Predicting The Future - Earned Schedule
Transcript of Predicting The Future - Earned Schedule
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1INTEGRATED SYSTEM TECHNOLOGIES
Predicting The FuturePeter Hayward BAE Systems Insyte
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2INTEGRATED SYSTEM TECHNOLOGIES
Predicting The Future
• Steve said to me that perhaps I could maybe touch on one or two main issues with forecasting the Estimate To Complete
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3INTEGRATED SYSTEM TECHNOLOGIES
Predicting The Future
• Steve said to me that perhaps I could maybe touch on one or two main issues with forecasting the Estimate To Complete
• Problem is, there aren’t any. Anyone can predict the future. The issue is actually:
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4INTEGRATED SYSTEM TECHNOLOGIES
Predicting The Future
• Steve said to me that perhaps I could maybe touch on one or two main issues with forecasting the Estimate To Complete
• Problem is, there aren’t any. Anyone can predict the future. The issue is actually:
• Recognition of what the data is telling you – getting them to believe
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5INTEGRATED SYSTEM TECHNOLOGIES
Agenda
• Methods of predicting the future!• Statistical EACs• TCPIe• Earned Schedule
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6INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs
• Most of the data looked at in Earned Value terms are backward looking, i.e. where we are today
• However, there are some good ways to take past performance trends and do a what if for the future
• Most tools will do this for you
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7INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs
• The Estimate At Complete (EAC) costs are the sum of what you have spent to date, Actual Cost of Work Performed (ACWP) plus the Estimate To Complete (ETC)
• In BAE Systems Insyte, we gather the forecast (ETC) from the CAM each month, this is a manual ETC
• This can then be compared with the statistical EACs to give indications of impending problems
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8INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs
• Taking the performance to date (CPI) you can predict the costs in the future if there is no change in performance
CPI= BCWP if BCWP = 100 then CPI = 0.75 ACWP 133
This means that for every £1 of work being done it is costing you £1.33 to do it!
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9INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs
• So consider this. If you had a budget of £200k and you are performing at 0.75 then why wouldn’t the EAC be £200k/0.75 = £266.7k
• OK, so you may have done half of the work then a more precise formula would be ACWP + BAC-BCWP = £133k + £200k - £100k
0.75 0.75
which still equals £266.7k because the performance (CPI) in this example is constant
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10INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs
• Now it gets more interesting when you start to introduce the current SPI as well
• Thus if you are over spending and behind schedule (CPI and SPI <1) then the EAC will be even higher. Consider this:
• Then you can weight what amount of the CPI or SPI that you use• Then you can start to use average CPIs, last 3 months and last 6 months• And then• And then• And then
BAC - BCWP + ACWPCPI x SPI
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11INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs – Some Formulas
• 3 Period Av = BCWR3 Per Av CPI
• 6 Period Av = BCWR6 Per Av CPI
• Cum CPI = BCWRCPI (Cum)
• Cur CPI = BCWRCPI (Cur Period)
• CPI x SPI BCWRCPI (CUM)) SPI (CUM)
• Cost & Sched BCWRCPI (CUM)) SPI (CUM)
BCWR = BAC - BCWP (CUM)
CPI and SPI x a PF
• Linear RegressionThe linear regression formula is calculated by finding the formula for the straight line that best fits the plot of cumulative ACWP vs. cumulative BCWP, then entering the BAC into that formula to calculate the EAC
• MICOMUses the 6 period Av CPI x SPI
And then do you include MR or not?
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12INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs
• Don’t remember the formulas• Use the data
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13INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs – Ideal Chart?
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14INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs – Ideal Chart?
Tight group though manual EAC (LRE) is higher than ALL statistical EACs
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15INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs – Would You Question This Chart
Statistical EACs
CAM EAC
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16INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs – What happened so far?
Current budget as of May 09 is £12.72MThey are looking to rebaseline in the next month!!!!!
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17INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs - Do You Believe Yet?
£3,000,000
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BCWSIACACWPBCWPLinear (IAC)Linear (IAC)
October 2005, the Independent Estimate At Complete shows you are going to overspend and is predicting about £7.75mDo you believe it?
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18INTEGRATED SYSTEM TECHNOLOGIES
Statistical EACs - Predicts The Future
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BCWSIACACWPBCWP
October 2006, now do you believe it?
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19INTEGRATED SYSTEM TECHNOLOGIES
TCPI – Now it gets really interesting
• So if the CPI gives you Cost Performance in the past, what about Cost Performance in the future
• This is where TCPI comes in, To complete Cost Performance Index• It shows you the Cost Performance in the future required to get back to
Budget (TCPIb) and to get to the Estimate (TCPIe) – remember in BAE Systems Insyte the Estimate (ETC or LRE) is from the CAM, manual ETC
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20INTEGRATED SYSTEM TECHNOLOGIES
TCPIe
• Another formula
BCWRETC
orBAC-BCWPEAC-ACWP
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21INTEGRATED SYSTEM TECHNOLOGIES
TCPIe – How Does It Work?
BAC = 500
Time Now
ACWP = 100
BCWP = 80
CPI = 80/100 = 0.8
BCWR = 500 – 80 = 420
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22INTEGRATED SYSTEM TECHNOLOGIES
TCPIe – How Does It Work?
BAC = 500
Time Now
ACWP = 100
BCWP = 80
CPI = 80/100 = 0.8
BCWR = 500 – 80 = 420
ETC = 400
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23INTEGRATED SYSTEM TECHNOLOGIES
TCPIe – How Does It Work?
BAC = 500
Time Now
ACWP = 100
BCWP = 80
CPI = 80/100 = 0.8
BCWR = 500 – 80 = 420
ETC = 400 TCPIe = BCWR/ETC= 420/400 = 1.05
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24INTEGRATED SYSTEM TECHNOLOGIES
TCPIe – How Does It Work?
BAC = 500
Time Now
ACWP = 100
BCWP = 80
CPI = 80/100 = 0.8
BCWR = 500 – 80 = 420
ETC = 400 TCPIe = BCWR/ETC= 420/400 = 1.05
Question to CAM – How are you going to improve your current performance?
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25INTEGRATED SYSTEM TECHNOLOGIES
TCPIe – How Should It Work?
BAC = 500
Time Now
ACWP = 100
BCWP = 80
CPI = 80/100 = 0.8
BCWR = 500 – 80 = 420
ETC = 400= 525
TCPIe = BCWR/ETC= 420/525 = 0.8
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26INTEGRATED SYSTEM TECHNOLOGIES
TCPIe – It works the other way as well
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CPITCPIe
43.242.942.942.640.839.239.239.239.2ACWP
4961.561.591.591.591.591.591.591.5EAC
1.480.821.120.560.690.770.770.760.76TCPIe
2.042.051.971.581.641.681.691.761.72CPI
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27INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule
• In the summer of 2002 Walt Lipke developed a new concept – Earned Schedule and the seminal article was published in the March 2003 issue of the Measurable News (the publication of PMI-CPM).
• The new concept uses a new set of EV measures• This is not an Earned Schedule master class – please attend the Earned
Schedule workshop on Thursday of this week with Mick Higgins and Alex Davis or see Walt Lipke or Kim Henderson for that
• Web site - http://www.earnedschedule.com/• One of the new measures is Schedule Performance Index Time (SPI(t))• The advantage of SPI(t) is that, unlike the SPI, it DOES NOT return to 1
at completion
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28INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – What It Isn’t
SV in currency
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29INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – What Is It?
Time Now
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30INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – What Is It?
Time Now
SV in time
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31INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – What Is It?
Time Now
SV in time
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32INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – What Is It?
• The amount of full periods earned plus the amount of part periods earned
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33INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – What Is It?
• The amount of full periods earned plus the amount of part periods earned• From our chart you can see that we have earned
6 full periods plus a fraction of a period• The calculation for the fraction:
ES = 6.25
BCWP(Cum) – BCWS(Last Full Period)BCWS(Last Full Period+1)-BCWS(Last Full Period)
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34INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – SPI(t)
• Schedule Performance Index Time SPI(t) = ES/AT where AT = Actual No periods at Time Now
• From the example ES = 6.25AT = 7SPI(t) = 6.25/7
= 0.89
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35INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – SV(t)
• Schedule Variance Time SV(t) = ES - Actual No periods at Time Now
• From the example ES = 6.25AT = 7SV(t) = 6.25 - 7
= -0.75
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36INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Plot The Data
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37INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Plot The Data
SV(t)
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38INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Add a Trend Line
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39INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Pick a Point
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40INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Pick a Point
1.9 periods late
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41INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Look at SV
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42INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Three Months Later
1.4 periods late
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43INTEGRATED SYSTEM TECHNOLOGIES
Earned Schedule – Do You Believe Yet?
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SVSV(t)Linear (SV(t))
The Project was due to complete in February 2006 but the SV(t) shows you will be anywhere from 7 to about 20 months late.Do you believe it?
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44INTEGRATED SYSTEM TECHNOLOGIES
Predicts The Future
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The Project finishes in February 2007 (12 months late), now do you believe it?
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45INTEGRATED SYSTEM TECHNOLOGIES
Recap
• This has not been a master class but should be food for thought• It’s not getting the data• It’s getting someone to believe and do something about it….
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46INTEGRATED SYSTEM TECHNOLOGIES
Questions?
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47INTEGRATED SYSTEM TECHNOLOGIES
BAE Systems Integrated System Technologies (Insyte) Limited Victory PointLyon Way, Frimley, CamberleySurrey, GU16 7EXUnited KingdomTelephone +44 (0) 1276 603000Fax +44 (0) 1276 603001
email [email protected]/insyte