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Earned Value

17 replies [Last post]
Wed, 2009-10-28 10:22
Philip Richards
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I am aiming to use the data from my MS project Plan to produce Earned Value information.

I understand that the Earned Value is derived by taking the % complete of each task, and applying it to the baseline cost of that task, and that at completion, EV = Total Baseline Value (you have earned 100% of your Budget)

I am worried however that during the project execution, tasks may be added &/or deleted from the current plan, causing discrepancies with the baseline, and therefore corrupting the EV figures.

Are there any basic rules I should follow to prevent this and any other possible pitfalls.
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Wed, 2009-12-02 05:11
#1
Barry Fullarton
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I agree

If we submitted a schedule to a Client we have a number of Activities, these detail how the scope of work is to be detailed and achieved in a logical format.

We effectively sell this to the client with the motivation that we will have this completed on a certain date.

We then measure our performance against these activities and Durations, remembering we estimated these durations when we prepared the schedule and estimated when we would complete it by

But remember that certain activities have float, so if we don’t perform against the duration we planned we will show a slippage, but this is not to mean our overall duration is “slipping”, juts that WBS or activity

Hence Duration Percentage complete, the logic will drive the end date and hence the Durations and the reporting of Duration % of Original and Duration Percentage Complete as comparisons????

IS THIS NOT A CORRECT INTERPRETATION?

In P3 I remember we used to add a Resources “A Time”

RES AD ATIME
BQ EQ OD

AND THIS USED TO GIVE A FACTOR OF 1 TO EACH DAY and then we could update and measure s Curve and forecast against this
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Wed, 2009-12-02 04:24
#2
Philip Richards
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Barry

In this case I would use Work percent complete.

If 1 day per week has been spent over the last month, and 5 days per week are required to complete over the coming month, the task cannot be considered to be 50% complete?
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Wed, 2009-12-02 03:42
#3
Barry Fullarton
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Good Day Darren

Physical Percfentage Complete , how do you define teh percentage , How do you work out physically how far an activity is or progressed is it not better to say when teh activity is expected to be complted? and measure duration planned against actual duration?
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Fri, 2009-11-06 04:43
#4
Darren Kosa
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Phillip,

It’s an issue that I alluded to earlier in this thread. Why on earth anyone would use Duration (% Complete), as the basis of all EV performance measurement on a project is beyond my comprehension.

Physical % Complete is the nearest thing you’ll get to Work % Complete, but you’ll have to manually enter the value each time you update the project schedule.

Regards,

Darren
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Thu, 2009-11-05 12:19
#5
Philip Richards
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Thanks for all your comments. But I have another problem:

in MS Project, Tools, Options, Calculation, Earned Value:

Why can you not select ’Work % Complete’ as an option for calculating EV. Surely this is the more relevant of the three % types.
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Tue, 2009-11-03 11:31
#6
Ernesto Montales
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Earned value is a good measure of the critical and specially the non critical activities on the programme based on cost or effort.. but the I think the major weakness of this tool is in the forecast. It is purely based on the current outputs. To balance this, we use CPM in conjuction with EVA.
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Tue, 2009-11-03 09:08
#7
Scarllet Pimpernel
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Earned value EV used is only usedful if you have the same structure as that in US of America.

It is not useful if the project is to lure investors like what happen in some Middle East countries because it will expose all the anomalies in the projects from the early stage, so the client, the developer and others will not be able to squeeze more money from investors.

Thank you,
Scarlett
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Tue, 2009-11-03 08:17
#8
Darren Kosa
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Trevor,

I’m quite happy to agree with you for the most part, I find MS Project, as a scheduling tool, is adequate enough to fulfil most requirements, however, an EV performance reporting suite it ain’t. If anyone wants to use it for that purpose whilst trying to maintain a lean schedule then good luck to them.

I don’t think it’s a question of us not being able to do it, it’s more that if you’re having to export data into Excel all the time just to report EV, then cut out the middle man and keep the baseline in Excel. No fuss, it keeps it simple and we found it reduced the maintenance overhead.

Regards,

Darren
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Fri, 2009-10-30 20:32
#9
Trevor Rabey
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Darren,
You know that I disagree with you.
The most obvious possibility, which is probably the one that you are probably least likely to consider, is that you have mis-understood something or have made cricial assumptions or have adopted conclusions which are wrong.
Just because you and you crew can’t do it doesn’t mean that it can’t be done or that MSP does not work.
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Fri, 2009-10-30 14:33
#10
Darren Kosa
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Hi Phillip,

There may be others out there who disagree with me, but if you use MS Project for EV you’re on a hiding to nothing.

We tried to use 2k3 Professional (standalone not server) to provide for our EV reporting needs and it proved so inflexible that we ditched it after a couple of months. There were so many ways in which we found MS Project to be deficient, it would probably take me a week to go list them all. Suffice to say the biggest showstoppers were, in no particular order:

The only techniques you could use to claim EV is percentage complete, which is fine for LOE tasks, but not if you want to include discrete or apportioned effort in your schedule. The percentage complete method is subjective and MS Project didn’t measure EV as work accomplished, instead it only calculated BCWP using duration at the core of its calculation.

BCWP actually decreases when we increased the duration of a task in progress, in effect we were unclaiming EV which defied logic in my book.

As you mentioned in Post #1, rebaselining MS Project and then using it to report EV is like oil and water they don’t mix very well. We tended to end up checking and rechecking the baseline each time we wanted to report any performance data to make sure it had ’rolled-up’ correctly.

We couldn’t reconcile the EAC and VAC when sub-contractor milestones were part-paid, even though all the milestones at task level added up to the BAC they didn’t always have the same total at summary levels.

Actuals are a pain to input into the schedule if you use timesheets. Mapping between the timesheets and verbal progress is time consuming if you can’t auto-populate.

The EV report from MS Project is an absolute joke. We couldn’t run any cost performance reports on the WBS, OBS, Baseline, Resources and there weren’t any Variance reports either. We ended up exporting or cutting and pasting data into Excel which kind of defeats the purpose of holding a baseline in MS Project in the first place.

The schedule also started to take on the shape of a RAM and ceased to be a schedule that only showed deliverables or products in a project lifecycle. To report at different levels of granularity we had to structure the MS Project schedule so that we could report at WP, CA and project levels and that didn’t equate to an easily read project schedule that we could to use to communicate progress with.

Like I said I could go on, in the end we transferred the baseline into Excel, used the MS Project schedule for delivery and the spreadsheet to report on EV. We did look at using Deltek Cobra, but the cost was a little too prohibitive, it didn’t mesh that well with our timesheeting system and the business unit manager at the time didn’t want to fork out for it.

Drop me a line if you want to know else.

Regards,

Darren
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Fri, 2009-10-30 09:47
#11
David Kelly
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Hope this reads better - a "preview" button would be good


Trevor : I have to say that I am not all that fond of EV.
I don’t think it is all it is cracked up to be.
I don’t think that it is a very good measure of progress, but many people think it is.>>

David : All projects have a time, resource and cost budget. EVA does resource and cost, CPM/barcharts does time. So EVA is TWICE as useful as the baseline barchart for measuring progress


Trevor : I don’t think that the point of EV is all that well understood or appreciated.

David : Correct.


Trevor : What exactly is the "whole point of Earned Value".

David :To measure projects more accurately than CPM

Trevor : You can earn value by doing the wrong tasks.

David : Yes of course BUT you always know EXACTLY what “wrong” work you have done

Trevor : That is, EV makes no distinction between critical and non-critical.

David : Not really – schedule variance gives you a clue , but critical/non critical is really a CPM thing.

Trevor : It also supposes that reducing the mixed results of the progress of numerous tasks to 1 or 2 indicator numbers such as SPI and CPI actually means something. Do they, really?

David : Yes., they do, but from your comments above it is surely Scheduled Variance you want most

Trevor : Also, EV does not tell you what went wrong or what to do about it?

David : Your kidding me, you don’t REALLY think that, do you?


Trevor : There is a lot to be said for your approach of not deleting the unwanted tasks, but at least if you delete the task you also delete its Baseline numbers as well.

David : And the cost engineer, contract analyst thinks what about deleting base scope?
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Fri, 2009-10-30 09:42
#12
David Kelly
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HMM,my choice of punctuation has done Weird things to the Planning Planet editor. I shall try again!
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Fri, 2009-10-30 09:40
#13
David Kelly
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**** EMERGENCY BULLETIN FROM THE EVA THOUGHT POLICE ****


Trevor,

< I don’t think it is all it is cracked up to be.
I don’t think that it is a very good measure of progress, but many people think it is.>>

All projects have a time, resource and cost budget. EVA does resource and cost, CPM/barcharts does time. So EVA is TWICE as useful as the baseline barchart for measuring progress


<>

Correct.


<>

To measure projects more accurately than CPM

<>

Yes of course BUT you always know EXACTLY what “wrong” work you have done

<>

Not really – schedule variance gives you a clue , but critical/non critical is really a CPM thing.

<>


Yes., they do, but from your comments above it is surely Scheduled variance you want most

<>

Your kidding me, you don’t REALLY think that, do you?


<>

And the cost engineer, contract analyst thinks what about deleting base scope?



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Fri, 2009-10-30 05:25
#14
Philip Richards
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Earned Value doesn’t claim to be the be all and end all. Detailed analysis of the project plan (such as CPA, Resource loading etc) are fundamental in monitoring and controling the project execution.

What EV does give you is a high level overview, (usually for higher management who are not interestd in the nitty gritty) accross disciplins & functions, of project performance to date.

A 1 page EVA graph together with a 1 page CPA and maybe a 1 page Key Milestone status report will give higher management a good picture of the project performance
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Thu, 2009-10-29 07:55
#15
Trevor Rabey
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I have to say that I am not all that fond of EV.
I don’t think it is all it is cracked up to be.
I don’t think that it is a very good measure of progress, but many people think it is.
I don’t think that the point of EV is all that well understood or appreciated.
What exactly is the "whole point of Earned Value".
You can earn value by doing the wrong tasks.
That is, EV makes no distinction between critical and non-critical.
It also supposes that reducing the mixed results of the progress of numerous tasks to 1 or 2 indicator numbers such as SPI and CPI actually means something. Do they, really?
Also, EV does not tell you what went wrong or what to do about it.

There is a lot to be said for your approach of not deleting the unwanted tasks, but at least if you delete the task you also delete its Baseline numbers as well.
But you can also leave the task in, and delete its duration, resource assignments, work, cost and its Baseline numbers (duration, work, cost) as well. The task disappears except for a remnant, an artifact.
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Thu, 2009-10-29 05:29
#16
Philip Richards
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Thanks Trevor

But surely that is the whole point of Earned Value. To monitor progress against your original budget in terms of Time & Cost.

I understand that when a task is added, it will increase the cost (ACWP), but will earn no value (which is what we want to see)

But I’m not sure how to deal with tasks which are no longer needed. I think maybe to set its budget to zero, and mark it as complete. That way, its Actual cost is zero. It will have earned 100% of its budget (which doesn’t seem right, as no work has been done) & BCWS will have been maintained.

So I suggest:
Rule 1 Never delete a redundant task, but set its budget to zero and mark it as complete.

Any comments or further suggestions ?
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Wed, 2009-10-28 22:28
#17
Trevor Rabey
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Since BCWS and BCWP both come straight from the Baseline, anything not in the Baseline will not be included in the EV.
This is not corruption, just arithmetic.
The EV becomes progressively less meaingful, and more irrelevant, as the Baseline becomes more superseded, and that can happen pretty fast if there are a lot of changes.
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