Project Management Webinar - Project Insightdownloads.projectinsight.net/training/pmi-project... ·...
Transcript of Project Management Webinar - Project Insightdownloads.projectinsight.net/training/pmi-project... ·...
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Project Management Webinar
Initiate Project Intelligence®
Earned Value Basics – In Practice
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© 2017 Core Performance Concepts Inc.
Things to Know…
All participants will be on mute
Questions are welcome
Use the question box to ask questions
PM training is valid for 1 PDU
Must be in attendance for full session
PDU certificate sent by the end of the day
Recording and slides sent by tomorrow
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© 2017 Core Performance Concepts Inc.
Denise Rodriguez
Project Insight
Marketing
www.projectinsight.net
Moderator
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© 2017 Core Performance Concepts Inc.
Schedule a customized demo today!
+1 (949) 476-6499 x3
Request info: www.projectinsight.net
Project Insight
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© 2017 Core Performance Concepts Inc.
Presenter
Diane C. Buckley, MBA, PMP
CEO, Core Performance Concepts Inc.
Training in project management,
PMP® and CAPM® certification, leadership,
business analysis, agile and six sigma
www.coreperformanceconcepts.com
PMP® and CAPM® are registered trademarks of the Project Management Institute
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© 2017 Core Performance Concepts Inc.
Estimate, budget, and control project costs
Know the expected budget at completion for
the project as well as the activities
Measure actuals at the activity level
Manage earned value management indicators
Forecast changes as accurately as possible
Project Manager’s Responsibility
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© 2017 Core Performance Concepts Inc.
CV (Cost Variance)
EV (Earned Value) minus AC (Actual Costs)
SV (Schedule Variance)
EV (Earned Value) minus PV (Planned Value)
$600 - $800 =<$200>
$600 - $700 = <$100>
1 2 3 4 5 6 7 8 9 10
EARNED VALUE $600
PLANNED VALUE $700
ACTUAL COSTS $800
Budget at Completion $1,000
Earned Value Calculations
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© 2017 Core Performance Concepts Inc.
• The earned value is quite subjective on most projects I have had. If you ask 2 different persons, you may get 2 different assessments on the earned value of a task.
• Are there any guidelines for refining the qualitative assessment of level of completion to assure the accuracy of EV calculations?
Question from you…
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© 2017 Core Performance Concepts Inc.
Budget at Completion
Planned Value(PV)
Actual Costs(AC)
Earned Value(EV)
Schedule Variance(EV-PV)
Cost Variance(EV-AC)
Landscape Plan $1,000 $1,000 $1,200 $ 1,000 $0 <$200>
Order Materials $ 500 $ 500 $ 400 $ 400 <$100> $0
Clear Old Yard $2,000 $1,500 $1,800 $1,000 <$500> <$800>
Install New Sprinkler System
$4,000 $2,000 $2,200 $2,500 $500 $300
Replanting $1,000 $0 $0 $0 $0 $0
Total $8,500 $5,000 $5,600 $4,900 <$100> <$700>
Earned Value Analysis – New Landscape
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Budget at Completion
Planned Value(PV)
Actual Costs(AC)
Earned Value(EV)
Schedule Variance(EV-PV)
Cost Variance(EV-AC)
Landscape Plan
$1,000 $1,000 $1,200 $ 1,000 $0 <$200>
Earned Value Analysis – New Landscape
Task Estimated Hours Dollars Percentage/Weight
Complete Y/N Actual Costs
Develop project charter 5 $100 10% Yes $100
Develop landscaping plan and schedule
25 $500 50% Yes $700 (10 extra hours)
Review plan with stakeholders & adjust
15 $300 30% Yes $300
Sign-off on plan and schedule 5 $100 10% Yes $100
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© 2017 Core Performance Concepts Inc.
• EV includes material costs as well, correct?
• Can you talk about incorporating non labor-related costs into the calculation?
Question from you…
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© 2017 Core Performance Concepts Inc.
Budget at Completion
Planned Value(PV)
Actual Costs(AC)
Earned Value(EV)
Schedule Variance(EV-PV)
Cost Variance(EV-AC)
Landscape Plan $1,000 $1,000 $1,200 $ 1,000 $0 <$200>
Order Materials $ 500 $ 500 $ 400 $ 400 <$100> $0
Clear Old Yard $2,000 $1,500 $1,800 $1,000 <$500> <$800>
Install New Sprinkler System
$4,000 $2,000 $2,200 $2,500 $500 $300
Replanting $1,000 $0 $0 $0 $0 $0
Total $8,500 $5,000 $5,600 $4,900 <$100> <$700>
Earned Value Analysis – New Landscape
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© 2017 Core Performance Concepts Inc.
Budget at Completion
Planned Value(PV)
Actual Costs(AC)
Earned Value(EV)
Schedule Variance(EV-PV)
Cost Variance(EV-AC)
Install New Sprinkler System
$4,000 $2,000 $2,200 $2,500 $500 $300
Earned Value Analysis – New Landscape
Task Estimated Hours Dollars Percentage Complete Y/N Actual Costs
Materials Delivered N/A $1400 35% Yes $1400
Dig Sprinkler Trench 110 $1100 ($10/hour) 27.5% Yes $800 (Complete in 80 hours)
Lay Pipe 100 $1000 ($10/hour) 25% No
Connect to Water & Test 10 $500 ($50/hour) 12.5% No
Only planned to achieved 55% through today ($600)
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© 2017 Core Performance Concepts Inc.
• Do you constantly recalculate when there is a change to project whether it is cost and/or schedule?
Question from you…
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© 2017 Core Performance Concepts Inc.
• I would like to hear a discussion on various contract scenarios. For instance, if you were working under a fixed price contract, you may look at the cost variances differently than in the scenarios noted.• Firm Fixed Price = $100,000 = PV
• Cost Plus = $90,000 = PV ($10,000 upon delivery)
Question from you…
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© 2017 Core Performance Concepts Inc.
• What’s the best way to ensure that the estimated hours provided by the team to complete the tasks are reasonable?
Optimistic + 4x Most Likely + Pessimistic-----------------------------------------------------
62 + 4*10 + 18------------------ = 10
6
6 + 4*10 + 44------------------ = 15
6
Question from you…
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© 2017 Core Performance Concepts Inc.
• What’s the best way to ensure that the estimated hours provided by the team to complete the tasks are reasonable?
Question from you…
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© 2017 Core Performance Concepts Inc.
• What’s the best way to ensure that the estimated hours provided by the team to complete the tasks are reasonable?• If you start to identify that the estimates are lower than
they should have been, at what point do you revise the estimated hours and budget?
• Then do you revise the budget going forward or from the beginning?
Question from you…
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© 2017 Core Performance Concepts Inc.
Budget at Completion
Planned Value(PV)
Actual Costs(AC)
Earned Value(EV)
Schedule Variance(EV-PV)
Cost Variance(EV-AC)
Landscape Plan $1,000 $1,000 $1,200 $ 1,000 $0 <$200>
Order Materials $ 500 $ 500 $ 400 $ 400 <$100> $0
Clear Old Yard $2,000 $1,500 $1,800 $1,000 <$500> <$800>
Install New Sprinkler System
$4,000 $2,000 $2,200 $2,500 $500 $300
Replanting $1,000 $0 $0 $0 $0 $0
Total $8,500 $5,000 $5,600 $4,900 <$100> <$700>
Earned Value Analysis – New Landscape
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© 2017 Core Performance Concepts Inc.
0
1000
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3000
4000
5000
6000
7000
8000
9000
100 400 300 800 1000 1400 400 600 1500 800 700 500
Jan Feb March April May June July August September October November December
Project S Curve
PV EV AC
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© 2016 Core Performance Concepts Inc.
Cost Performance Index (CPI)
CPI (Cost Performance Index) = Earned Value/Actual Costs
$4900/5600 = 0.875
For every dollar spent, you only receive $ 0.875 worth of value!
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Any questions?
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© 2017 Core Performance Concepts Inc.
Upcoming WebinarCore Concepts & Project Insight
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© 2017 Core Performance Concepts Inc.
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