abigail harperSenior Agile Project Manager| Provident Financial GroupLeeds, West Yorkshire, United Kingdom
Hi All,
This will possibly be a rudimentary question but I've had a good google with no avail.
I recently was asked about the state of a project (theoretical) and when and how much it will cost to complete. Of course I pulled all my earned value management information together.
Now the state of the project was that:
Duration: was planned for 1.5 years but was now at 3 years.
Cost: £6million todate (3mil at original BAC)
The leadership hope that completion will take place in 5 months and the above is the only information I have.
Now I got we're at 200% of the schedule but without a BAC for over the original 3mil I got completely stuck with how to calculate this out. I took it to be 200/6mil as a starting point, but it didn't seem right, but this also only get me a CPI, not SPI, ETC, EAC etc.
Could someone point me in the right direction please?
Let me quality my response with the statement that I assume you know how to use Earned Value, but not everybody who reads this does. If it sounds like I am overexplaining something, I'm not trying to make myself sound smart or talk down to anyone.
Based on what you have written, we know the following:
AC - the Actual Cost of the work completed (including work in progress) by today is 6 million. Possibly less if you only count 100% completed tasks. PV - the Planned Value, or budgeted cost, of all the work that was scheduled to be completed by today is 3 million. BAC - Budget At Completion. Since you are past the scheduled end date, your original BAC is the same as your PV - 3 million. This is useless, given current circumstances.
We don't know: EV - What was the Earned Value, or budgeted cost, of the work that has been completed by today? SV - Schedule Variance, or EV-PV CV - Cost Variance, or EV-AC SPI - Schedule Performance Index, or EV/PV CPI - Cost performance Index, or EV/AC EAC - Estimate at Completion, or BAC + AC - EV. ETC - Estimate to Completion, or BAC-AC. If your project had not already exceeded the original schedule and budget, we could use this measure. Given your circumstances, we can't know this using the information you have provided.
At this point in your project, SV, CV, SPI, CPI, and EAC might as well be meaningless, unless somebody you report to really needs to know these numbers. They don't tell you anything you don't already know - your project is late and over budget. Once you get back on track, they might be helpful, so don't completely ignore them, but don't spend a lot of time worrying about them, right now, if you don't have to.
You need to know how soon you will be done and how much it will cost. Others may have a different opinion, but mine is that EV will not help you answer these questions. Round up the team and verify (things may have changed since the start of the project):
* The work that is left * How much it will cost * How long it will take
Once you've done this, you can start using EV again.
...
1 reply by abigail harper
Apr 06, 2017 1:16 PM
abigail harper
...
HI Aaron,
Thanks for this answer. The fact were past the deadline just totally through me. I "best guessed" the approach similar to what you suggested but I was totally on the backfoot. Thanks for clarifying this for me. It will give me a lot more confidence with EV.
One more thought. You'll want to work with the team to figure out if and how the remaining work can be completed in 5 months. Tradeoffs (scope/cost) may be needed.
...
1 reply by Naomi Caietti
Apr 06, 2017 2:45 PM
Naomi Caietti
...
Great responses Aaron; always learning. Estimates are important from your experts.
There are different cases for calculating your EAC depending on how your project is going so you need to see which one applies to yours and do your calculations accordingly.
Hope this helps.
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1 reply by Vincent Guerard
Apr 06, 2017 4:09 PM
Vincent Guerard
...
Thanks Rami good link, clear.
Saving Changes...
abigail harperSenior Agile Project Manager| Provident Financial GroupLeeds, West Yorkshire, United Kingdom
Apr 06, 2017 11:50 AM
Replying to Aaron Porter
...
Let me quality my response with the statement that I assume you know how to use Earned Value, but not everybody who reads this does. If it sounds like I am overexplaining something, I'm not trying to make myself sound smart or talk down to anyone.
Based on what you have written, we know the following:
AC - the Actual Cost of the work completed (including work in progress) by today is 6 million. Possibly less if you only count 100% completed tasks. PV - the Planned Value, or budgeted cost, of all the work that was scheduled to be completed by today is 3 million. BAC - Budget At Completion. Since you are past the scheduled end date, your original BAC is the same as your PV - 3 million. This is useless, given current circumstances.
We don't know: EV - What was the Earned Value, or budgeted cost, of the work that has been completed by today? SV - Schedule Variance, or EV-PV CV - Cost Variance, or EV-AC SPI - Schedule Performance Index, or EV/PV CPI - Cost performance Index, or EV/AC EAC - Estimate at Completion, or BAC + AC - EV. ETC - Estimate to Completion, or BAC-AC. If your project had not already exceeded the original schedule and budget, we could use this measure. Given your circumstances, we can't know this using the information you have provided.
At this point in your project, SV, CV, SPI, CPI, and EAC might as well be meaningless, unless somebody you report to really needs to know these numbers. They don't tell you anything you don't already know - your project is late and over budget. Once you get back on track, they might be helpful, so don't completely ignore them, but don't spend a lot of time worrying about them, right now, if you don't have to.
You need to know how soon you will be done and how much it will cost. Others may have a different opinion, but mine is that EV will not help you answer these questions. Round up the team and verify (things may have changed since the start of the project):
* The work that is left * How much it will cost * How long it will take
Once you've done this, you can start using EV again.
HI Aaron,
Thanks for this answer. The fact were past the deadline just totally through me. I "best guessed" the approach similar to what you suggested but I was totally on the backfoot. Thanks for clarifying this for me. It will give me a lot more confidence with EV.
Thanks
Abbie
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1 reply by Aaron Porter
Apr 06, 2017 3:29 PM
Aaron Porter
...
I'm glad I could help. I don't use EV much, anymore, unless I want to see the results - nobody else does, where I work.
The benefit of EV is that it gives you more than just a gut feel that a project is on track, behind, or ahead of cost/schedule. If it is painfully that you are off track, the numbers don't solve anything.
Another thing to keep in mind about EV is that some of the measures only work during the project. If you calculate them after the project, your project can look like a success, according to the numbers, even if it was not.
One more thought. You'll want to work with the team to figure out if and how the remaining work can be completed in 5 months. Tradeoffs (scope/cost) may be needed.
Great responses Aaron; always learning. Estimates are important from your experts. Saving Changes...
Thanks for this answer. The fact were past the deadline just totally through me. I "best guessed" the approach similar to what you suggested but I was totally on the backfoot. Thanks for clarifying this for me. It will give me a lot more confidence with EV.
Thanks
Abbie
I'm glad I could help. I don't use EV much, anymore, unless I want to see the results - nobody else does, where I work.
The benefit of EV is that it gives you more than just a gut feel that a project is on track, behind, or ahead of cost/schedule. If it is painfully that you are off track, the numbers don't solve anything.
Another thing to keep in mind about EV is that some of the measures only work during the project. If you calculate them after the project, your project can look like a success, according to the numbers, even if it was not.
...
1 reply by Vincent Guerard
Apr 06, 2017 4:10 PM
Vincent Guerard
...
It was my understanding that EV, is not useful past the finish date.
There are different cases for calculating your EAC depending on how your project is going so you need to see which one applies to yours and do your calculations accordingly.
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