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Overview | Example | Step 1 | Step 2 | Step 3 | Step 4 | Step 5 |
Earned Value Analysis - Example (Hands On)
Step 5 : Analyze EV Values
Please verify the Gantt chart, you will be see the following values.
Analysis of Values in Gantt Chart:
% Complete :
a)% complete of User Interface task: 45 %
% complete is always related to duration. User Interface task was originally scheduled to complete in 10 days. Due to less actual hours done for this task by Sam, now this task is required 11 days to complete. Out of 11 days, task had been completed 5 days duration. It means, 45% of task had been completed till now.
i.e. 5 * 100/11 = 45.4545
= 45%
b)% complete of Database Design task: 50 %
Database design was originally scheduled to complete in 10 days. Out of 10 days of duration, task had been completed 5 days duration. It means, 50% of task had been completed till now.
% Work Complete :
a)% Work complete of User Interface task: 40 %
Original estimation is 80 hours of work. Out of 80 hours of planned work; 32 hours of task actually completed. i.e. 40 %
i.e. 100*32/80 = 40 %
b)% Work complete of Database Design task: 50 %
Original estimation is 80 hours of work. Out of 80 hours of planned work; 40 hours of task actually completed. i.e. 50 %
To view Earned value, we have to apply the Earned value table to tracking gantt.
Steps
- On View menu -> Choose Tracking Gantt
- View -> Tables -> More Tables -> Earned Value -> Apply
Note: Please insert additional columns as below. The following gantt is from MS Project 2007. Please look for similar column names, if you are using MS Project 2003.
Tracking Gantt Chart will looks like below:
Please see below for explanation of EV values obtained from example:
Baseline Cost or BAC: The Baseline Cost fields show the total planned cost for a task, a resource for all assigned tasks, or for work to be performed by a resource on a task. Baseline cost is also referred to as budget at completion (BAC), an earned value field.
BAC for User Interface is $ 960 (i.e. total 80 hours of the task was planned at rate of $12)
BAC for Database design task is $640 (i.e. total 80 hours of the task was planned at rate of $8)
BAC for project plan is total cost of User Interface task and Database design task: $1600
BCWS: The BCWS (budgeted cost of work scheduled) fields contain the cumulative time phased baseline costs up to the status date or today's date.
BCWS for User Interface task:
Status Date of the project: 2/9/2009
Planned Hours (Budgeted hours) for User Interface task till 2/9/2009: 40 hours
Resource assigned to User Interface task: Sam
Sam Hourly Rate: $12
Planned Cost (Budgeted Cost) for User Interface task till 2/9/2009: 40 * 12 = $480
BCWS for Database Design task:
Status Date of the project: 2/9/2009
Planned Hours (Budgeted hours) for Database Design task till 2/9/2009: 40 hours
Resource assigned to User Interface task: Tom
Tom Hourly Rate: $8
Planned Cost (Budgeted Cost) for Database Design task till 2/9/2009: 40 * 8 = $320
BCWS for System Design task (Summary task) and project plan: $800 (i.e. $480 + $320)
BCWP:The BCWP (budgeted cost of work performed) fields contain the cumulative value of the task's, resource's, or assignments's percent complete multiplied by the timephased baseline costs. BCWP is calculated up to the status date or today's date. BCWP value also known as earned value.
Earned value: A measure of the cost of work performed up to the status date or current date. Earned value uses your original cost estimates saved with a baseline and your actual work to date to show whether the actual costs incurred are on budget.)
i.e. BCWP = % complete * Baseline Cost till Status Date
Explanation of BCWP values in above example:
User Interface task’s BCWP:
% complete till status date: 45.4545%
Baseline cost for User Interface task: $960
BCWP value = 45 % of $960
(45.4545 * 960) / 100 = $436.36
Database design task’s BCWP:
% complete till status date: 50%
Baseline cost for Database design task: $640
BCWP value = 50 % of $640
=
(50 * 640) / 100 = $320
BCWP for project plan: Cumulative cost of BCWP values of User Interface task and Database design task: $436.36 + $320
= $756.36
ACWP: The ACWP (actual cost of work performed) fields show cost already done on a task, up to the status date.
i.e. ACWP values actual cost incurred till status date.
Explanation of ACWP values in above example:
ACWP of User Interface task:
Actual hours done till status date: 32 hours
Resource (Sam) hourly rate : $12
Actual cost till status date: 32 * 12 = $384
ACWP of Database design task:
Actual hours done till status date: 40 hours
Resource (Tom) hourly rate : $8
Actual cost till status date: 40 * 8 = $320
ACWP for project plan is actual cost incurred: $384 + $320 = $704
Schedule Variance (SV): The SV (earned value schedule variance) field shows the difference in cost terms between the current progress and the baseline plan of a task, all assigned tasks of a resource, or for an assignment up to the status date or today's date.
You can use SV to check costs to determine whether tasks or assignments are on schedule.
SV is the difference between budgeted cost of work performed (BCWP) and budgeted cost of work scheduled (BCWS) . SV is expressed in currency units.
Microsoft Office Project calculates the SV as follows:
SV = BCWP - BCWS
- If the SV is positive, the task is currently ahead of schedule in cost terms
- If the SV is negative, the task is currently behind schedule in cost terms
- If the SV is zero, the task is on schedule in cost terms
Explanation of SV values in above example:
SV of the User Interface task: $436.36 - $480 = -$43.64
SV of the Database design task: $320 - $320 = $0
Cost Variance (CV): The CV (earned value cost variance) fields show the difference between how much it should have cost and how much it has actually cost to achieve the current level of completion up to the status date or today's date.
You can use CV to check whether you're under, over, or exactly within your budget for a task. You might find this useful when assessing budgetary performance in the project to date.
CV is the difference between the task's BCWP (budgeted cost of work performed) and ACWP (actual cost of work performed). Microsoft Office Project calculates the CV for a task as follows:
CV = BCWP – ACWP
- If the cost variance is positive, the cost for the task is currently under the budgeted, or baseline, amount, and your actual costs are less than your baseline costs for the current level of completion on the task
- If the cost variance is negative, the cost for the assignment is currently over budget, and your actual costs are more than your baseline costs for the current level of completion on the task
Explanation of CV values in above example:
CV of User Interface task: $436.36 - $384.00
= $52.36 (i.e. we spent less cost than planned till status date on this task.)
CV of Database design task: $320.00 - $320.00 = $0 (i.e no cost variance found between planned and actual)
SPI: The SPI (schedule performance index) field shows the ratio of the budgeted cost of work performed to the budgeted cost of work scheduled (BCWP/BCWS). SPI is often used to estimate the project completion date.
SPI = BCWP/BCWS
- An SPI ratio greater than 1 indicates that you're ahead of schedule
- An SPI ratio less than 1 indicates that you're behind schedule
Explanation of SPI in above example:
SPI of User Interface task: $436.36/$480.00 = 0.91
SPI of Database Design task: $320.00/$320.00 = 1
SPI of project is (0.91 + 1.00) / 2 = 0.95
CPI: The CPI (cost performance index) fields show the ratio of budgeted (or baseline) costs of work performed to actual costs of work performed, up to the project status date or today's date.
CPI is the ratio of BCWP (budgeted cost of work performed) to ACWP (actual cost of work performed)
CPI = BCWP / ACWP
This value indicates whether you are over or under budget as of the status date.
- An CPI ratio greater than 1 indicates that you're under budgeted
- An CPI ratio less than 1 indicates that you're over budgeted
Explanation of CPI in above example:
CPI of User Interface task: $436.36/$384.00 = 1.14
CPI of Database design task: $320/00/$320.00 = 1.00
CPI for Project is average values of User Interface task and Database design task: (1.14 + 1.00)/2 = 1.07
EAC: The EAC (estimate at completion) field shows the expected total cost of a task based on performance up to the status date. EAC is also called forecast at completion (FAC).
EAC = ACWP + (Baseline cost - BCWP) / CPI
Explanation of EAC values in above example:
EAC for User Interface task: $384 + ($960 - $436.36)/1.14
= $384 + $523.64/1.14
= $384 + $453.33333
= $844.81
TCPI : The TCPI (to complete performance index) field shows the ratio of the work remaining to be done to funds remaining to be spent, as of the status date.
TCPI = (BAC - BCWP) / (BAC - ACWP)
A TCPI value greater than 1 indicates a need for increased performance for the remaining work of the project in order to stay within budget (so you may need to give up some quality).
An TCPI value less than 1 indicates performance can decrease to stay within budget, thus creating opportunities to increase quality or profit.
Explanation of TCPI values in above example:
TCPI for User Interface task:
($960.00 - $436.36)/($960.00 - $384.00)
523.64/576.00 =0.90909722
TCPI for Project is average values of User Interface task and Database design task: (0.90909722 + 1.00)/2 = 0.94
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