Practical Earned Value Analysis: 25 Project Indicators from 5 Measurements
By Akram Najjar
()
About this ebook
The book starts by using the traditional terminology (BCWS, BCWP and ACWP) then switches to the recently revised PMI terminology: PV, EV and AC. It presents each of the 25 indicators using examples prepared with Microsoft Excel. Workouts follow most indicators. The approach is very practical with no text wasted on theory. The eBook is computational and is supported by various Excel workbooks which can be freely downloaded. The workbooks provide the reader with workouts, their solutions and a few templates to use when analyzing Earned Value.
The book is aimed at those who have tried absorbing EVA and found it theoretical or complex to use. Mostly, project members who are involved in monitoring, cost control and schedule management. For those aiming at PMI certification, this book follows the requirements of the PMBOK and can be used in parallel to other texts when preparing for PMP or CPMA tests.
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Practical Earned Value Analysis - Akram Najjar
Practical Earned Value Analysis
25 Project Indicators from 5 Measurements
by Akram Najjar
POB 113-5623, Beirut, Lebanon
Visit the site for this book at: http://www.marginalbooks.com
Email the author at: [email protected]
All rights reserved
Copyright © 2014
The Library of Congress Catalog Number: TXu001939844
Version 2.1
No part of this book may be reproduced except for printing the workouts in order to solve them. Otherwise, the book may not be transmitted in any form, electronic or mechanical, in part or in full, including photocopying, recording or by any information storage or retrieval system without permission in writing from the author.
E-Book ISBN: 9781642371161
Acknowledgements
1) All line graphics in this book are by the author.
2) All other graphics are imported workouts developed using Microsoft Office.
Table of Contents
1.0 Introduction
2.0 Where to Download the Workouts, Solutions and Template
3.0 Two Faults in Traditional Cost Analysis
4.0 Life without Earned Value Analysis
5.0 What is the Basic Principle of Earned Value Analysis?
6.0 The 5 Measurements in Earned Value Analysis
7.0 A Step by Step Example
8.0 Indicators 1 to 9: Basic EVA Variances and Indices
Indicator 1: SV the Schedule Variance
Indicator 2: CV the Cost Variance
Indicator 3: SPI the Schedule Performance Index and SP%
Indicator 4: CPI the Cost Performance Index and CP%
Indicator 5: The Rate of a project using BAC and CPI
Indicator 6: CSI Cost-Schedule Index (Critical Ratio CPI * SPI)
Indicator 7: The Spend Rate or the PV Rate
Indicator 8: The Average Performance and Average Cost
Indicator 9: Average Expected Performance to Finish
9.0 Workouts for Indicators 1 to 9
Workout 2: Dynamic Chart for EVA Variances
Workout 3: What is the Project Status over 6 Months?
Workout 4: What is the Burn Rate after 3 Months?
Workout 5: Extracting Information from a Realistic Case
Workout 6: Which statement is correct?
Workout 7: Which project has the better schedule?
10.0 Indicators 10 to 15: Time Based
Indicator 10: TEAC Time Estimate at Completion
Indicator 11: TVAC Time Variance at Completion
Indicator 12: TV Time Variance
Indicator 13: SV(t) Earned Schedule (Time Units)
Indicator 14: SPI(t) Schedule Time Performance Index
Indicator 15: DAC Delay at Completion = PD - TEAC
11.0 Workouts for Indicators 10 to 15
Workout 8: Calculating the Time Variance
12.0 Indicators 16 to 18: Percentages that Analyze Completion
Indicator 16: Work Scheduled for Completion (%)
Indicator 17: Percent Complete Work (%)
Indicator 18: Percent Spent (%)
13.0 Workouts for Indicators 16 to 18
Workout 9: Percentages to Analyze Completion (Indicators 16 to 18)
14.0 Indicators 19 to 20: Estimates and Forecasts of Completion
Indicator 19: ETC Estimate to Complete or Work Remaining
Indicator 20: EAC Estimate at Completion - 6 Different Modes
15.0 Workouts for Indicators 19 to 20
Workout 10: Different Estimates to Complete
Workout 11: Estimate at Completion
Workout 12: Different Types of Estimate at Completion
16.0 Indicators 21 to 23: Based on EAC
Indicator 21: Percent Spent (using EAC)
Indicator 22: VAC Variance at Completion ($)
Indicator 23: Variance at Completion (%)
17.0 Indicators 24 to 25: How to Complete a Delinquent Project
Indicator 24: TCPI To Complete Performance Index
Indicator 25: TCSPI To Complete Schedule Performance Index
18.0 Workouts for Indicators 24 to 25
Workout 13: Using TCPI and TSCPI on the IT Project
19.0 Appendix A: A Template for Use in Earned Value Analysis
20.0 Appendix B: Solutions to Workouts
Solution to Workout 3: What is the Project Status over 6 Months
Solution to Workout 4: What is the Burn Rate after 3 Months?
Solution to Workout 5: Extracting Information from a Realistic Case
Solution to Workout 6: Which statement is correct?
Solution to Workout 7: Which project has the better schedule?
Solution to Workout 8: Calculating the Time Variance
Solution to Workout 9: Percentages that Analyze Completion
Solution to Workout 10: Different Estimates to Complete
Solution to Workout 11: Estimate at Completion
Solution to Workout 12: Different Types of Estimate at Completion
Solution to Workout 13: Using TCPI and TSCPI on the IT Project
21.0 Appendix C: Summary of EVA Formulas and Definitions
22.0 About the Author
1.0 Introduction
This eBook is meant for those who wish to master the principles and methods of Earned Value Analysis (EVA). With this objective in mind, it is important to state our assumptions first:
1) The history of EVA is interesting. It is best looked up under the Wikipedia article on EVA (Click Here).
2) The industry uses two terms that cover two different practices: Earned Value Analysis and Earned Value Management. One is often used for the other. In this eBook, we will concentrate on Earned Value Analysis since we are concerned with the principles of EVA and not managing EVA in a project.
3) Earned Value Analysis, as in all management practices, has its adherents and opponents. There are some who find that EVA’s indicators do not indicate
properly. This eBook will not get involved in the duel. We will simply expose the analytic procedures for the indicators and show how to interpret them.
4) The industry has been using the traditional acronyms for EVA: BCWS, BCWP and ACWP. These are wieldy and difficult to pronounce when in a team meeting. The PMI has wisely introduced a new set: PV, EV and AC. We will use these terms in this eBook. To introduce a smooth changeover for those used to the earlier terms, in the first few chapters, we will use both terminologies and slowly fade out the traditional acronyms and remain with those defined by the PMI.
In a separate eBook, we present a detailed procedure on how EVA can be used to track costs and performance in Microsoft Project. It is call How to Track Costs and Earned Value with Microsoft Project
. Along with other technical and literary eBooks, it is published at www.marginalbooks.com.
2.0 Where to Download the Workouts, Solutions and Template
All examples in this eBook are presented using Microsoft Excel 2013. Since 2013 does not differ from 2010, 2007 and 2016 where it matters, it is hoped that the reader will not be inconvenienced by this choice. (In fact, the only place that is really different is that 2007 uses a Home Button to reach options while 2010 and 2013 place these under the File Menu).
The site for this eBook is www.marginalbooks.com. You can download a zipped file containing the 3 Excel Workbooks noted below from the page for the eBook (Click Here). Check the last sentence in this book for the code to open the zipped file.
Once unzipped, you will get a folder