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What Is It ?
Why Do I Need It ?
How Do I Do It?
Earned Value Analysis
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Todays Situation
Need for accurate and consistent statusinforation
Nuerous co!le" #and interrelated$ !ro%ects &ro%ects with any W'S acti(ities Virtual o)ces
Di(erse and inte*rated anufacturin* !rocesses
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Theres ,oo -or I!ro(eent
./0 of !ro%ects are3(er 4ud*et'ehind schedule
520 of all !ro%ects 6nish at1780 of their initial 4ud*et
And soe9 after hu*ein(estents of tie andoney9 are si!ly ne(erco!leted
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0 co!leteestiatin* 0 of'ud*et s!ent 0 of
wor done 0 oftie ela!sed
su4%ecti(e9inco!lete
draws falseconclusions
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Analysis
=Earned Value Analysis> is an industry standard way to
easure a !ro%ects !ro*ress9forecast its co!letion date and 6nal cost9
and!ro(ide schedule and 4ud*et (ariances
alon* the way@
'y inte*ratin* three easureents9 it !ro(idesconsistent9 nuerical indicators with which youcan e(aluate and co!are !ro%ects@
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Whats Bore I!ortant?
Cnowin* where youare on schedule?
Cnowin* where youare on 4ud*et?
Cnowin* where youare on woracco!lished?
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.
EVA Inte*rates All Three
It co!ares the &ANNED aount ofwor with what has actually 4een3B&ETED9 to deterine if COST9
SCHEDULE, and WORK ACCOMPLISHEDare !ro*ressin* as !lanned@
Wor is =Earned> or credited as it is
co!leted@
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4ecause@@@
DiFerent easures of !ro*ress fordiFerent ty!es of tass
Need to =roll u!> !ro*ress of anytass into an o(erall !ro%ect status
Need for a unifor unit of
easure #dollars or worGhours$@
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4ecause@@@
&ro(ides an =Early Warnin*> si*nal for!ro!t correcti(e action@
'ad news does not a*e well@
Still tie to reco(er
Tiely re
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And 3ne Bore
,easonWhy ou Need EVA
?
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'ecause It Bay 'e ,e
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3C9 So What Is This
StuF?
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So9 Is This StuF New ?
Its 4een around since the si"ties@
=ostKSchedule ontrol Systes
riteria>#KSS$
E l f I f l E d V l
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E"a!les of Inforal Earned ValueAnalysis
Its done inforally without realiLin* it@+/0 tie used9+/0 $$s!ent
So9 if +/0 of the wor is done9 I ust 4e3C ??
Sho! Moor estiates
ost co!arisons'ud*et (s@ Actual
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Hows This &ro%ect Doin*?
0
20000
40000
60000
80000
100000
120000
Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03
Proecte!
Actual
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ets Tae A oo nder TheHood
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G3r*aniLed
EVA wors 4est when wor isOco!artentaliLed@
o!artentaliLation is 4est achie(ed with
a wellG!lanned Wor 'readown Structure@
So9 how do I create a W'S for a reallyco!le" !ro%ect?
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&ro!er W'S Desi*n
3ne W'S !er !ro*ra Deli(era4leGoriented Wor not in the W'S is outGofGsco!e
Each descendin* le(el re!resents oredetail
-ull #and accurate$ de6nition is ey De6ned deli(era4le#s$
Tiefrae for deli(ery of !roductTotal cost #direct and indirect$ to deli(er!roduct
A S l W ' d
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A Sa!le Wor 'readownStructure
Ser(e &iLLas to ustoers
&ro(ide the&lace
oo the-ood
Ser(eustoers
/Ot+es0
oo theSauce
Bae theDou*h
'uild the &iLLa
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W'S nits are =Wor &aca*es>
owest le(el W'S eleents
Ha(e an acco!anyin* narrati(e
Ha(e three easura4le co!onents
Sco!e of wor to 4e acco!lishedTotal #direct and indirect$ cost
Tiefrae for co!letion
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ontrol Account &lans
A A& is essentially a Wor &aca*e with soeadded features
Assi*nent of res!onsi4ility 3r*aniLation
Indi(idualDi(ision #if necessary$ into lowerGle(el Wor
&aca*es@
Betrics for easurin* EV !erforance
Bilestones 0 co!lete 3ther
The su of the A&s constitutes the &erforance
Beasureent 'aseline
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Soe New Ters
&V P &lanned Value
A G Actual ost
EV P Earned Value
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Earned Value De6nitions
&V=&lanned Value>
P-anned cst ! t+e tta- amunt ! 12
sc+edu-ed t #e pe!med #% t+e mi-estnedate.
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&V P &lanned Value or 'ud*eted ostof Wor Scheduled
0
20000
40000
60000
80000
100000
120000
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
"#$S
arne a ue e n ons
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arne a ue e n ons#cont@$
A =Actual ost of Wor &erfored>
Cst incued t accmp-is+ t+e 12 t+at +as
#een dne t date.
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AW& G Actual ost of Wor &erfored
4%000
&6000
0
20000
40000
60000
80000
100000
120000
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
"#$P
A#$P
arne a ue e n ons
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2.
arne a ue e n ons#cont@$
EVEarned (alue or 'ud*eted ost ofWor &erfored
T+e p-anned /nt actua-0 cst t cmp-ete t+e12 t+at +as #een dne.
EV
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EVG Earned Value or 'ud*eted ost ofWor &erfored
4%000
&&000
0
20000
40000
60000
80000
100000
120000
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
"#$P
"#$S
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&&000
4%000
&6000
0
20000
40000
60000
80000
100000
120000
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
"#$S
"#$P
A#$P
The Whole Story
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Soe Deri(ed Betrics
SV Schedule Variance #EVG&V$A co!arison of aount of wor !erforeddurin* a *i(en !eriod of tie to what wasscheduled to 4e !erfored@
A ne*ati(e (ariance eans the !ro%ect is4ehind schedule
V ost Variance #EVGA$A co!arison of the 4ud*eted cost of wor!erfored with actual cost@
A ne*ati(e (ariance eans the !ro%ect is o(er4ud*et@
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Schedule Variance Q ost Variance
Schedule Variance R EVG&V
;89///G 559///
SV R G 9///
ost Variance R EVGA
;89/// 59///
V R G .9///
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S&I Schedule &erforance Inde"S&IREVK&V
If S&I1 eans !ro%ect is 4ehind schedule
&I ost &erforance Inde" &IREVKA
If &I1 eans !ro%ect is o(er 4ud*et
SI ost Schedule Inde" #SIR&I "S&I$
The further SI is fro 1@/9 the less liely !ro%ect
reco(ery 4ecoes@
Soe Bore Deri(ed Betrics
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&erforance Betrics
S&I EVK&V
;89///K559/// R /@781
&I EVKA
;89///K5/// R /@7.5
SI S&I " &I
@781 " @7.5 R /@.7/
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Bain* &ro%ections
3nce a !ro%ect is 1/0 co!lete9 theo(errun at co!letion will not 4e lessthan the current o(errun@
3nce a !ro%ect is 2/0 co!lete9the &I does not (ary fro its current(alue 4y orethan 1/0@
The &I and S&I are statistically accurateindicators of 6nal cost results@
Source Defense Ac
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+5
102000
%0882
10386&
0
20000
40000
60000
80000
100000
120000
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
"#$S"#$P
A#$P
Bain* &ro%ections
Today
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102000
116,571
0
20000
40000
60000
80000
100000
120000
140000
"#$S"#$P
A#$P
Estiate to o!lete
Today
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A New riteria
Actiities 3ean a-ue4 as t+e% ae cmp-eted.
T+e a-ue eaned is t+e W5S #udgeted cst !t+e actiit% cmp-eted t date.
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Value of Earned Value
Schedule Status,e!ortin*
ost Status ,e!ortin*-orecastin*
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?
With an Earned Value Bana*eent Syste
e
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;/
e
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Shortcoin*s of Earned Value
Uuantifyin*Keasurin* wor!ro*ress can 4e di)cult@
Tie re
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Suary
EVA Q EVBS will hel! reduce *uesswor in Beasurin* !erforance
forecastin*
Need to *et 4eyond isleadin* easuresof !ro*ress@
,easons to use EVA and EVBS :ood !ro%ect ana*eent !ractice
3B' re
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arne a ue,esources
htt!KKwww@!i@or*K
htt!KKwww@ac
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Earned Value Analysis
UuestionsKDiscussion
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