Earned Value Measurement 1

Earned Value Measurement: Status Report

 Earned Value Measurement 2

Status Report

The model of Earned Value Measurement can be used to determine the true status of the

project. The EVM model has three key elements or metrics namely the planned value, the earned

value and the actual cost, which form the basis for the Earned Value Measurement. These three

values should be first determined in order to know about the Schedule Variance (SV), Cost

Variance (CV), Schedule Performance Index (SPI) and Cost Performance Index (CPI) (Project

Management).

For the project, we will determine the value of these three elements i.e. planned value, the

earned value and the actual cost. The Planned Value (PV) is also known as the Budgeted Cost of

Work Schedule (BCWS), the Earned Value is also known as the Budgeted Cost of Work

Performed (BCWP) and the Actual Cost is also known as the Actual Cost of Work Performed

(ACWP) (Use Earned Value Management (EVM) to determine project status, 2007).

For Task A, the three metrics are as follows:

PV = $1200

EV = $360

AC = $600

Therefore, the four variances mentioned above can be calculated for the Task A of the project.

SV = EV – PV

= $360 – $1200

= ($840)

Here, the SV is negative. This means that the project is behind the budgeted schedule.

CV = EV – AC

= $360 – $600
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= ($240)

Here, the CV is negative. This means that at this point, the project is over budgeted.

SPI = EV/PV

= $360/ $1200

= .3

Here, the SPI is less than 1.0; this means that the project is getting less work done as compared

to the planned work.

CPI = EV/AC

= $360/ $600

= .6

Here, the CPI is less than 1.0; this means that the project is getting less work done for the

expense of each dollar as compared to the initial estimation.

For Task B, the three metrics are as follows:

PV = $1200

EV = $360

AC = $500

Therefore, the four variances mentioned above can be calculated for the Task B of the project.

SV = EV – PV

= $360 – $1200

= ($840)

Here also, the SV is negative. This means that the project is behind the budgeted schedule.

CV = EV – AC

= $360 – $500
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= ($140)

Here also, the CV is negative, which mean that at this point, the project is over budgeted.

SPI = EV/PV

= $360/ $1200

= .3

Here also, the SPI is less than 1.0; this means that the project is getting less work done as

compared to the planned work.

CPI = EV/AC

= $360/ $500

= .72

Here also, the CPI is less than 1.0; this means that the project is getting less work done for the

expense of each dollar as compared to the initial estimation.

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Instructions

In order to determine the true and accurate status of the project, EVM model can be used.

The EVM model consists of three key elements i.e. PV (planned value), EV (earned value), AC

(actual cost), which should be ascertained so as to calculate the SV (Schedule Variance), CV

(Cost Variance), SPI (Schedule Performance Index) and CPI (Cost Performance Index).

EVA works best when it is compartmentalized and compartmentalization is best achieved

when there is a well-planned Work Break Down structure. Some important instructions have

been mentioned below, which will really be beneficial for both Jennifer and Ben in preparing

their project status report for giving a next project update in future.

1. The following elements should be taken into consideration while preparing the project

status report:

 One title page pertaining to the project

 Identification of the persons who prepares the report along with the date.

 Accomplishments list since the last report

 Pending items list still to be resolved

 Any concerns and recommended actions list so as to resolve them

 Remarks for informing and motivating the team members.

2. The project status report should be prepared at regular intervals, which is normally once a

week.

3. Holding of the copies of the project status report in the project diaries or notebooks and

keeping these reports internal to the project team (PROJECT STATUS REPORT, 2008).
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References

PROJECT STATUS REPORT (2008). Retrieved May 27, 2008, from

http://www.ceismc.gatech.edu/MM_Tools/PSR.html

Project Management. Retrieved May 27, 2008 from http://www.ittoolkit.com/articles_pm.html

Use Earned Value Management (EVM) to determine project status (March, 2007). Retrieved

May 27, 2008 from http://articles.techrepublic.com.com/5100-10878_11-6170763.html