23184909 the S Curve is a Well Known Project Management Tool

7/30/2019 23184909 the S Curve is a Well Known Project Management Tool

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The S Curve is a well known project management tool and it consists in "a display of

cumulative costs, labour hours or other quantities plotted against time".The name derives

from the S-like shape of the curve, flatter at the beginning and end and steeper in the

middle, because this is the way most of the projects look like.

The S curve can be considered as an indicator and it's used for many applications related to

project management such as: target, baseline, cost, time etc. That's why there is a varietyof S Curves such as:

-Cost versus Time S Curve;(appropriate for projects that contain labour and non-labour

tasks).

-Target S Curve;(This S Curve reflects the ideal progress of the project if all tasks are

completed as currently scheduled)

-Value and Percentage S Curves;(Percentage S Curves are useful for calculating the

project's actual percentage complete)

-Actual S Curve;(This S Curve reflects the actual progress of the project to date)

In order to be able to generate a S Curve, A Baseline and Production Schedule are

necessary because they contain important information for each task: -the Baseline -

contains information about Actual Start date and finish date.

-The Baseline - can also contain information about Man Hours and costs.

-The Production Schedule contains information about the actual percentage complete.

There are some software scheduling packages that generate automatically S Curves. For

example MS Project does not have this possibility so a third party software application is

needed to process the Baseline and Production Schedule data and generate the needed S

Curve.( for example S Curve Generator that integrates with MS EXcel to generate S

Curves).

Sample project s Curve



“S” Curve and Earned Value Concept <br>Tools for project monitoring andcontrol

By Prof. B.P. Nansi

Constant monitoring and controlling of a project under implementation is one of the key functions of theProject Manager. This is because, once it gets underway, a project may or may not perform as planned.Variations in time and cost can take place. Where the project managing contracts are on a 'cost-plus'basis, the adherence to time and cost is important, but not critical. In recent times, project-managingcompanies have to enter into time bound contracts and any slippage will attract penalty.

For this reason it is necessary for the senior team members to have a periodic progress report. Also, thetop management and stakeholders constantly want to know the progress. They ask crucial questions:

* How much work is actually done?* How much work was planned?* Will the project be completed as scheduled?* Is it delayed?* What is the expected date of completion as at present rate?* How much cost is incurred as on date?* What is the budgeted cost for the work done?* Is the incurred cost as per the budget?* Is there a cost over-run?* What will be the total cost on completion at present rate?

There are other reasons that a project is monitored and controlled. These are:



* Progressive payments to contractors* Project manager's billing to the customer * Decisions of project completion and job closure

So progress monitoring and controlling is vital. And you must measure what you wish to control. Progressmeasuring is a crucial part of project management. It is here that the "S" curve and the earned valuesconcept are used.

What is an "S" Curve?For "S" curve, let us understand WBS. WBS (Work Breakdown Structure) is the breakdown of the workinto systematic and logical component packages. Each package is further sub divided. This process iscontinued up to manageable suitable component packages are decided. Each final component is calledan activity. When all activities are complete, the project is complete.

Each activity is then assigned the following parameters.

1. Start date2. End date3. Cost4. Weightage (Its contribution to the project progress. The sum of wieghtages of all activities is 100%)

5. Responsible agency6. Resources

After WBS, draw the "S" curve for the project. The curve shows the time duration on the horizontal axisand the cumulative per cent progress of the project on the vertical axis. The curve begins at 'Project startdate, 0%' point and completes on 'Project end date, 100%' point. It is observed that, in a project, the workprogresses slowly in the beginning, picks up speed somewhere 1/3 the duration and then slows downagain creeping to 100%. The curve looks like an "S" and is popularly known as Project "S" Curve.

How to use the "S" curve· Select a day for the report. This date is generally month end.· Measure the work actually preformed on each activity. Then calculate the progress achieved on eachactivity.· Calculate the contribution of each activity to the project progress, using the weightage value.

· Sum up activity contributions and find the total project progress.· Read from the "S" curve the work scheduled as on the report day.

So you know the work performed versus work scheduled. That tells whether the project is on theschedule, early or delayed. You may plot the actual work done curve along side the "S" curve. That will be

Actual curve. Then plot the remaining work along the actual curve and you have the forecast.

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-Curve - A Useful Tool for Project Planning and Project Progress Reporting The concept of S-Curves is not new. S-Curves have been used as a charting or graphical tool for manydecades for various purposes. They are also not new to Project Management having been used to plotproject effort against time.

I believe however that they have been under-utilised as a project management reporting tool. Theyprovide a very effective visual method for portraying the planned effort over the course of the project andfor ongoing reporting of Actual against Plan against Baseline.



S-Curves provide a graphical medium for project reporting, by plotting cumulative effort against time. Theresulting curve should resemble an S in shape (see Example S-Curve at the end of this document).

The Project Baseline, the Current Plan and the Current Actual Progress To-date can all be plotted on theone chart. This will clearly highlight differences between the Baseline, the Current Plan, and ActualProgress to-date, enabling corrective or remediation action to be taken early.

Correctly constructing and analysing an S-Curve representing your project schedule can tell you a lot

about how your project deliverables and resource assignments have been scheduled. In particular theshape of the curve can provide visual feed-back on your project planning by highlighting potentialproblems with your planning.

S-Curves are a very useful tool for initial planning of your project and also for reporting progress againstthe Plan or Baseline.

Analysis of "Actual Progress To-date Curve" tracking against "Baseline Curve" facilitates the achievementof your project goals by providing early warning that you may be straying from the Baseline

See the Example S-Curve below which shows the Work or Effort on the Vertical Axis and the Date on theHorizontal Axis.

This example has been produced from software my colleague (Mike Turner) and I have developed to runoff MS Project Server 2007.

We also have a stand-alone S-Curve reporting module we have developed to run off MS Project 2003and 2007. If you are interested in the software, please contact me by clicking here.

Example S-Curve

mailto:[email protected]

mailto:[email protected]



Actual - Cumulative actual

work completed based onthe marked completed taskson the schedule

Plan - Cumulative currentlyplanned work over thecourse of the project basedon tasks on the schedule

Baseline - Approved andsaved baseline of work over the course of the projectbased on tasks on theschedule

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An S-curve is defined as:

"A display of cumulative costs, labor hours or other quantities plotted against time. The

name derives from the S-like shape of the curve, flatter at the beginning and end and

steeper in the middle, which is typical of most projects. The beginning represents a slow,

deliberate but accelerating start, while the end represents a deceleration as the work runs

out."

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Using S-curves

Why Use an S-curve?

S-curves are an important project management tool. They allow the progress of a project to betracked visually over time, and form a historical record of what has happened to date. Analyses

of S-curves allow project managers to quickly identify project growth, slippage, and potential problems that could adversely impact the project if no remedial action is taken.

Determining Growth

Comparison of the Baseline and Target S-curves quickly reveals if the project has grown (TargetS-curve finishes above Baseline S-curve) or contracted (Target S-curve finishes below BaselineS-curve) in scope. A change in the project's scopes implies a re-allocation of resources (increaseor decrease), and the very possible requirement to raise contract variations. If the resources arefixed, then the duration of the project will increase (finish later) or decrease (finish earlier), possibly leading to the need to submit an extension of time claim.

Figure 6: Calculating Project Growth using S-curves

Determining Slippage

Slippage is defined as:

"The amount of time a task has been delayed from its original baseline schedule. The

slippage is the difference between the scheduled start or finish date for a task and the

baseline start or finish date. Slippage can occur when a baseline plan is set and the actual

dates subsequently entered for tasks are later than the baseline dates or the actual

durations are longer than the baseline schedule durations".[2]

Comparison of the Baseline S-curve and Target S-curve quickly reveals any project slippage (i.e.the Target S-curve finishes to the right of the Baseline S-curve). Additional resources will needto be allocated or additional hours worked in order to eliminate (or at least reduce) the slippage.An extension of time claim may need to be submitted if the slippage cannot be eliminated or reduced to an acceptable level.



Figure 7: Calculating Project Slippage using S-curvesDetermining Progress

Comparison of the Target S-curve and Actual S-curve reveals the progress of the project over time. In most cases, the Actual S-curve will sit below the Target S-curve for the majority of the project (due to many factors, including delays in updating the production schedule). Onlytowards the end of the project will the curves converge and finally meet. The Actual S-curve cannever finish above the Target S-curve. If the Actual S-curve sits above the Target S-curve at theCut Off Date, the Production Schedule should be examined to determine if the project is trulyahead of schedule, or if the Production Schedule contains unrealistic percentage complete valuesfor ongoing tasks.

Figure 8: Calculating Project Progress using S-curves

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Earned Value Management



Project Budget:

The most basic cost control technique is to develop a project budget and then track spendingagainst it. On a small project, this can be as simple as having a target cost goal for the total project. You could monitor project costs and sound the alarm if the percent of dollars spentexceeds the percent completion estimated for the project. You could also prepare a time-phased

budget, as shown in the figure below, breaking the overall budget goal into intervals of weeks,months, quarters or years. This can provide a budget baseline for tracking actual costs against periodic budget targets. When the cumulative budget of estimated project costs are plottedgraphically over time, they usually result in the shape illustrated, which is sometimes called an"S" curve, since it looks like an inclined "S."

Budget Spend Plan Tracking:

A simple technique for tracking project costs is to develop a weekly or monthly cumulative budget spend plan and then track actual costs against the plan. The slope of the spend planindicates the project expenditure rate, sometimes called the "burn rate." By plotting actual costsagainst the budget spend plan, you can see differences between actual spending and the spend plan. This technique provides a simple, top-level view of project financial performance that can be useful for executive briefings, especially where you want to match expenditures to a fundingstream.

Budget Spend Plan

The spend plan can be generated using a project management software tool. If you are usingMicrosoft Project, you can copy the hours from the Resource Usage table into MS EXCEL,apply labor rates to each resource type, and then sum costs by week to provide an accurateresource loading profile and spend plan. This can also be used to establish a performancemeasurement baseline of the Budgeted Cost of Work Scheduled. (See sections below on EarnedValue Management Systems.)

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If the project is on schedule, the spend plan method provides the needed budget statusinformation. If the project shown were behind schedule, the project manager would no longer beable to understand project status from this graph. The budget picture would be worse than itlooks, but it would be impossible to quantify.

When a project is sufficiently large or complex that it is unclear which project elements are

contributing to deviations from the budget plan, a more rigorous approach to cost and scheduletracking should be employed. This following method links cost and schedule performancetogether and presents them in a form that facilitates management analysis and presentation.

Earned Value Management System (EVMS):

Project cost and schedule performance measurements should really be managed as integratedelements and not as separate entities. If your budget spend plan shows you over spending andyour schedule shows milestones slipping, you can know you may be in trouble, but you will haveno way to make a quantitative assessment of how bad the trouble is. EVMS solves this problem by providing an accurate picture of spending and accomplishments related to a baseline plan.This enables you to quickly form conclusions about the project team's staffing levels and productivity, as well as giving insight into areas of the WBS where the problems are occurring. I

will never run a project without at least applying EVM principles if not having an informal or formal EVM tracking system in place.

In the past, EVM has been called Cost/Schedule Control System (C/SCS) or, for the old-timers,7000.2 or C-Spec, after the DoD standards that originated the approach. Earned ValueManagement provide an integrated view of cost and schedule performance. Unless you aretracking earned value, you really have no idea what is going on with your project!

Understanding the Basics of EVM:

EVM compares three pieces of information:

• How much work you planned to have accomplished by now (in dollars or hours) calledthe Planned Value;

• How much you have actually spent by now (in dollars or hours), called Actual Cost; and

• The value, in terms of your baseline budget, of the work accomplished by now (in dollarsor hours), called the Earned Value!

The first two pieces of data are compared to the Earned Value in terms of differences and ratios,to result in variances and performance indexes. That is the essence of EVM; the rest is details.

The Dreaded EVM "Formulas":

Thinking of EVM calculations in terms of remembering formulas, or for you Latin scholars -formulae, is a way to make things more complicated and obscure, although some may find itcomforting to memorize formulas until they understand. If you understand the following

explanation, you will not need to think in terms of formulas.The thing to remember is that Earned Value is the new kid on the block, so all the basiccalculations involve differences or ratios with respect to Earned Value.

The difference between Earned Value and your plan (PV) is Schedule Variance,

The difference between Earned Value and your spending (AC) is Cost Variance,

The ratio of Earned Value to plan (PV) is your Schedule Performance Index,



The ratio of Earned Value to cost (AC) is your Cost Performance Index.

You can figure out what is subtracted from what by remembering that positive variance isfavorable (good) and negative is unfavorable (bad).

You can figure out what is on top of an EVM ratio, by remembering that >1 is favorable and <1is unfavorable.

So much for the basic formulae!

Interpreting EVM Computations:

• When you take a ratio of what you have done by now (EV) to what you have spent (AC),you get a reading on productivity called a cost performance index (CPI).

• When you compare where you are by now (EV) with where you planned to be (PV), youget a reading of progress called the schedule performance index(SPI).

• If instead of ratios, you take the differences, then they are called cost and schedulevariances.

You can look at these cumulative to date or for the last period. You can also look at these at the

total project level and for lower levels of the WBS.

• If you have good productivity and slow progress, then you are understaffed.

• If you have low productivity, then either you have too much unplanned work or you haveestimated poorly and the project has more work content than you thought.

Earned Value Implementation (Informal Approach)

To determine earned-value performance measurements for your project, you need to accomplishfour steps:

1. Establish a performance measurement baseline in dollars (or hours) (this will determinethe "budgeted cost of work scheduled" for the life of the project);

2. Determine "earned value" for work accomplished to date (earned value is the "budgetedcost of the work performed");

3. Relate earned value to the budgeted cost of work scheduled; and

4. Relate "actual cost of work performed" to earned value.

These four steps provide data to present a comprehensive picture of project cost and schedule performance.

Implementation of such a process can be scaled to fit projects of varied size and complexity. Oneshould select the appropriate level of the WBS for data gathering and appropriate means for determining earned value. This can range from a few top-level categories where earned-value isdetermined from percent completion estimates to projects where earned value is determination is

preplanned based on assignment of dollar values to completion of specific milestones or subtaskswithin tasks.

When the project schedule is expressed as budgeted dollars (or hours of work), you candetermine the Budgeted Cost of the Work Scheduled (BCWS) at any point. This involvesdetermining the amount of work that was scheduled to have been accomplished under thebaseline plan. (For large projects, near-term WBS elements can be budgeted into work- packages, while future tasks may have budget values allocated as future planning packages or asundistributed budget.)

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After the performance measurement baseline (the Budgeted Cost of Work Scheduled) isdetermined, project status should be evaluated to assess earned value for tasks in progress andcompleted. Rules for determining earned value for each work package may be established duringinitial cost/schedule control system implementation. Earned value can be determined by suchmethods as:

• pro-rating value based on task percent completion;

• linking earned value to sub-task completions, where a predetermined amount is accruedfor each completed sub-task;

• earning value for draft, final, and approval of a project document; or

• accruing part of earned value at successful completion of test cases.

Summing earned value across the WBS determines the Budgeted Cost of the Work Performed. If the work is on schedule, the BCWS will be equal the BCWP (if the earned value accuratelyreflects performance). If the project cost actuals are on target, the Budgeted Cost of the Work Performed will be equal to the Actual Cost of the Work Performed.

Earned Value Management Example:

The figure above illustrates how to determine the Budgeted Cost of Work Scheduled bysumming the dollar values of the work scheduled for accomplishment at the end of period "X".The Budgeted Cost of Work Performed is determined by summing the earned value for the work actually accomplished, shown in gray shading.

PLANNED VALUE (Budgeted cost of the work scheduled) = 18 + 10 + 16 + 6 = $50

EARNED VALUE (Budgeted cost of the work performed) = 18 + 8 + 14 + 0 = $40

ACTUAL COST (of the work performed) = $45 (Data from Acct. System)

Therefore:

Schedule Variance = 40 - 50 = -$10

Schedule Performance Index = 40 / 50 = 0.8

The above example illustrates the concept of determining the Planned Value by summing thedollar values of the work scheduled for accomplishment at the end of period "X". The Earned



Value is determined by summing the budgeted value for the work actually accomplished, shownin gray shading.

The Cost Variance is the difference between the Earned Value and the Actual Cost. In theexample above, we are pretending our accounting system gives us "actuals" of $45, so there is a$5 negative cost variance. The Cost Performance Index (CPI) is 40/45 = .89. That means the

project is spending about $1.13 for every $1.00 of (EV) budgeted work accomplished.Projections Based On EVM Data:

One can make a rough approximation of schedule slippage using the project spend rate and theSchedule Variance, but such a method is not considered technically valid. If the spend rate is$200K per month and the SV is $300K, you might want to say the project is 1.5 months behind, but that would be a rough approximation.

EVM data is often used for projecting an Estimate-at-Completion (EAC). There are variousmethods of doing this, and it is probably best to use a few different methods to determine a rangeof EACs before picking a number that looks most probable.

The simplest is to take the original cost estimate for the project, called the Budget-at-

Completion, and divide that by the Cost Performance Index. If the BAC is $1,000,000 and theCPI is 0.9, you have reasonable grounds for an EAC of 1M/.9 or $1.111M.

When you are behind schedule, Schedule Variance often turns into Cost Variance, especially if there is pressure to achieve the original schedule goal. Based on this, a somewhat pessimisticEAC can be computed as BAC/ (CPI*SPI), which would reflect the compound impact of schedule and cost problems on the project.

If you have grounds for believing that productivity or staffing problems have been corrected, youcould compute a Cost-to-Complete, using a more favorable CPI, and then append that to theActual Cost. This would have to be considered a Rosy Scenario approach.

23184909 the S Curve is a Well Known Project Management Tool

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