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Deltek EVM Guide
Table of Contents
White Papers • • • What is EVMS? What is the Health of my Project? The Use and Benefits of Earned Value How Deltek Cobra Helps Satisfy the Requirements of the ANSI/EIA-748 Standard on EVMS
Case Stories • • • • BAE Systems (US) Stanford Linear Accelerator Project General Dynamics Land Systems Sierra Nevada
Third Party Documents • • • The National Defense Industrial Association (NDIA) ANSI EIA 748 Intent Guide Final FAR Ruling News Article: Acquisition councils finalize EVM rule
and tools for enterprise project planning and control. the budget for each task is earned. there are a number of methods for objectively measuring earned value. considered by many companies and governments to be a best practice. . Additionally. processes. The process includes integration of scope. It can also be described as the sum of the budgets for completed work. a performance measurement baseline. giving you time to implement effective corrective action. Earned Value Explained Earned value is a means of putting a dollar value on project status to enable companies to measure project health throughout the lifecycle of the project. Earned value management also provides indices are used as early detection mechanisms. EVMS provides a common-sense process for project management. schedule. schedule. EVMS supplies valuable project health indicators. For activities not yet begun. and cost into a baseline against which accomplishments can be measured • Assess accomplishments objectively • Analyze signiﬁcant variances from the plan and forecast the impact The essence of earned value management is this: a budget is established at the task level and as work progresses. cost. It presents an excellent means to establish and maintain internal processes and controls as stipulated by section 404 of the Sarbanes-Oxley Act of 2002 (SOX) for project-based companies. 4 Earned Value Management provides indices used as early detection mechanisms. This provides a metric to measure what was spent and the budgeted amount of the work completed (or earned value). giving you time to implement effective corrective action. the earned value is zero. For activities in progress. The basic EVMS process comprises the following key concepts: • Plan all of the work • Integrate scope.® What is EVMS? How an Earned Value Management System can Help You Introduction An earned value management system (EVMS) is a set of best business practices. and earned value. Earned value for completed activities is equal to the total budget for those activities. The basic theory behind these methods is to multiply the budget by a “percentage complete” to get the earned value.
common sense.Short. the remaining project costs are continually evaluated and updated. • Program Organization . • Estimate at Completion .These EVMS concepts are incorporated into a process guide deﬁned in the American National Standards Institute ANSI/EIA-748 Standard on Earned Value Management. discrete tasks in the schedule are objectively assigned status and earned value is calculated.A document is created that describes how each of these steps will be implemented across the enterprise.Control points are established where actual costs are collected and variances analyzed. • Revision Control . The best method to protect your organization and employees from criminal prosecution is a combination of earned value management and statistical forecasting software.As the project progresses. forward-looking. A schedule is created and budget is assigned to individual tasks. • Measuring Performance . The process can be summarized as follows: • Scope Deﬁnition . and forecast are updated to reﬂect the current scope. we implemented the process on other contracts. Companies which rely only on spreadsheets for project forecasting are in greater danger of noncompliance and criminal litigation. “EVMS was such a major success on one defense contract. and more aware of its business performance.Comprised of the statement of work (SOW) and the work breakdown structure (WBS). our organization has moved away from a ‘blame culture’ to one that is open. Variances from the budget are analyzed and corrective actions are considered. budget. Project performance-to-date is used to analyze forecasted costs.” says David Chard of BAE Systems.As changes to the project occur. A control account manager (CAM) is assigned to manage each unit of work. leading to mistakes • There are no audit trails made to values such as authorized-for-expenditure (AFE) or scope changes • There is no security on the spreadsheet preventing unauthorized persons from changing values ® 5 . The SOW identiﬁes the scope requirements for a project and is used as a basis for the schedule and budget. Since implementing EVMS over ﬁve years ago. project management. the schedule. Earned value management is basic. Earned Value Management Software Spreadsheets alone are insufﬁcient legal documentation proving your organization uses best practices. BearingPoint found the following deﬁciencies for project controls systems that use Microsoft Excel® as their reporting/controlling software when validating publicly traded companies for SOX section 404 compliance: • There is no integration with ERP or accounting functions and data has to be re-keyed. • Document the Process . The WBS is used to break down the work into deﬁnable product elements and is used as a rollup reporting tool.
But if you have only completed $5 million dollars worth of work. Fehr.” says Steven P. and resources performing the work can help project managers in this effort. if your project’s budget is $10 million dollars. this could reduce the proﬁt margin on the project and. Assuming the total project cost will be the same as the original estimate is not an acceptable practice. then your project has a $4 million overrun of costs. company ofﬁcials could be held criminally liable. Evaluating your projects with earned value management principles in addition to forecasting software may help determine whether a cost overrun is a “material” ﬁnancial issue as deﬁned by SOX. Factors including a better understanding of the project scope. or “EAC”). ® 6 . and you have spent $9 million dollars. complexity. For example. How is it possible for them to feel conﬁdent they have the most accurate information regarding all of their project? Measuring the health of projects by comparing a budget to actual costs without project status or earned value may misrepresent how well your projects are performing.• It is too easy to have an error in a formula • Rates and burden buildups such as overhead costs should be stored in a separate table and referenced by the project data so that it can be easily veriﬁed “Project controls and understanding the true state of a project can change a company’s bottom line and is thus part of SOX section 404. the project is behind schedule and the completed work costs much more than originally planned. Therefore. If this is the case. based on the terms of SOX. statistical forecasting software should perform the following tasks: • Understand the true health of your project • Determine accurate project completion costs • Lend evidence and credibility to a forecast Understand the true health of your project Project managers often own responsibility for large projects. you appear under your target budget. Vice President of BearingPoint. Determine accurate project completion costs Once a project is underway. it is important for all project managers to regularly reassess the cost-to-complete as accurately as possible and use trend analysis to verify their estimates. To reduce legal liability. it is the ﬁduciary responsibility of the project manager to continually improve the accuracy of the total project cost (also known as estimate at completion.
Dividing the remaining budget by the CPI of 0.85 means that for every dollar of budget. The resulting value is the cost performance index (CPI).85 provides a cost estimate which reﬂects a more realistic scenario (where the performance-to-date is assumed to continue until the end of the project). Without earned value. For example. complex projects. Figure 2 shows the Schedule Variance (SV) .0 reﬂects unfavorable performance. project managers announce. They may provide early warning signs of project overruns and can be used to evaluate the accuracy of a manually entered EAC.the difference between the earned value and the budget . a performance factor should be applied to the remaining work in order to properly project the ﬁnal cost. If the project costs-to-date are higher than budgeted.Budget Earned Value Budget SV CV COST COST Actual Cost Actual Cost TIME Figure 1 Figure 2 TIME Figure 1 shows actual costs as less than budgeted. looking at the baseline plan from the current time through completion will be misleading. Unless there is an appropriate explanation how this improved performance can be achieved. only 85¢ worth of work is completed. However.85 dollars worth of work is completed.” Since statistics prove that few projects do make it up. The schedule performance index (SPI) is a similar index which is calculated by dividing the earned value by the budget.and the Cost Variance (CV) . Statistical forecasts created using indices like the CPI and SPI allow for very accurate forecasts because they consider both project status and past performance. since it represents improved performance. but I’m going to make it up. Lend evidence and credibility to a forecast People tend to be optimistic. this method is time-consuming. Oftentimes. Statistical forecasts are more practical for calculating completion costs because they use past project performance to estimate future project costs. An SPI of 0. A CPI of less than 1. The most accurate method to determine project cost-at-completion is thoroughly re-evaluating the remaining work and compensating for the performance-to-date of the project.85 means that for every dollar spent. only 0. it is impossible to tell if the actual costs are less because work is progressing at a slower rate than planned or if the actual costs are really less than what is budgeted.the difference between the earned value and the actual costs. There are a number of methods which can be used to determine the project cost-at-completion. a CPI of 0. Average performance-to-date is calculated by dividing the cumulative earned value by the cumulative actual costs. including re-evaluation of the remaining work and usage of statistical forecasts. “I know the project has been over running in costs to-date. especially on large. how can project managers and senior management feel conﬁdent in ® 7 .
the TCPI should be very similar to the CPI achieved to date.1% to 0.03% of total revenue on SOX-related activities in the next 12 months. Since the CPI of a project rarely improves once the project is greater than 20% complete. the TCPI of a project should be compared to the CPI of the project todate. For a $5 billion company. business process change. the cumulative CPI does not signiﬁcantly improve during the period between 15% and 85% of contract performance. but you can identify what issue caused poor performance early enough to have the opportunity to change the outcome. conglomerates with widely different and independent business units have budgeted for up to 0. EVMS helps you reduce risk in a project’s outcome. While most companies reported they would spend an average of 0. it tends to decline. It may not bring the project in on time. It indicates the level of performance which must be achieved to reach a particular estimate at completion. in fact. Combining EVMS principles and performance indicators provides you early warning signals. To validate a given forecast. You can standardize the way projects are managed and reduce the likelihood of inaccurate information by using EVMS software.2 In fact. “Nearly 77% of companies will spend more on IT.3 Studies show that EACs based on both the CPI and the SPI tend to be signiﬁcantly higher and are generally more accurate.2% of total revenue. which allow you to apply effective corrective action. results show that the average EAC based on the cumulative CPI was the lower end of the average [actual] cost at completion.4 Conclusion No methodology or process will make projects proﬁtable overnight. corporate governance. It is used to gain conﬁdence in the reported forecast for the remaining work.project forecasts? The to complete performance index (TCPI) is the ratio of the remaining work to the remaining cost. Removing the formulas from Excel spreadsheets and preventing each project from being managed as an island. you can transform your project management ofﬁce from a cost center into a competitive advantage! ® 8 . without exception. A TCPI that is greater than the CPI shows an improvement in performance and means that the forecast is not probable. Senior management should have conﬁdence in a forecast where the TCPI is close to the value of the CPI. and consulting this year as a direct result of SOX compliance. “ AMR Research1 The Department of Defense’s experience in more than 400 programs since 1977 indicates that. that equates to $5M to $10M in incremental spending.
December 16-17. email info@deltek. May 06. Ph. Ms. Ms.. procurement and materials management and project management.. government requirements and implementation techniques.deltek. “CFOs Say It’s All About Process and Internal Controls” AMR Research Report. HOK and Verizon.deltek.000 customers worldwide. Report to the Secretary of the Navy.Author Ruthanne Schulte has been employed with Deltek since 1990. Deltek clients and project management professionals rely on her expert advice relating to the importance of managing project costs. CACI. 9 . All referenced trademarks are the property of their respective owners.456. All rights reserved. Inc.D. and forecasts. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. business intelligence. Directorship.2009. Kaplan. Schulte earned a BS in Civil Engineering from Texas A&M University. Schulte is a highly sought speaker on earned value management and has published numerous articles and white papers. visit our Web site at www. and analyzing budgets. A-12 Administrative Inquiry. measuring earned value.com or call 800. Resources 1 Lindsey Sodano. integrating all aspects of their businesses. Jr.734. Boston. CRM and proposal automation.. About Deltek With more than 11. HR management. Project Advocacy and the Estimate at Completion Problem.456. Priest. John Hagerty. Beach. visit www. Boston. VA 20171 © 2006 Deltek Systems. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting. resource planning. ® For more information about Deltek and our solutions. J. She currently serves as Product Director of Deltek Cobra™. billing. and S. the leading EVMS solution. budgeting and control. Chester Paul. Deltek Costpoint®. Christensen. Journal of Cost Analysis Spring 1996. Washington DC: Department of the Navy. “CIOs: There Is a Sarbanes-Oxley Project in Your Future--Do You Know What It Is?” AMR Research Report.2009 or 703. Herndon. Ms. MA: AMR Research Inc. Herndon. 2003.com US & Canada: 800. March 21. Sarbanes-Oxley Act of 2002. Prior to joining Deltek.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. Deltek enables companies to maximize proﬁtability and productivity. actuals.com. David S. Deltek’s clients include Bechtel. Schulte held the position of Design Engineer with the Texas State Department of Highways. John Hagerty. 1990. MA: AMR Research Inc. During that time she developed schedules and performed manpower studies based on multi-project resource scheduling. 2003. Founded in 1983. 2002. 2 3 4 For more information about Deltek. “Encouraging Whistle Blowing: The Audit Committee’s new job”. employee time and expense. She has extensive experience in EVMS.
and speak about the likelihood of failure BEFORE it actually occurs or we run out of budget.® What is the Health of my Project? The Use and Beneﬁts of Earned Value How’s My Project Doing? We all know about the three monkeys: See No Evil. no. budgetconscious 21st century. medium. In a Standish Group study of software projects in both the public and private sectors. hear about the risks. our goals are to control our projects. When faced with a new project. with the average overrun being 222% of the original time estimate (Chaos 1995). nearly 90% of the studied projects failed due to cost and time overruns. Budget versus actual costs. However. Over one third of all the companies in the study reported time overruns of 200-300%. Overall. yet can they alone describe the real health of a project? In a word. Failure records like these can be interpreted to mean that project management tools and techniques are not being effectively used and applied. and large companies studied experienced cost overruns of 150-200%. These factors have been used to manage projects in the past. with project costs coming in with an average overrun of 189% of the original cost estimate. and avoid any cost overruns. We need to see the potential for cost overruns. Nearly one third of the small. We certainly don’t want history to repeat itself. Project ahead of schedule versus project behind schedule. Its principles were set down as Cost/Schedule Control Systems Criteria in the DoD’s ﬁnancial management orders in 1967. An earned value management tool is a valuable partner when determining the answers to these and many other questions about the ongoing state of a project. we want it to be successful. In addition. Being told not to worry versus spending sleepless nights worrying. Earned value ﬁlls the need when project success and the success of the company hang in the balance in this fast-paced. and we want an early warning system to let us know when problems arise before it is too late to resolve the problem. Need a Solution? Earned Value to the Rescue! Failed and challenged projects alone cost US companies and government agencies an estimated $145 billion per year. so we’re in search of a solution that can help. time overruns experienced similar difﬁculties. more than 33% were cancelled before they ever came to completion. we must ignore the advice of the three monkeys. and Speak No Evil. failed and challenged projects alone cost US companies and government agencies an estimated $145 billion per year. Likewise. In order to do this. As project managers. Hear No Evil. Who Uses Earned Value Management? Earned Value Management (EVM) is a methodology that has been in use since the 1960s when the US Department of Defense adopted it as a standard method of measuring project performance. be sure they come in on budget. We’ve heard all the horror stories about cost overruns. the 10 .
and forecasts. The processes include integration of program scope. corrective actions. In August of 1999. signed a memorandum announcing that the Department of Defense had adopted the ANSI EVMS Standard for use on defense acquisitions. Dr. Why Use Earned Value? Have you ever asked yourself any of these questions? • My actual costs are less than my budget. or is it behind schedule? • My project’s actual costs are now higher than budgeted. The EVMS guidelines incorporate best business practices for program management systems that have proven to provide strong beneﬁts for program or enterprise planning and control. and use of earned value techniques for performance measurement during the execution of a program. or is it behind schedule? Earned value is a means of placing a dollar value on project status. Jack Gansler. USD(A&T). it is impossible to tell if the actual costs are less because work is progressing at a slower rate than planned or if the actual costs are really less than what is budgeted. establishment of a baseline plan for accomplishment of program objectives. Is my project doing well. then earned value is a tool you should seriously consider using to determine your project’s health. this might appear as if the project is doing very well. This allows you to compare budget versus actual costs versus project status in dollar amounts. The system provides a sound basis for problem identiﬁcation. if the project spending is 10% under budget. schedule and cost objectives. All four are needed to obtain a true picture of the project’s health. For example. and the project is only halfway complete. when the project status or earned value is added to the analysis. actual costs. However. If you analyze only the budget versus actual costs. earned value. What’s it likely to cost at completion? • My project manager or engineer keeps telling me not to worry about the cost overruns. it may then show that only half of the originally planned work has been performed. The rest of the work will cost less than budgeted. COST Actual Cost My actual costs are less than my budget. an incorrect representation often results. If so. How is Earned Value calculated? Earned value may be deﬁned as the sum of the budgets for ® 11 .idea has actually been in existence since the 1800s when industrial engineers wanted a way to measure performance on the factory ﬂoor. Is this probable? • Do I have the necessary staff for this new contract? • Will labor rate and currency exchange rate ﬂuctuations affect my project’s costs? • How will funding cuts affect my cash ﬂow? Budget • Is price or usage causing my cost variance? If you’ve asked yourself these questions. Budget Earned Value SV CV COST Actual Cost TIME Figure 2 shows the schedule variance (SV) – the difference between the earned value and the budget – and the cost variance (CV) – the difference between the earned value and the actual costs. Without earned value. Proper analysis of a project requires four major items: budget. Is my project doing well. and the completed work costs much more than originally planned! TIME Figure 1 shows actual costs as less than budgeted. we have a project that is behind schedule. and management replanning that may be required (Gansler 1999).
A CPI that is less than one reﬂects unfavorable performance. Most projects contain at least some work that is regarded as inherently immeasurable. Statistical forecasts (forecasts that are created using such indices as the cost performance index) can give early warning signs of project overruns and can be used to evaluate the accuracy of a manually entered estimate at complete. My project’s actual costs are now higher than budgeted. Basically. These methods are often called earned value methodologies or performance measurement techniques (PMT). ® 12 . For example. in fact. If project costs to date are higher than budgeted. then the value is earned. Simply using the remaining budget may be misleading. the earned value is zero. a CPI of 0. The Department of Defense’s experience in more than 400 programs since 1977 indicates that without exception the cumulative cost performance index (CPI) does not signiﬁcantly improve during the period between the 15% and the 85% of contract performance. What’s it likely to cost at completion? There are a number of methods that you can use to arrive at an answer to this question: • Reevaluating the remaining work • Using the remaining budget • Using statistical forecasts The most accurate method is to thoroughly reevaluate the remaining work in the schedule to determine a new estimate-to-complete for the remaining work. earned value for completed activities is equal to the total budget. a performance factor should be applied to the remaining work in order to properly project the ﬁnal cost. For activities not yet begun. Therefore. you must come up with a system of measurement that includes objective judgments. as long as the task is performed. only 0. Average performance-to-date is calculated by dividing the cumulative earned value by the cumulative actual costs.the work that is complete.85 means that for every dollar being spent. using the baseline plan from the current time to completion will be misleading as it would represent improved performance. The basic theory behind all of the methodologies is to multiply the budget by a percentage complete to get the earned value. Unless there is an appropriate explanation as to how this improved performance can be achieved. and the project is only halfway complete.85 dollars worth of work is being done. The resulting value is called the CPI. In order to measure the performance of activities in progress. this method is often too labor-intensive to be justiﬁed.85 provides a cost estimate that reﬂects a condition where the performance-to-date is assumed to continue to the end of the project. This type of task is sometimes referred to as “level of effort” since its earned value is assumed to be the same as the amount budgeted. Dividing the remaining budget by the CPI of 0. However. it tends to decline (Beach 1990). An example of this is the work performed by a project manager or a quality control inspector. The Earned Value Management System (EVMS) guidelines give a number of alternative methods for measuring the earned value of an activity in progress.
Other common index-based EACs that are found to be higher are more accurate.7 Therefore. and most likely forecasts for client reporting.7 Figure 3 The “to-go effort” or estimate-to-complete (ETC) is multiplied by I/CPI. the total estimate at complete (EAC) is $125. According to some authors. Multiple forecasts facilitate efﬁcient project management because they provide an early warning of probable project overruns. These may be the same set as above.636 x 45 = $70. COST ® 13 . studies show EACs based on both the CPI and the schedule performance index (SPI) tend to be signiﬁcantly higher and are generally more accurate (Christensen 1996). Is this probable? Despite the widely known fact that the recoveries from cost overruns on defense contracts are extremely rare. My project manager or engineer keeps telling me not to worry about the cost overruns. The rest of the work will cost less than budgeted. pessimistic. results show that the average EAC based on the cumulative CPI was the lower end of the average cost at completion (Christensen 1996). or they may be Best Case more optimistic as an incentive towards more rigorous management. you can develop forecasts that are very accurate because they take into account both project status and past cost performance.7k TIME ETC = 1/CPI x (BAC-EV) In fact. Worst Case • Internal forecasts that are used by the project Most Likely Case managers to manage the contract and report internally. determining the most accurate estimate has never been the objective of the contractor (Fox 1974) (Mayer 1991). even if that means understating the projected completion cost (Christensen 1996). ETC = 80-35 = $45k Actual cost = 55 COST Budget at complete = 80 Budget to date = 45 Earned value = 35 CPI = earned value/actual cost = 35/55 = 0.636 ETC = 1/0. Using indicators such as the CPI and SPI. detailed forecast: • A set of optimistic. TIME • Multiple forecasts based on the effects of future rate changes. the objective has been to protect the project and the careers of its managers. pessimistic.Estimate at complete = 125. In particular. The following are the typical forecasts that should be maintained for an accurate. Instead. analysis of 64 completed contracts shows that the ﬁnal cost overruns estimated by the contractor were less than the current cost overruns (Christensen 1993). Figure 4 shows the optimistic. • Several different statistical forecasts to increase conﬁdence in the manually entered forecasts. and most likely forecasts plotted on a single graph.
or equivalent stafﬁng units. FTE = Hours required for a particular task x 1 # of working hours in a particular month The number of working hours per month should include a productivity factor to determine accurate stafﬁng requirements. TCPI = budget . If the stafﬁng requirements for a project have been overrunning to date. are commonly used instead of hours to project stafﬁng requirements. only 80% of that person’s time is actually spent on the project. Since the CPI of a project rarely improves once the project is greater than 20% complete. It indicates the level of performance that you must achieve to reach a particular estimate at complete. It is also known as the CPI to EAC index as it is the CPI that is required to meet a particular EAC. and people are frequently less productive during those times.actual cost The TCPI should be compared to the CPI of the project to date. The to complete performance index (TCPI) is the ratio of the remaining work to the remaining cost. after this point is reached. the TCPI should not be higher than the CPI. including level of effort activities. The productivity factor will be one if 100% of the working hours are billed to a speciﬁc project. and times of year. The TCPI will help you examine the probability of the project costs matching a particular forecast. project performance seldom improves. To Complete Performance Index The TCPI is an index used to rate the probability of a forecast. In addition. When analyzing stafﬁng requirements you need to make sure that all activities. shows an improvement in the performance and means that the EAC used in the formula is not probable. performance seldom exceeds the average performance-to-date and often deteriorates. A TCPI that is greater than the CPI. a person with both resource management and project management responsibilities often spends a certain amount of time performing human resource activities and may.earned value estimate at complete . an accurate FTE calculation should include a lower productivity factor. On the other hand. therefore. are considered. have a lower productivity rate. there are also efﬁciency factors dependent on past performance that can be applied to the stafﬁng requirement for the remaining work.Upon reaching the 15% stage of completion. For example. most countries have holidays during certain times of the year. In this case. using the baseline plan from the current time to completion implies an expectation that stafﬁng performance will improve. Along with productivity factors based on the season and personnel. the CPI expressed in hours or FTEs can be applied to the remaining work to predict a more probable stafﬁng requirement for the remainder of the project. Do I have the necessary staff for this new contract? Full Time Equivalents (FTE). To countermand this expectation. You need to provide for different productivity rates per resource and per month in order to determine an accurate stafﬁng requirement based on the hours ® 14 . As a matter of fact. The productivity factor might be different for various personnel. if 20% of an employee’s time is spent on nonbillable activities like attending meetings and ﬁlling out time cards. locations.
Your forecasted rates should change with the economy. By using multiple “what-if” scenarios. You can then produce reports that show the baseline. You need to make sure that your forecast is not using the same rates used when the baseline was created. you will be able to analyze the effects of expected changes by setting up different forecasts using the various labor rates or exchange rates. What is causing my cost variance? Many conditions cause cost variances. It will allow you to use different sets of rates for each of your forecasts and to calculate foreign currencies as well. Today’s competitive market requires that you manage challenges such as funding cuts. and funding.required to complete a project. If your contract requires you to earn value based on the original baseline . a good EVM software package can easily and effectively allow you to analyze the effects of all types of challenges presented to today’s project managers. Since cost of living adjustments are difﬁcult to predict. ® 15 . it is helpful to have all rate escalations deﬁned in a single rate set. it is important that you are able to compare budget. This way you can deﬁne all labor rates as today’s rate and change the labor rate escalation for all resources in a single place. and the funding. With the ability to report on multiple forecasts simultaneously. you compare the earned rate to the actual rate and the budgeted hours to the actual hours. You are trying to make your actual costs and associated funding curves match. your contract may not allow you to change the baseline. This type of rate analysis can also be beneﬁcial when dealing with currency exchange rates. This will ensure that your ﬁnal project costs accurately reﬂect the current environment.you need to copy the budget and globally factor costs using pricing functions. Finally. you will need to modify your spending. the actual costs. when you examine variances. Worst Case Most Likely Case COST Best Case TIME Figure 5 shows how the actual costs reﬂect the funding. Will labor rate and currency exchange rate ﬂuctuations affect my project’s cost? Rate ﬂuctuations will affect the ﬁnal project cost. To accomplish this analysis. make sure that your forecasts can be expressed in FTEs to show the projected stafﬁng requirements. however. actual costs. How will funding cuts affect my cash ﬂow? When analyzing a project. However. If your funding is reduced. You need to ask yourself if your project is taking more resources to do the work than you originally planned or if the resources are more expensive than planned. Therefore. The derived costs associated with earned value are not calculated using a rate ﬁle but by earning the budget hours and associated derived costs. The ﬁnal outcome is the ability to store and report on both the original baseline and the funding. the earned value rate and the budgeted rate are most likely the same.not the funding . you should be analyzing earned versus actual as opposed to budgeted versus actual.
Multiplying the remaining effort by 1/(CPI*SPI) is a good means of projecting the ﬁnal cost. the to-go labor rate is compared with the budgeted rate by calculating the to-go labor rate as follows: To-go labor rate = ETC (labor dollars) ETC (hours) In addition to rate variance. It is much easier ® 16 . it is important to determine what is causing the variance. We want to be prepared for all eventualities. Rate variances are compensated for in a forecast by changing the to-go labor rate for your forecast. you might earn 100 hours and there are 100 actual hours.and do . Earned value places schedule status in dollar amounts for proper project analysis. Efﬁciency variance is calculated as follows: Eff. Conclusion In today’s competitive marketplace. Is it a rate variance or an efﬁciency variance? In addition to simply changing the ﬁnal project cost. An efﬁciency variance is compensated for in a forecast by using statistical forecast methods based on previous performance. Budget versus actual cost is not enough information to properly analyze project performance. but there are 120 actual hours.Actual rate) x Actual hours To calculate an earned rate. and mouths covered about problems such as cost overruns and schedule delays that can .For example. An example of an efﬁciency variance is when you budget and earn 100 hours. there is an efﬁciency variance. then you have a rate variance as opposed to an efﬁciency variance. Earned value gives you the early warning you need to solve problems while the work is in progress before the actual costs are above the total budget. the following formula is used: Earned rate = EV dollars EV hours An actual rate is calculated by looking at the posted quantities: Actual rate = Actual dollars Actual hours A positive rate variance indicates that the actual rate is less than the earned rate. the work being performed should be investigated to see if there are any means of improving the situation. ears.inevitably rear their ugly heads. If you are given an estimate to complete (ETC). Variance = (Earned quantity . there is no time for games. If your actual cost is much higher than the earned value. We don’t want to monkey around keeping our eyes. Whether the contract is several months or several years in length. the ability to deliver a project on time and within the agreed upon budget is imperative.Actual quantity) x Earned price Any time that a cost variance is incurred during a project. and earned value gives us the early warning signs needed to accomplish our goals. The rate variance is calculated using the following formula: Rate variance = (Earned rate .
Therefore.to compare budgeted dollars to earned dollars than to compare budgeted dollars to a subjective percent complete of the entire project. • The schedule performance index provides an early warning signal. schedule. • It integrates work. Evaluating an EVMS When evaluating earned value management software. an earned value management software system is the best place to retrieve valuable information needed for reliable analysis of your project’s health. It is this comparison that gives early warning signs to the project’s health before the actual costs are above the total budget. Make sure you ask the vendor the following questions: • Does this software integrate with my scheduling software? • Does this software support multiple performance measurement techniques that allow me to objectively measure performance on my activities? • Is there a clear distinction between a baseline and a forecast in the system? • Can I maintain and report on multiple. and can it be adjusted for all resources in a single place? • Does this software calculate statistical forecasts based on past performance? • Does this software support different productivity rates per resource and per month when calculating FTE? • Does this software calculate forecasted FTE based on past performance? • Does this software allow me to enter and report on funding? • Does this software contain pricing functions that allow me to globally adjust costs? • Are earned and actual hours stored in the system in a manner that allows me to calculate price and usage variances? • Is the result of the earned value calculations stored time-phased? This will keep my earned value in previous periods from changing if the budget changes. The following is the list of beneﬁts for using an earned value management system: • It is a single management control system that provides reliable data.g. Ten Beneﬁts of EVMS David Christensen’s The Cost and Beneﬁts of the Earned Value Management Process is an interesting paper that weighs the cost of implementing earned value versus the beneﬁts. • The CPI is a predictor of the ﬁnal cost of the project. we can continue to work towards the improved management of those projects and greater business success as we move through the 21st century. • The associated database of completed projects is useful for comparative analysis. we can identify. This way. address. • The “management by exception” principle can reduce information overload. you want to make sure that the software product contains the functionality required to answer the questions outlined in this paper. • The “to-complete” performance index allows evaluation of the forecasted ﬁnal cost. • The periodic (e. We continue to work at a breakneck pace in order to satisfy our customers and remain competitive. By using earned value throughout our projects. ® 17 . and cost into a work breakdown structure. • The cumulative cost performance index (CPI) provides an early warning signal. • EVMS uses an index-based method to forecast the ﬁnal cost of the project. and resolve problems early. weekly or monthly) CPI is a benchmark. Our companies undoubtedly live and die by the success and failure of the projects we so carefully nurture. time-phased forecasts? • Can each forecast use a separate set of rates to perform “what-if” analysis? • Can I calculate foreign currencies? • Can rate escalation be stored separately from the base rate.
com US & Canada: 800.D. Mass: Harvard University.mil/pubs/arq/98arq/chrisevm. HOK and Verizon. During that time she developed schedules and performed manpower studies based on multi-project resource scheduling.1995. visit our Web site at www..” <http://www.2009 or 703. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. resource planning. 1991. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting. The Standish Group International. Mayer.000 customers worldwide. David S. Prior to joining Deltek. She currently serves as Product Director of Deltek Cobra™.Author Ruthanne Schulte has been employed with Deltek since 1990. Kenneth R. Boston.. 18 . Chester Paul.. Schulte earned a BS in Civil Engineering from Texas A&M University. “New ANSI Standard on EVMS Guidelines. measuring earned value. CACI. employee time and expense. and analyzing budgets. Herndon. Deltek enables companies to maximize proﬁtability and productivity. J. Project Advocacy and the Estimate at Completion Problem. integrating all aspects of their businesses. Published.acq. Founded in 1983.D. The Political Economy of Defense Contracting. David S.734. Washington DC: Department of the Navy. Inc. and forecasts.deltek. 1974. Journal of Cost Analysis Spring 1996. Jr. actuals. the leading EVMS solution.pdf> (Fall 1998). business intelligence.dau. David S. Report to the Secretary of the Navy. billing. CT: META Consulting Group. 2000. Fox. Herndon. A-12 Administrative Inquiry. 1990. ANSI/EIA-748-1998. All rights reserved.456. Christensen. Schulte held the position of Design Engineer with the Texas State Department of Highways..mil/pm/newpolicy/indus/ansi_announce. Arming America: How the US Buys Weapons. Deltek clients and project management professionals rely on her expert advice relating to the importance of managing project costs.osd. “The Cost and Beneﬁts of the Earned Value Management Process. CT: Yale University. New Haven. Ph. VA 20171 © 2006 Deltek Systems. All referenced trademarks are the property of their respective owners. Ms. Ms. CRM and proposal automation.html> (17 October 1999). About Deltek With more than 11.” <http://www. Christensen. Jack. Resources Beach. She has extensive experience in EVMS. procurement and materials management and project management. Inc.Fact or Fiction?” Acquisition Review Quarterly March 1993. Gansler. Ph. Ph. government requirements and implementation techniques. Deltek’s clients include Bechtel.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. Schulte is a highly sought speaker on earned value management and has published numerous articles and white papers. Christensen.D. Roldan. Deltek Costpoint®. “Cost Overrun Optimism . Ms. ® For more information about Deltek and our solutions. Project Management: Why Do We Need It and What is It? Stamford. HR management. Chaos. Cooley.. Kevin. budgeting and control.
The system described in the standard provides a sound basis for problem identiﬁcation. This process discussion of the ANSI standard provides further information on how to apply guidelines in the ANSI standard on EVMS. Codes on the control account let you identify items such as a Cost Account Manager (CAM) or a customer WBS. EVMS Process Discussion Cobra is designed to simplify the EVMS process throughout a program’s lifecycle. Cobra is designed to be the application that supports the EVMS process. and the calculations that deﬁne how they are applied. planning accounts. Scope deﬁnition – Cobra supports the two main components of scope deﬁnition through all of the components of a WBS Dictionary – the Statement of Work (SOW) and the Work Breakdown Structure (WBS). . step-by-step instructions. 19 Deltek Cobra is designed to simplify the EVMS process throughout a program’s lifecycle. work authorization. rates. taking you through each project phase in simple. Program Deﬁnition Cobra lets you structure program data in a way that is both easy to maintain and compliant with the standard. Program Organization – Cobra supports the traditional control account deﬁnition of the intersection of WBS and Organizational Breakdown Structure (OBS). The Cobra user’s guide follows these steps and offers best practice advice on each of the major processes throughout the project lifecycle. These rates. and much more. It also calls for the establishment of a baseline plan to accomplish program objectives and use of earned value techniques to measure performance during project execution. The Integration Wizard lets you easily create your budget and update status from your schedule without dual data entry. Using batch processing. The Cobra user’s guide offers best practice tips and examples for deﬁning resources. Cobra can automatically load labor and burden rates to maintain accuracy and consistency with your ﬁnancial systems. schedule. The process guide contained in this standard includes project scope deﬁnition. management reserve. and cost objectives. and change control. corrective actions. Budgeting – Resources are assigned to the activities in the schedule. are secured in Cobra and applied when hours from the schedule are loaded to a cost or budget for the program.® How Deltek Cobra™ Helps Satisfy the Requirements of the ANSI/EIA-748 Standard on EVMS Introduction Earned Value Management System (EVMS) guidelines incorporate best business practices that have proven to provide strong beneﬁts for program or enterprise planning and control.
Performance Analysis/Exception Reports – Earned value analysis helps you identify problems early in the project. It is used to determine the “health” of your project. analysis of planned units versus material usage is important for projects with ongoing production requirements. Estimates at Completion Cobra has the most powerful and ﬂexible forecasting functions on the market. These options let you deﬁne how you want to implement the standard based on your company’s requirements. which means the budget for a period can be compared to the earned value for the same period to determine the schedule variance. Is something costing more because it took longer than planned. Performance Measurement Earned value directly measures the quantity of work completed and does not reﬂect the quality or technical content. Revisions and Data Maintenance Change control is critical to baseline management.A work package is simply a task – a point where work is planned. In order to calculate earned value. Cobra provides an easy. This analysis lets you generate statistical forecasts based on past performance or change the forecasted rate to generate an Estimate at Complete (EAC). you can identify problem areas very early and take steps to resolve the situation or modify your forecast to reﬂect the outcome more accurately. which is an efﬁcient way to manage a contract. This is a measure of the costs incurred to perform the work accomplished. Cobra provides reports which isolate rate variances versus hourly variances. you compare the actual cost with the earned value for a particular period. Earned value analysis lets you compare the budgeted value of completed work to the actual costs. This method allows you to quickly identify and direct energy to portions of the project that are experiencing difﬁculties. and planning package budget as well as any undistributed budget. work package. progress is measured. Cobra provides a broad selection of reports to analyze the different metrics used in performance measurement. work packages are deﬁned. All the earned value techniques described in the ANSI standard are available as well as many more requested by Cobra customers. Critical path analysis and budget versus actual costs comparison do not always provide a clear picture of this concept. or is it because the labor rate is higher? Price/Usage Analysis – Similar to the rate analysis on labor. and an earned value technique is assigned to each work package. making it possible to apply corrective action. It represents the value of the work that is ahead or behind schedule. ﬂexible way to control and automatically log changes to the baseline. You can maintain both customer forecasts and multiple internal forecasts at the same time. and only authorized changes may be introduced. Cobra also supports different implementations of the work package deﬁnition by allowing you to load one or many schedule activities into a work package and by allowing you to collect actual costs at either the control account or work package level. Cost Performance – To calculate the cost variance. Cobra supports management by exception. This lets you update customer EAC values in a controlled method while conducting statistical forecast and giving control account mangers a logical place to perform bottom-up forecasts. Using earned value. Schedule Performance – Cobra stores all data time-phased. The performance measurement baseline must reﬂect the current project objectives. Cobra ® 20 . and earned value is calculated. Cobra’s performance measurement baseline consists of time-phased control account.
Prior to joining Deltek. Deltek enables companies to maximize email info@deltek. procurement and materials management and project management. visit our Web site at www. 21 .com US & Canada: 800. Founded in 1983.734. For more information ® For more information about Deltek and our solutions. and forecasts. Ms. HR management. and analyzing budgets. Inc. and your changes are automatically logged for CPR 3 (changes to the baseline) reporting. CACI. She currently serves as Product Director of Deltek Cobra™. Deltek clients and project management professionals rely on her expert advice relating to the importance of managing project costs. She has extensive experience in EVMS.2009 or 703. Once in Cobra. measuring earned value. Schulte earned a BS in Civil Engineering from Texas A&M University. government requirements and implementation techniques. employee time and expense. Ms. Deltek Costpoint®. HOK and Verizon. All rights reserved. resource planning.000 customers worldwide.456. Author Ruthanne Schulte has been employed with Deltek since 1990. Cobra is the earned value system used in the system description for many large defense contractors.456. about Deltek. billing. visit VA-based Deltek is the leading provider of enterprise www. you simply mark that particular budget data part of the baseline. Deltek Vision® and Deltek GCS Premier® power a myriad of front. integrating all aspects of or call 800. When you have approval for a particular change.and backofﬁce applications including accounting. Ms. their businesses.deltek. CRM and proposal automation.deltek.com proﬁtability and productivity. During that time she developed schedules and performed manpower studies based on multi-project resource scheduling.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. the leading EVMS solution. Schulte is a highly sought speaker on earned value management and has published numerous articles and white papers.com. management software for project-focused organizations. you should document your policies and procedures so the processes may be implemented and applied effectively throughout your company. System Documentation Once your company has established a method for proper earned value analysis. VA 20171 © 2006 Deltek Systems. business intelligence.provides an efﬁcient means of loading proposed baseline changes from the schedule. Herndon. Herndon. actuals. All referenced trademarks are the property of their respective owners. you can produce reports showing the affects of multiple changes in the system at one time and continue to produce customer reports with only the approved baseline. About Deltek With more than 11. Schulte held the position of Design Engineer with the Texas State Department of Highways.2009. budgeting and control. Deltek’s clients include Bechtel.
Case Stories 22 .
GDLS has held several major defense contracts for manufacturing LAVs. government’s a powerful yet ﬂexible pricing solution compatible with Open Plan. calendars. Since the early 1990s. GDLS hired three new team members who had used Open Plan with a former employer. Cobra and ancillary data housed on the network. The only problem was that the existing pricing package proved cumbersome compliant with the when it came to transferring Open Plan baseline and status information. GDLS used a homegrown cost reporting solution that relied upon a relational database to incorporate budget. Their positive experiences with Open Plan became the basis for evaluating. and the existing tools – low-end scheduling and spreadsheet software – proved to be inadequate. Not many software packages would be up to the task. comprehensive software package that was fully capable of supporting the size and complexity of its defense operations projects. but GDLS had no system to develop a resource loaded schedule for baseline proposal data. code ﬁles. supported high-end comprehensive package fully capable of supporting the size and complexity of GDLS EVMS capabilities projects. requirements for cost and performance tracking. and report templates as well as shared project Like Open Plan. Because of hardware limitations and complex interfaces with cost systems. With its shared resource pools. and ultimately implementing the system.S.® General Dynamics Land Systems (GDLS) Deltek puts GDLS on the Road to True Cost and Schedule Integration Deltek enhanced its ability to provide critical earned value management (EVM) offerings to its broad project-focused customer base with the acquisition of Welcom in March 2006. While searching for the scheduling solution. Deltek Open Plan™ and Deltek Cobra™ were chosen so General Dynamics Land Systems could achieve the goal of automating their entire project management system. Each has required considerable effort in the proposal development phase. Overview General Dynamics Land Systems (GDLS) needed a highly integrated. GDLS needed U. Reporting was limited to work 23 . Open Plan proved to be a highly integrated. high-end pricing package that consolidated data into one database solved part of the problem. The Need Manufacturing Light Armored Vehicles (LAV) for governments around the world is serious business that demands powerful scheduling and cost management software. status. but it required constant troubleshooting. That system proved adequate for a few years. and actual cost data. but the leading global producer of LAVs – GDLS – chose Open Plan to manage its defense operations projects. Deltek’s products gave General Dynamics Land Systems the tools it needed to eventually achieve true cost and schedule integration. A new.
S. we can then ﬁlter and manipulate the data into formats suitable for distribution to various team members and management. but eventually a baseline budgeted cost of work scheduled is established. which can be modeled in parallel with BID entries.” explains Janice Floody.” Sometimes the process involves several phases of corrections and negotiations. Once the work breakdown structure and cost class breakouts are deﬁned according to program requirements. “So we translated Open Plan data to separate the cost accounts before loading them into Cobra. Previously. Ontario. and other direct cost estimates. travel. pricing links to the data. Diesel Division General Dynamics Land Systems When the basis of estimates are complete and reviewed. and the software lacked forecasting capability beyond manual estimates. The Beneﬁt GDLS began using Deltek Cobra for proposal pricing in the mid-1990s.” Gary Caryn Senior Scheduler/Coordinator. these ﬁgures were the result of a complex set of manual steps. we form our baseline for budgeted cost of work scheduled and establish a price for review. Now with a true matrix structure and single cost account manager. the pricing team was familiar with it.hours only. Then the pricing team inputs elements such as manufacturing. As the system works now. labor. In 1998. and conﬁdence in earned value calculations has soared. government’s requirements for cost and performance tracking. “Being able to compare budgeted cost of work scheduled. Cobra is installed on the pricing and program analysis group server with executable ﬁles loaded on each workstation. like Open Plan. travel and other direct cost information is loaded into Cobra. In addition. it supported high-end Earned Value Management Systems (EVMS) capabilities compliant with the U. “When the resulting histograms are approved. GDLS loads a skeleton into its Basis of estimate Input Device (BID) system. we can use the direct load approach. “Using the system’s global editing capability. the scheduling group feeds the monthly budgeted cost of work performed from the updates provided. The system had proven its ability to integrate proposal pricing. and schedule data as well as work. Labor estimates are also taken from the BID system and fed into the schedule. GDLS senior scheduler/coordinator and one of the three employees who originally recommended Open Plan. organizational. cost. which collects labor. the standard Cobra reports have been well received by internal customers. The next step was to replace GDLS’s “black box” method of loading baseline data from Open Plan with a direct link to Cobra. and bill of material estimates. “At this point. Cobra was the logical choice for its cost performance reporting solution for several reasons. The program analysis team uses these numbers during the performance phase. and individuals charge the associated work orders to arrive at actual costs of work performed. budgeted cost of work performed. and resource breakdown structures. Then. “At that time. we were using the homegrown approach because we weren’t fully committed to a single person in the organization being responsible for multiple cost account resources.” says Steve Toll. Plus. project management team leader and GDLS associate administrator in London.” The Result According to Floody. and actual costs allows the program analysis team to generate cost/schedule status reports at the ® 24 .
For more information about Deltek. Founded in 1983. email info@deltek. VA 20171 © 2006 Deltek Systems.” But when it comes to fully automating complex defense projects in an environment with the depth and breadth of GDLS. CACI. GDLS senior scheduler/coordinator.com US & Canada: 800. Deltek’s clients include Bechtel.456. budgeting and control.deltek. visit our Web site at www. HOK and Verizon. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. and ﬁnance. ® For more information about Deltek and our solutions. Inc.2009 or 703.2009.com or call 800. “Using the system’s global editing capability.000 customers worldwide. All referenced trademarks are the property of their respective owners.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. CRM and proposal automation. About Deltek With more than 11. All rights reserved. 25 . but our ongoing challenge is to set up a process that supports it. Herndon. visit www. HR management.program and enterprise levels. Deltek Costpoint®.deltek.com. “Open Plan and Cobra have given us the tools to eventually achieve true cost/schedule integration. integrating all aspects of their businesses. procurement and materials management and project management.” concludes Floody. GDLS intends to automate their entire project management system.734. Herndon. software is only part of the story. Real cost/schedule integration is an ongoing process that also requires collaboration and coordination between engineering. business intelligence. we can then ﬁlter and manipulate the data into formats suitable for distribution to various team members and management. project management. billing. Deltek enables companies to maximize proﬁtability and productivity. resource planning.” explains Gary Caryn. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting.456. employee time and expense.
Overview When the word came from the chief executives that managers needed to be accountable for every aspect of scheduling. It was critical for our executives to be able to access all program information in one place. SNC realized a web portal providing current data from Cobra and Open Plan was crucial. “We chose Open Plan for scheduling because it worked so well with Cobra and it had the Web-based access via the WelcomHome portal. Senior Program Controls Manager with SNC. SNC. new systems could help SNC improve accountability.” she adds..” says Connie Luna. ways of tracking and reporting information.S. “ “Today. If done right. The Beneﬁt With more than 450 employees and 16 locations throughout the U. the Program Support Ofﬁce of SNC went to work. the potential return on investment was worth the challenge. and cost performance related to their programs. resource utilization.” 26 . the Program Support Ofﬁce needed a comprehensive scheduling and enterprise project management system that would integrate with Cobra. The Need The challenge was clear. To meet the executive directive. They also had to take scalability into account. Although the challenge was signiﬁcant. was already using Deltek Cobra™ for cost control and earned value management. They needed to choose new systems that would be accepted by scores of program managers who were used to their own. enhance customer relationships. A few years later. and we’re able to respond more quickly and accurately to our customers. The ofﬁce also had to ﬁnd a way to make the program schedule and cost information visible throughout the enterprise. “The Web portal was particularly important to us in terms of program visibility. “This has deﬁnitely contributed to the growth we’re experiencing. due to the growing number of SNC subsidiaries and the potential for hundreds of projects active at any given time. often manual. thanks to the Welcom products. these hoped-for results became reality. and secure its foundation for strategic company growth. a provider of electronic software and instruments for the defense industry. we’re able to see exactly where we are on any program.® Sierra Nevada Corporation (SNC) Defense contractor achieves instantaneous status of programs with Deltek solution Deltek enhanced its ability to provide critical earned value management (EVM) offerings to its broad project-focused customer base with the acquisition of Welcom in March 2006.
” Luna says.The Result SNC has experienced 30% growth per year for the past several years due to growing demand for its products supporting air trafﬁc control. instrumentation. which enables all staff.” Luna says.gives him a snapshot of program health.S. and the schedule and cost indices) . Department of Defense and a subcontractor for other prime defense contractors. and expenditures for a program and use those metrics to better determine schedules and costs for future proposals. regardless of location. Basis of Estimate (BOE) data is also generated from the data loaded into Open Plan. “Our CEO keeps close contact with all of our customers. which include CPI (cost performance index) and SPI (schedule performance index). The process begins at the pursuit stage. including any problems. This view . he can see exactly where we are on the programs. surveillance. he can also drill down into schedule or cost details. materials. For proposals. Using a customized Resource Management Report. The CEO is not the only senior executive who had very speciﬁc requirements for SNC’s project management solution.” This allows SNC to have one centralized data repository for all program information across its operations. As a result. The CEO also checks summary reports by business area. based on live data from Cobra. ® 27 . Then he can share that information with customers or show customers how they can access information through the portal. but also speciﬁc to each of the subsidiaries. resources. A privately held company. With more than 450 employees at SNC. Having the proposal established in Open Plan provides an easy transition for the Program Manager to then move to the program stage. actual cost of work performed. “With visibility through WelcomHome. as well as SNC’s executives. SNC realized a Web portal providing current data from Open Plan and Cobra was crucial. When the proposal is submitted to the customer. By capturing all of this information in Cobra and Open Plan. SNC is a contractor for the U. to access the information quickly. the ofﬁce can track the actual time. in each of these. SNC’s human resource department uses WelcomHome to stay on top of the company’s labor requirements. Then the program is integrated with Cobra to provide the pricing data. and he needs to know the status of programs and any potential issues before the customer brings them to his attention. in addition to the subsidiaries in 16 locations throughout the United States. budgeted cost of work performed. geographically dispersed program managers and team members. where probable orders are entered into Open Plan. “The direction from our CFO was that she wanted to see project information not only speciﬁc to SNC. the Proposal/Program Manager loads the schedule into Open Plan. Deltek Cobra and Deltek Open Plan™ are used extensively in business pursuit and proposal stages as well as in the management of the resultant contracts. and reconnaissance systems. The Program Manager reports on status and earned value and updates the Estimate to Complete (ETC). and Other Direct Costs (ODCs) requirements. Luna says. it shows a schedule that is linked to speciﬁc tasks that are linked to speciﬁc resources.” The CEO frequently accesses top-level program summaries. and training systems. which addresses total expected costs for all work remaining on the contract.(showing budgeted cost of work scheduled. These pursuits are projected to include labor. access information through Deltek WelcomHome™. unmanned aerial vehicle (UAV) systems. test. “So we have Open Plan centralized at SNC’s headquarters and accessed through Windows Terminal Services by program managers at the subsidiaries. and intelligence.
and backofﬁce applications including accounting. Herndon.2009.deltek.” Luna says. All rights reserved. we can view this through the WelcomHome Web portal. “Because the department can have 1. which assisted PennDOT in the selection process.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane.deltek. and WelcomHome. All referenced trademarks are the property of their respective owners. Herndon. consistent interface. and Open Plan Enterprise—to serve the different needs and responsibilities of project managers. “Open Plan’s ease of use. employee time and expense. We have accurate cost and schedule information.734. executives. With the help of Cobra.” says Jim Sideris. CACI. and capacity to determine if any hiring requirements or underutilization issues should be addressed. and ODBC compliance combined to set Welcom apart from the competition. “We get instantaneous answers to the status of our programs. CRM and proposal automation. “With Welcom products. Open Plan is a highly integrated. visit www. business intelligence. Deltek Costpoint®.456.com. 28 . VA-based Deltek is the leading provider of enterprise management software for project-focused organizations.the department reviews labor usage.” About Deltek With more than 11. integrating all aspects of their businesses. email info@deltek. the overriding beneﬁt is that they give our top-level management insight at a glance into where we are with every program that we have on contract. Inc. Deltek Vision® and Deltek GCS Premier® power a myriad of front. These attributes were instrumental in PennDOT’s selection of Deltek software. It is the most technically advanced client/server project management system on the market. which are the lifeblood of SNC’s defense contracts. HR management.com US & Canada: 800. procurement and materials management and project management. senior project manager for KPMG. ® For more information about Deltek and our solutions. Open Plan comes in three editions—Open Plan Professional.456. For more information about Deltek. Luna says SNC puts “100 percent emphasis” on its programs. Open Plan. team members. Founded in 1983. and at any point. Open Plan Desktop. visit our Web site at www. HOK and Verizon. billing. resource planning. Unlike less sophisticated products. PennDOT needed more than a stand-alone project package. and subcontractors.2009 or 703. using the latest in Microsoft Windows® development technology. budgeting and control. VA 20171 © 2006 Deltek Systems. projected usage.000 customers worldwide. Deltek’s clients include Bechtel. comprehensive software system that can be customized to ﬁt speciﬁc corporate requirements.” Open Plan is an enterprise-wide project management system that substantially improves a company’s ability to manage and complete multiple projects on time and within budget. Deltek enables companies to maximize proﬁtability and productivity.000 or more design jobs underway at any one time. SNC staff and executives manage the programs in ways needed to ensure success.com or call 800.
SLAC need an implementation plan – a plan for the plan. SLAC used disparate Microsoft Project® schedules on stand-alone desktop CPU’s. developing an integrated project schedule (to include scheduling methodology and integration of the detailed system and subsystem schedules). LBNL. that included validating the project management control system (PMCS) under DOE Order 4700. evaluating and purchasing software and hardware). which began in 1994 and completed in July of 1998. The project.® Stanford Linear Accelerator Center (SLAC) The B Factor at SLAC Project comes on-line in record time thanks to Deltek Cobra™ Deltek enhanced its ability to provide critical earned value management (EVM) offerings to its broad project-focused customer base with the acquisition of Welcom in March 2006.200-ton particle detector built by a consortium of nine nations. Needless to say. For the B Factor project to succeed. which did not provide a true measure of whether a project was on-budget and on-time. Actual vs. The Need Before the B Factory project began. SLAC needed an implementation plan – a plan for the plan. and LLNL. and work package planning (time-phasing the budget and establishing accounting links and performance measurement techniques). This would require identifying interim milestones for infrastructure development (hiring a qualiﬁed staff. For scheduling. which were considerable. and a 1.5. the B Factory is an innovative electron-positron collider that creates millions of short-lived B mesons whose behavior provides clues about matter-antimatter asymmetries. comprised two major construction efforts: a two-ring accelerator complex built by a collaboration of SLAC. Overview The B Factory at SLAC was created to examine one of nature’s great secrets – why matter exists. This made it difﬁcult to perform critical path analyses and allocate resources. SLAC had neither a formal project management system nor the institutional processes and systems to support one. Designed and built by SLAC in cooperation with the Lawrence Berkeley National Laboratory (LBNL) and Lawrence Livermore National Laboratories (LLNL) with $293 million in DOE funding. SLAC set itself on a path to implement what would become an award winning PMCS. in SLAC’s case. managing a project of this magnitude and sensitivity was a daunting opposition. budgeted costs were tracked on Microsoft Excel® spreadsheets. 29 . For the B Factory project to succeed. Full program funding was contingent upon successful completion of a management systems review. With the help of some powerful tools.
com. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting. HOK and Verizon. The AIM team converted the stand-alone Microsoft Project ﬁles into a P3 database. email info@deltek. Then. AIM uploaded this schedule information into the Cobra cost management system. SLAC approached AIM. All referenced trademarks are the property of their respective owners.456. “We chose AIM because of its reputation for improving bottom-line results by implementing effective project controls systems – including project planning. and Primavera P3. visit www. About Deltek With more than 11. ® For more information about Deltek and our solutions. and resources for reliable calculations. a powerful cost management system. producing the ﬁrst set of reports from the PMCS in nine months. establish performance measurement techniques and assess budget and obligation proﬁles. and resource management. AIM and SLAC chose a solution that married two software packages: Cobra. integrating all aspects of their businesses.456.com US & Canada: 800. “The entire B Factory. Deltek’s clients include Bechtel. budgeting and control.com or call 800.” says SLAC Director. its open architecture and unmatched ﬂexibility allow seamless integration with many schedule systems. Inc.734. billing. to the great credit of the machine builders and the delight of the hundreds of BABAR scientists now trying to cope with the ﬂood of data. for help in implementing a PMCS for the B Factory project. The implementation procedure went well. Because managing and reporting on cost was a critical part of the B Factory project. business intelligence. after ensuring that 100% of the scope was covered and that the network was logic-driven. Jonathan Dorfan. Herndon. In October 2000. cost management. 30 .2009. The team developed a scheduling methodology to ensure proper activity coding for reporting and consistent use of calendars. units. For more information about Deltek.deltek.The Beneﬁt In 1994. acknowledging the on-time.000 customers worldwide. employee time and expense. The Result The project controls team reached all of its milestones. both collider and detector. Cobra was a natural choice. Deltek enables companies to maximize proﬁtability and productivity. CACI. the DOE honored SLAC with the DOE Director’s Award. procurement and materials management and project management. visit our Web site at www. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. a leading provider of project management solutions. “The Department of Energy imposed a very aggressive timeline for implementing the PMCS on the B Factory Project. resource planning.” says Jeffrey Chan.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. Founded in 1983. AIM identiﬁed interfaces with other systems. Deltek Costpoint®. CRM and proposal automation. VA 20171 © 2006 Deltek Systems. AIM worked with SLAC’s control account managers to plan work packages. HR management. an AIM consultant on the SLAC project. Herndon.2009 or 703. All rights reserved. After an extensive needs assessment.” says a SLAC spokesperson.deltek. onbudget completion of the $293 million project. has come on-line smoothly and in record time.
gov/2006/06-5966.Third Party Documents The following links are provided to help you understand new regulations.g.aspx?id=19533 Final FAR ruling: http://a257. The National Defense Industrial Association (NDIA) ANSI EIA 748 Intent Guide https://acc.gpo.htm News Article: Acquisition councils finalize EVM rule http://www.html 31 .dau.mil/CommunityBrowser.access.akamaitech.net/7/257/2422/01jan20061800/edocket.gcn.com/online/vol1_no1/41240-1.
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