EVPM:

Earned Value Performance Measurement (EVPM) is a project management technique for measuring project progress in an objective manner. EVPM has the ability to combine measurement of scope, schedule and cost in a single integrated system. Advantageous: Provide a standard method of reporting project progress against the budgeted and baseline schedule for all projects Forecast the final cost and expected finish date of all projects Allows the performance of different projects to be easily compared by using standard metrics

Basic Definitions: Budget : is a total approved value of the project BAC : is the Budget less Management Reserve and is used for earned value Calculations PMB : Performance Measurement baseline is a time phased BAC PV or BCWS : is the value of planned work at a point in time derived from the PMB EV or BCWP : is the value of work completed at a point in time AC or ACWP: is the expenditure at a point in time to complete the work. ETC : a revised estimate of the remaining work EAC = AC+ ETC VAC = BAC EAC SV= EV PV or BCWP BCWS ( + ahead of plan & - behind the plan ) CV= EV- AC or BCWP ACWP (= below the cost & - above cost ) CPI= EV/AC ( 1 indicates on plan, over 1 is overspending & under 1 is underspending) SPI =EV /PV

Committed Cost Management System CCM Procurement & Contract Management system require producing CCM cost report. The budgets in this system consist of estimate plus allowance contingency and as contract and purchase orders are awarded these values are revised. In CCM the work packages may consist of one or more purchase orders or contacts. Work packages records : i. Budgeted values for each PO or Contract ii. Committed cost- The actual value of the Poor Contract iii. An allowance for changes iv. delivered value of work or delivered materials v. Quality checked value of work or delivered material vi. Accrual made at the end of each reporting period vii. Value of paid invoices viii. Unpaid commitments on Pos and Contracts

11 steps to EVPM
1Decompose the Project Scope : 2A project is broken down under a hierarchical structure called a WBS which is also called a Product breakdown structure under PRINCE2 Each deliverable should have the ability to be assigned to a single responsibility and may be clearly identifies and quality checked. The addition of all the WBS elements is the total scope of the project.

Assign Responsibility : An OBS should be created for the project with clearly defined roles and responsibilities. This is achieved by assigning responsibility for the work on each element on the WBS to a single person. (Note: a responsibility assignment matrix (RAM) is created by mapping WBS to OBS nodes and intersection points are called Cost Account (CA) and these are managed by a Cost Account Manager.

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Schedule the Work : A schedule is created for the work under the WBS and minimum one activity is required for each WBS element.

Milestones should be used to identify significant events and decision points. Interfaces to element outside the PMs responsibility should be identified as Milestones with constraints. All activities should be connected to create a closed network Activities that are not responsibility of the Project but affect the timing of the project such as approvals must be included in the schedule.

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Develop the Time Phase budget : Assign budget value to all activities The budget may be represent in dollars, hours, or other unit of measure The time - phased budget is called the Performance Measurement Baseline (PMB) The budget should be distributed in the same way that the cost will be recorded, thus if the project were to be executed exactly according to the time then the Actual Cost Curve would overlay the planned curve. The project budget is the addition of the PMB+ the management Reserve (MR) +Undistributed Budget (UB) the unplanned work. Margin Management Reserve

Contract Price Contract Budget Baseline Performance Measurement Baseline Distributed Budget Undistributed Budget Control account budget Work Package Planning Package 5-

Assign Objective Measurement of Performance : Each activity must have an objective measure of progress EV of an activity is expressed and as a portion of the budget The measured must be as such that the EV and Actual are accumulated consistently There are different method of determining progress ( 0%-100% , 0%,50%,100%, step milestones, quantities (e.g. meters, square meters, lines of code, web screens)

Set Performance Measurement Baseline : The time-phased budget is set and recorded as the PMS It is important that the PMB is formally approved and not changed without a formal change process The PMB must be realistic and achievable and not overload available resources Agreement form all major stakeholders is important for the acceptance of a PMB 7- Authorize and perform the work 8- Accumulate and Report Performance date : The period at which performance is measure and actual costs calculated must be planned. The actual costs and progress are recorded at the end of each period and the earned value calculated Actual costs should only include work accomplished and no other costs The ETC is then revised based on performance to date. 9- Analyse Project Performance data : Schedule Variance is calculated by comparing EV and PV Cost Variance is calculated by comparing EV and AC Progress of activities is compares to the baseline to establish slippages A revised schedule and revised estimate to complete are calculated to calculate the completion variance. 10- Take Management Action : Develop corrective plans when there are projected deviation from the baseline Ensuring changes are not to be made to historical data Follow up action must take place to ensure the corrective action plans are followed. 11- Maintain the baseline : Baseline changes must be racked and recorded All changes must be traceable Retrospective changes to the scope and schedule must not be made Notes: Measurement parameters that could be used and reported against are Cost, Labour Hours, Equipment Hours, Commodities(Tonnes of steel , lines of code ), point*(a valued judgment of the value of activities) Level that the data may be collected at could be project ,phase or stage of contract, WBS node, Cost account, planning package or work package or activity, commodity

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If multi phase and multi discipline project us to be manage using EV the all measure must be converted to a cost as this is the only common parameter allowing all elements to be combined. Using commodities or labour as a measuring parameter are good when the EV is to be performed on a part of a project in isolation, such as design phase or installation.

(*Points : A project estimate may be divided by a factor so the estimate added up to 10000 for example and the EV value calculated in Points. This is useful when a contractor has to show progress of a project in detail but does not want to give the client a breakdown of the project cost. ) PV and EV are often calculated at an activity level as it is comparatively simple to complete in software. Actual data (including costs, hours and commodities) are often recorded at the summary level as cost recording systems are not aligned to the requirement of the EV system. ( but they can be recorded at project, phase ,WBS node or activity level too ) ETC is often calculate form an estimate To produce a time phase ETC requires a maintained schedule an ETC need to be fed back into the schedule.

Bellow Table lists all basic formula used in Earned Value Management: Data Variances Indices Forecasts BAC VAC=BAC-EAC TCPI=(BAC-EV)/(BAC-AC) EAC EAC =BAC/ CPI ETC =(BAC-EV)/CPI Interpretations of Basic EVM Performance Measures Performance Measures > 0 & >1.0 > 0 & > 1.0 Ahead of Schedule under budget Ahead of Schedule on Budget SV& SPI Equal to 0 & 1.0 On Schedule under Budget On Schedule on Budget < 0 & < 1.0 Behind Schedule Under Budget Behind Schedule on Budget EAC = AC+ [(BAC-EV) / CPI ] =BAC /CPI VAC TCPI AC CV=EV-AC CPI=EV/AC CV CPI EV SV=EV-PV SPI=EV/PV SV SPI PV

CV & CPI

Equal to 0 & 1.0

<0 & < 1.0

Ahead of Schedule Over Budget

On Schedule Over Budget

Behind Schedule over Budget

Statistic shows that when CPI falls below 1, it, rarely, if ever, return to one or greater. (Once the project is over budget, finding a saving to offset that overrun without comprising the quality or scope is impossible. When SPI falls below one, it takes additional funding to bring the project in on time, which has a corresponding effect on the CPI. EVM: PV: Planned Progress in terms of monetary units, also called as BCWS = Schedule Progress (%) * Baseline Cost (BAC) Accordingly; Schedule % Complete = PV/BAC (Not Always used in P6 used for WBS not Activities) [(Data Date- baseline Start)/ (baseline finish- baseline start)]=>use to calculate Schedule % complete at an activity level. Schedule % complete for WBS depends on Cost while for activities it depends on time and calculated from the above formula

EV: Actual progress in terms of monetary value, also called as BCWP =Actual Progress (%) * Baseline Cost (BAC) Accordingly; Performance % complete = EV/BAC (Applicable in p6) Activity % Type: Activity % complete type can be Duration % complete, unit % Complete or physical % Complete : The Duration % Complete Actual Duration Planned Duration Not used in P6 (Orig Dur-Remaining Dur) Original Duration P6 formula for Activity The Unit % Complete Actual Unit Actual Unit +Remaining Unit Physical % Complete

Manually

Activity Steps

Note 1: All above formula are for Activity percentage complete and are not applicable for WBS elements. Note 2: Actual progress is reported by performance percentage complete, both for activities and WBS elements. Performance % Complete: Activity % Complete ( Duration % Complete, Unit % Complete, Physical % Complete *) WBS Milestones 0-100 % 50-50 % Custom % Complete Physical % Complete *: 1) Manual Values, 2) Step % Complete

Activity Performance % Complete Continuous Methods By Activity % complete & without Resource Curve By Activity % complete & with Resource Curve By WBS element (depend on Activity Progress) Depend on Activity Start/Finish

By 0/100

By 50/50

Custom

Performance % of Activity would be equal to the Activity % complete

Performance % Complete would be equal to Unit %Complete in order to use resource curve

Based on activity status number of progress MS defined for WBS & progress calculated based on them. They behave like as activity steps.

They all based on Activity Dates

Following Are few basic definition from Construction Scheduling book written by SALEH MUBARAK

Project Planning: Those processes performed to establish the total scope of the effort, define and refine the objectives, and develop the course of action required to attain those objectives PMBOK Project planning serves as a foundation for several related functions, such as cost estimating, scheduling, Project control, quality control, safety management and others. Project Management Plan: Defined as a formal, approved document that defines how the project is executed, monitored and controlled (PMI).The main objective is to define the approach to be used by the project team to deliver the intended project management scope of the project. Contractor need project scheduling to: 1. Calculate the project completion date 2. Calculate the start or end of a specific activity 3. Coordinate among trades and subcontractors, and expose and adjust the conflict. 4. Predict and calculate the cash flows ( as the timing of an activity has an impact on C/F) 5. Improve work efficiency 6. Serve as an effective project control tool 7. Evaluate the effect of changes (Change Order may have an impact on the budget, schedule, or both. Plan helps us to calculate the impact of these changes on the project schedules.) 8. Prove delay Claims: Critical Path Methos (CPM) can prove or disprove a delay claims. Practically, the only two types of relationships that can be combines are SS and FF When two activities have SS relation, in reality a small portion of the predecessor must occur before the successor starts. The total float is the combination of all types of the flowing floats) whether restricted or unrestricted) Start - restricted float: The amount of time we can delay the rest of the work in the activity, after it has started on its critical start date, without delaying the entire project. Finish - restricted float: The amount of time we can delay the start of work on the activity, or the rest of it if it has started, then finish on time without delaying the entire project. Double - restricted float: The amount of time we can delay the rest of the work in the activity, after it has started, then finish on time without delaying the entire project. Unrestricted float: The amount if time we can delay all or part of the activity without delaying the entire project. P112 Resource Allocation and Resource Levelling: Resources in Project Management indicate three main three categories: Labour (Human), Material, and Equipment. Ultimately everything is translated into a monetary quantity that may be a part of the Financial Resources. Resource Levelling is minimizing the fluctuation in day-to-day resource use throughout the project. It is usually done by shifting noncritical activities within their available floats. It attempts to make the daily use of certain resource as uniform as possible. (Main purpose is to improve work efficiency and minimize cost) In general Materials do not need to be levelled. In scheduling, two methods are available for assigning budgets to activities: 1. Assigning a lump-sum 2. Assigning a number of units of certain resources to the activity. The program will calculate the budget for a particular activity from the resource dictionary in the project data base. ( Most preferable as it increase the control and EVM)

Schedule Levels:
Level 1: PMS - Project Master Schedule which is also called as Executive Summary. This is major milestone type of schedule which usually highlights major project activities, milestones and key deliverables for the whole project. Level 2: SMS - Summary Master Schedule. Called as a Management Summary. It depicts the overall project broken down into its major components by area and is used for higher level management report. (Frequently developed by the client as part of its commitment planning for the project and then maintained by the contractor.) Level 3: PCS Project Coordination Schedule. Also called as a Publication Schedule. Initially developed as an integrated CPM overview of the project, the level 3 schedule is then maintained as an integrated rollup summary of the level 4 for reporting status to senior management. (Usually developed by main contractor as a part of tendering process for the project or by the project team during the initial phases of the planning. Level 4: Execution Schedule, also called as a Project Working Level Schedule. Level 4 is the detailed working level schedule, where each schedule is an expansion of part of a Level 3 schedule, and is established within the integrated project schedule. (It developed by the contractor, subcontractor or the project team prior to commencing work on the project execution.) Level 5: Detailed Schedule. Level5 schedule are developed by the workforce supervisor to plan and coordinate their work at the detail level; workaround and critical areas can be exploded here.

Time boxing:
A project has triple constraint of time, Scope, and Cost. If one parameter changes, other two must change to keep the three as a constant. Time boxing is normally used to complete a defined amount of work in a fixed time. So time is a fixed component and so the other two constraints (scope and time) should adjust to fit. This strategy may lead to following interpretations: We can complete as much as we can in the fixed period of time. We will apply as many resources as we need to complete the work in this fixed period of time Or something in between