PC#04 – Project progress monitoring
Upon successful completion of this module, You will have sufficient knowledge to monitor the progress of the project using Earned Value Management System (EVMS)
For monitoring the progress of the project one has to have a proper work breakdown structure in place, clearly defined work packages, their start and end dates, budgets, coding scheme and the rules of credit defined against each work package. The start and end dates of the the work packages must be in alignment to the project schedule.
- Planned Value (PV) : How much is the value of work planned work till date.?. In other words, how much is the budgeted cost of work scheduled (BCWS) till the review date.
- Earned Value (EV) : How much work did we actually complete till date?. In other words, how much is the budgeted cost of work performed (BCWP) till date.
- Actual Cost (AC) : How much did we actually spend to complete the work?. How much is the Actual Cost of Work Performed (ACWP), till the review date
- Calculate Schedule Variance (SV, SPI) : Schedule variance SV = EV – PV, Schedule Performance Index (SPI) = EV/PV
- Calculate Cost Variance (CV, CPI) : Cost variance CV = EV – AC, Cost Performance Index (CPI) = EV/AC
- Plot ‘S’ Curve (Diagram#2 given below)
- Forecast :
- Estimate at Completion (EAC) = AC + (BAC – EV) / CPI where BAC = Budget at Completion, the total budget of the project
- Perform root cause analysis (RCA)
- Perform corrective actions and preventive actions
- Schedule variance reports
- Cost variance reports
- Schedule performance index (SPI)
- Cost performance index (CPI)
- To complete performance index (TCPI)
Project Green Woods
While counting the earned value, organizations may use;
0-100 policy – Which states that, work can be treated as completed, only when it is done completely. In this case, till the % completion becomes 100, the earned value of that work will remain at 0. Once the percentage completion touches 100, the work will be treated as earned fully.
50-50 policy – states that, when the work starts, it can be treated as 50% completed, the remaining 50% can be treated as completed, only when the work is fully completed.
If nothing is specified, we go by Planned value x % completed. In this exercise, we have followed planned value apportioned against the % completed.
Our review date is 15th July, 2019.
As per the data sheet, as on July 2015, we were supposed to complete work worth 22,100. We completed work worth 20,600. In order to complete this much work, we have incurred an actual cost of 19,990.
Planned Value (PV) = 22,100
Earned Value (EV) = 20,600
Actual Cost (AC) = 19,990
Schedule Variance (SV) = EV-PV = 20,600 – 22,100 = -1,500
Schedule Performance Index (SPI) = EV/PV = 20,600/22,100 = 0.93
Cost Variance (CV) = EV-AC = 20,600 – 19,990 = 610
Cost Performance Index (CPI) = EV/AC = 20600 / 19,990 = 1.03
A schedule performance index (SPI) of 1 indicates that the project is progressing as per the schedule.
SPI > 1 indicates that the team is completing more work than planned.
SPI < 1 indicates that the project is lagging behind schedule wise.
A cost performance index (CPI) of 1 indicates that the work completed got completed within the budgeted cost.
CPI > 1 indicates that the work completed did not consume the budget allocated.
CPI < 1 means, the work completed consumed more than the allocated budget.
In a broader sense, if the SPI and CPI =1, that is an indication that the project is on schedule within budget.