Your note to Rodel is correct. This happens when the project is progressing mainly on non-critical activities, but was already delayed on the critical ones.
Thats why we should track the project not only thru EV anaylsis, which is helpful to verify cost performance, but also CPM analysis to check status of previously known critical activities, and how current progress affects the schedule.
“It maybe efficient on the cost but delay on the schedule”.. this is exactly my point, to me it doesn’t seem reasonable to say that a project is still on budget while a schedule is delay (especially huge delay), but perhaps this may be possible on the early stage of a delay…
R. Catalan
I can understand where you are coming from, and based on the case you mentioned EV System doesn’t seem to correspond well.
Well yes, if you arrived with the same figures and follow the EV formula. But no way this will occur, since your getting the cost from different resources (EV derived from scheduling software after updating the programme, and AC from timesheets, material purchases, equipment cost, etc.).
In the programme Ive mentioned, we will not track CV & CPI, only SV & SPI to verify Schedule Variance. We just use the EV cost calculated by the software as the Actual cost and compare it with planned values. Most project stakeholders does not understand EV analysis what they know is you have actual progress and the cost associated with it is the actual cost, which is the EV cost calculated by the software after youve done your progress update.
SV = EV - PV (Negative is delay)On your example if the SV = 0 then I will say yes 100% efficient. It maybe efficient on the cost but delay on the schedule.
If Actual cost equals the Earned Value cost then Cost Variance is zero and Cost Performance Index is 1, hence the project is on budget and 100% efficient? Please correct my understanding...
Just want to add that if youre from Client/Engineers side and if the progrsmme your tracking is cost-loaded by a Contractor using Contract BOQ figures then your earned cost becomes your actual cost. BCWS remains the same.
Earned Value is a technique to measure the cost, units, qty and hrs using physical progress or also known as (BCWP) Budgeted Cost for Work Performed while Actual Value is the physical value of the progress or (ACWP) Actual Cost of Work Performed. In order to get the Earned Value, you need to have a (BAC) Budgeted At Completion or Budget.
Below are the Objectives and Field Definitions for (EVM) Earned Value Management
• Is the project is ahead of or behind schedule? (SV - Schedule Variance)
• Is the project is under or over budget? (CV – Cost Variance)
• How efficient the project in terms of time? (SPI - Schedule Performance Index)
• How efficient the project in terms of cost? (CPI – Cost Performance Index)
• How much work should be done? (BCWS / PV - Budgeted Cost for Work Scheduled)
• How much work is done? (BCWP / EV - Budgeted Cost for Work Performed)
• How much did it cost? (ACWP / AV - Actual Cost of Work Performed)
• What is the total Project supposed to cost? (BAC - Budget At Completion or Budget)
• What do we now expect will be needed to finish the Project? (ETC - Estimate To Completion or remaining cost to complete)
• What do we now expect the total Project to cost? (EAC - Estimate At Completion or total cost at completion)
• How much do we now expect to eventually underspend/overspend (VAC - Variance At Completion)
The difference is: earned value is the value earned as planned, while actual is actual, it may be more than the budgeted or may be less. Is this right?
Earned Value (EV) is the value of work performed expressed in terms of the approved budget assigned to that work for an activity or work breakdown structure component.
Actual Cost (AC) is the total cost actually incurred and recorded in accomplishing work performed for an activity or work breakdown structure component. It is the total cost incurred in accomplishing the work that the Earned Value measured.
Mai,
Earned Cost is another name for Budgeted Cost of Work Performed, i.e. how much you should have spent to complete the task or the work package, based on the Baseline Cost and the task or work package % complete
Actual Cost, or Actual Cost of Work Performed, is how much you have actually spent
Alexandre
Just want to comment on the interpretation of Actual Cost and Physical %.
If physical % complete is used as % complete type then it should be the actual physical progress % complete of an activities and not synchronize with units or cost. It can be measure with production steps or weighted steps or simple rule of thumb (got feel but not accurate). Actual cost is the physical accumulated actual cost booked on the activity. (Proper procedure is using a cost account taken from the BOQ or contract and someone is monitoring the actual using company accounting system or any monitoring system to track actual cost per cost account and activity). These are used for calculating Earned Value to determine if an activity or task is spending more or less than a budget. Therefore the actual values are taken from that system and entered to primavera as actual cost per cost account and activity using import or manual input. Some scheduler or companies are using software interface program or in-house program interface to P6 for automatic update. These values cannot be entered by Global Change because it is not a simple mathematic like (Physical % complete * budget). If you are doing that then I will consider it as a wrong practice because it is not a proper used of Physical % complete. I suggest to use unitor duration % complete which automates the actual cost when % completes is entered. I mean no harm…sorry!
You have to enter actual cost manually because physical % complete is a user’s manual input and depending on the activity % complete based on activity steps if tick. It does not automatically calculate the actual units/cost. However, you can do it by performing global change.
For me, I used to do it in Excel or even global change, it depends.
When we run the pro. on specific date and start imposing the actual percentage .
Considering that we are working on loaded activities ,we have to imposing actual cost for each activities or just the physical % complete .
The Schedule % Complete specifies how much of the activitys baseline duration has been completed so far. Computed based on where the current data date falls between the activitys baseline start and finish dates. If the data date is earlier than the BL Start, the Schedule % Complete is 0. If the data date is later than the BL Finish, the Schedule % Complete is 100. The Schedule % Complete indicates how much of the activity duration should be currently completed, relative to the selected baseline.
Note: Summary Schedule percent complete when displayed on an organize band, will ALWAYS be calculated as (BCWS* 100) / BAC, regardless of what earned value technique is selected for the activitys WBS.
It is important to note that the value of scheduled % complete shown in summary bands is based on a weighting of the underlying actvities BCWS, not duration.
Schedule % Complete specifies how much of the activity baseline duration has been completed so far. This is computed based on where the current data date falls between the activitys baseline start and finish dates.
RE: Schedule % Complete
Sorry guys,
Im lost and dont understand the query. What we are trying to attain here?
RE: Schedule % Complete
Christian,
Your note to Rodel is correct. This happens when the project is progressing mainly on non-critical activities, but was already delayed on the critical ones.
Thats why we should track the project not only thru EV anaylsis, which is helpful to verify cost performance, but also CPM analysis to check status of previously known critical activities, and how current progress affects the schedule.
Best regards,
R. Catalan
RE: Schedule % Complete
Rodel
“It maybe efficient on the cost but delay on the schedule”.. this is exactly my point, to me it doesn’t seem reasonable to say that a project is still on budget while a schedule is delay (especially huge delay), but perhaps this may be possible on the early stage of a delay…
R. Catalan
I can understand where you are coming from, and based on the case you mentioned EV System doesn’t seem to correspond well.
I appreciate your thoughts...
RE: Schedule % Complete
Christian,
Well yes, if you arrived with the same figures and follow the EV formula. But no way this will occur, since your getting the cost from different resources (EV derived from scheduling software after updating the programme, and AC from timesheets, material purchases, equipment cost, etc.).
In the programme Ive mentioned, we will not track CV & CPI, only SV & SPI to verify Schedule Variance. We just use the EV cost calculated by the software as the Actual cost and compare it with planned values. Most project stakeholders does not understand EV analysis what they know is you have actual progress and the cost associated with it is the actual cost, which is the EV cost calculated by the software after youve done your progress update.
Hope this clears the natter with you.
Best regards,
R. Catalan
RE: Schedule % Complete
Christian,
SV = EV - PV (Negative is delay)On your example if the SV = 0 then I will say yes 100% efficient. It maybe efficient on the cost but delay on the schedule.
RE: Schedule % Complete
R. Catalan
If Actual cost equals the Earned Value cost then Cost Variance is zero and Cost Performance Index is 1, hence the project is on budget and 100% efficient? Please correct my understanding...
RE: Schedule % Complete
Dear All,
Rodels posts are correct in doing EV analysis.
Just want to add that if youre from Client/Engineers side and if the progrsmme your tracking is cost-loaded by a Contractor using Contract BOQ figures then your earned cost becomes your actual cost. BCWS remains the same.
Best regards,
R. Catalan
RE: Schedule % Complete
That is correct Annon,
Earned Value is a technique to measure the cost, units, qty and hrs using physical progress or also known as (BCWP) Budgeted Cost for Work Performed while Actual Value is the physical value of the progress or (ACWP) Actual Cost of Work Performed. In order to get the Earned Value, you need to have a (BAC) Budgeted At Completion or Budget.
Below are the Objectives and Field Definitions for (EVM) Earned Value Management
• Is the project is ahead of or behind schedule? (SV - Schedule Variance)
• Is the project is under or over budget? (CV – Cost Variance)
• How efficient the project in terms of time? (SPI - Schedule Performance Index)
• How efficient the project in terms of cost? (CPI – Cost Performance Index)
• How much work should be done? (BCWS / PV - Budgeted Cost for Work Scheduled)
• How much work is done? (BCWP / EV - Budgeted Cost for Work Performed)
• How much did it cost? (ACWP / AV - Actual Cost of Work Performed)
• What is the total Project supposed to cost? (BAC - Budget At Completion or Budget)
• What do we now expect will be needed to finish the Project? (ETC - Estimate To Completion or remaining cost to complete)
• What do we now expect the total Project to cost? (EAC - Estimate At Completion or total cost at completion)
• How much do we now expect to eventually underspend/overspend (VAC - Variance At Completion)
RE: Schedule % Complete
The difference is: earned value is the value earned as planned, while actual is actual, it may be more than the budgeted or may be less. Is this right?
RE: Schedule % Complete
Hi Mai,
According to PMBOK 4TH edition:
Earned Value (EV) is the value of work performed expressed in terms of the approved budget assigned to that work for an activity or work breakdown structure component.
Actual Cost (AC) is the total cost actually incurred and recorded in accomplishing work performed for an activity or work breakdown structure component. It is the total cost incurred in accomplishing the work that the Earned Value measured.
Regards,
Arnold
RE: Schedule % Complete
Mai,
Earned Cost is another name for Budgeted Cost of Work Performed, i.e. how much you should have spent to complete the task or the work package, based on the Baseline Cost and the task or work package % complete
Actual Cost, or Actual Cost of Work Performed, is how much you have actually spent
Alexandre
RE: Schedule % Complete
Dear Arnold:
what the difference between Actual Cost And Earned Cost?
the majority think it is a same.
regards.
RE: Schedule % Complete
Hi Rodel,
I absolutely agree with you.
Salman,
If you want to update your units or cost you can take Rodel’s suggestion.
Regards,
Arnold
RE: Schedule % Complete
Sorry Guys!!!
Just want to comment on the interpretation of Actual Cost and Physical %.
If physical % complete is used as % complete type then it should be the actual physical progress % complete of an activities and not synchronize with units or cost. It can be measure with production steps or weighted steps or simple rule of thumb (got feel but not accurate). Actual cost is the physical accumulated actual cost booked on the activity. (Proper procedure is using a cost account taken from the BOQ or contract and someone is monitoring the actual using company accounting system or any monitoring system to track actual cost per cost account and activity). These are used for calculating Earned Value to determine if an activity or task is spending more or less than a budget. Therefore the actual values are taken from that system and entered to primavera as actual cost per cost account and activity using import or manual input. Some scheduler or companies are using software interface program or in-house program interface to P6 for automatic update. These values cannot be entered by Global Change because it is not a simple mathematic like (Physical % complete * budget). If you are doing that then I will consider it as a wrong practice because it is not a proper used of Physical % complete. I suggest to use unitor duration % complete which automates the actual cost when % completes is entered. I mean no harm…sorry!
RE: Schedule % Complete
Hi Arnold,
Can you please suggest the Global Change for multiplying the Physical % complete with Budgeted units.
Thanks in advance.
RE: Schedule % Complete
Mai,
You have to enter actual cost manually because physical % complete is a user’s manual input and depending on the activity % complete based on activity steps if tick. It does not automatically calculate the actual units/cost. However, you can do it by performing global change.
For me, I used to do it in Excel or even global change, it depends.
Regards,
Arnold
RE: Schedule % Complete
Dear Arnold:
When we run the pro. on specific date and start imposing the actual percentage .
Considering that we are working on loaded activities ,we have to imposing actual cost for each activities or just the physical % complete .
Regards.
RE: Schedule % Complete
Hi Mai,
BCWS stands for Budgeted Cost of Work ScheduleD.
Regards,
Arnold
RE: Schedule % Complete
dear hady:
what do u mean by BCWS please be clear?
thanks
RE: Schedule % Complete
The Schedule % Complete specifies how much of the activitys baseline duration has been completed so far. Computed based on where the current data date falls between the activitys baseline start and finish dates. If the data date is earlier than the BL Start, the Schedule % Complete is 0. If the data date is later than the BL Finish, the Schedule % Complete is 100. The Schedule % Complete indicates how much of the activity duration should be currently completed, relative to the selected baseline.
Note: Summary Schedule percent complete when displayed on an organize band, will ALWAYS be calculated as (BCWS* 100) / BAC, regardless of what earned value technique is selected for the activitys WBS.
RE: Schedule % Complete
Hi Shahzad,
For activities that doesnt have a resource loaded the schedule % complete is always based on duration.
For activities having resource cost loaded then the schedule % complete is always based on BCWS.
RE: Schedule % Complete
Shazad,
It is important to note that the value of scheduled % complete shown in summary bands is based on a weighting of the underlying actvities BCWS, not duration.
RE: Schedule % Complete
Hi Shahzad,
Schedule % Complete specifies how much of the activity baseline duration has been completed so far. This is computed based on where the current data date falls between the activitys baseline start and finish dates.
Regards.