Practice Standard for Earned Value Management

Practice Standard for Earned Value Management

1. EVM performance analysis and forecasting

   • Schedule analysis and forecasting
     • schedule variance
       • when is a positive value indicates a favorable condition
       • when is a negative value indicates a unfavorable condition
       • sv=ev-pv
       • this is a percentage sv%= sv=pv
     • schedule performance index
       • indicates how efficiently the project team is using it is time
       • SPI =ev/pv
     • time estimate at completion
       • estimate of when the project will be completed, if current trends continue
       • EAC=(BAC/SPI)/ (BAC/months)
   • cost analysis and forecasting
     • to-complete performance index
       • TCPI=(BAC_EV)/(BAC_AC)
     • cost performance index
       • CPI=EV/AC
         • is the cumulative cost efficiency of a project
     • cost variance
       • CV=EV_AC
         • shows whether a project is under or over budget
     • estimate at completion
       • EAC=AC+ETC
       • ETC=(BAC_EV)/CPI
       • EAC=AC+[(BAC-EV)/CPI]= BAC/CPI
         • equivalent
     • variance at completion
       • VAC=BAC_EAC
       • VAC%= VAC/BAC
     • estimate at completion
       • EAC=BAC/CPI
   • management by exception
     • this practice contributes greatly to the efficiency and effectiveness of project management

2. Guidance for the use of key EVM practices

   • establish a performance measurement baseline
     • develop time-phased budget for each work task
       • the full scope of work each task or activity must be schedule and resourced
     • assign unambiguous management responsability
       • integrated management of work scope, schedule, and cost requires that a single individual.
     • decompose work scope to a manageable level
       • most work scopes broken down for optimal planning, execution, and control.
     • select earned value measurement techniques for all tasks
       • en EV techniques is selected for each task based on the temporal and physical qualities of the work
     • maintain integrity of performance measurement baseline throughout the project
       • the four key practices established, relating scope, schedule and cost.
   • Measure and Analyze performance against the baseline
     • record resource usage during project execution
       • in EVM, the cost associated with the performance of work scope must be recorded on a regular basis.
     • objectively measure the physical work progress
       • many research projects, however, yield only intangible outcomes until their final product emerges at the end.
     • credit earned value according to earned value techniques
       • also assures thet earned values are credited in the same measurement unit used to establish planned values and record actual cost.
     • analyze and forecast cost/Schedule performance
       • The funtion of EVM forecat is to compare their objetive values with management estimates offered by project delivery team members
     • report performance problems and/or take action
       • it is critical that EVM provide the best possible feedback to those who must make the decisions and take the actions.