoring tool. Monitoring and controlling are key practices in project management, serving the purpose of informing project managers on the advancement of the project. Thus, data on the planning process and its advancement allows, through earned value management analysis to be investigated and results to be anticipated.

S205701: /* Earned Value Management Overview */

2021-03-08T17:58:51Z

Earned Value Management Overview

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	==Earned Value Management Overview==		==Earned Value Management Overview==


	[[File:Image6.png\|thumb\|450px\|Figure 1 : Plotting of planned and actual expenditure curves Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. ">Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9</ref>]]		[[File:Image6.png\|thumb\|450px\|Figure 1 : Plotting of planned and actual expenditure curves Own Figure based on <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. ">Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9</ref>]]



	“How is your project going?” is a very frequently asked question to project managers and one it’s not easy to answer. As pointed out by Lukas, Joseph A. <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref> one of the techniques that are frequently used in project management is comparing the planned expenditure curve with the actual one. <ref name="Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.">Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.</ref> However, this approach can cause major errors and provide misleading information. As projects are complex processes that involve a large number of aspects and dimensions, controlling just one of these dimensions is too simplistic.		“How is your project going?” is a very frequently asked question to project managers and one it’s not easy to answer. As pointed out by Lukas, Joseph A. <ref name="Lukas JA. How to make earned value work on your project. PMI® Glob Congr 2012—North Am Vancouver, Br Columbia, Canada. 2012;(5):1-9. "></ref> one of the techniques that are frequently used in project management is comparing the planned expenditure curve with the actual one. <ref name="Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.">Booz, Allen and Hamilton (2008) ‘Earned Value Management Tutorial Module 1: Introduction to Earned Value Management.</ref> However, this approach can cause major errors and provide misleading information. As projects are complex processes that involve a large number of aspects and dimensions, controlling just one of these dimensions is too simplistic.

S205701: /* Earned Value Management Overview */

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Earned Value Management Overview

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	<math>TPI _{BAC} = \frac{Work Remaining }{Funds Remaining} = \frac{(BAC - EV)}{(BAC - AC)} </math>		<math>TPI _{BAC} = \frac{Work Remaining }{Funds Remaining} = \frac{(BAC - EV)}{(BAC - AC)} </math>


	<math>TPI _{EAC} = \frac{Work Remaining }{Funds Remaining} = \frac{(BAC - EV)}{(EAC - AC)}</math>		<math>TPI _{EAC} = \frac{Work Remaining }{Funds Remaining} = \frac{(BAC - EV)}{(EAC - AC)}</math>