Deltek Earned Value Management Guide
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
. Earned value for completed activities is equal to the total budget for those activities. and tools for enterprise project planning and control.
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. schedule. The basic theory behind these methods is to multiply the budget by a “percentage complete” to get the earned value. This provides a metric to measure what was spent and the budgeted amount of the work completed (or earned value). there are a number of methods for objectively measuring earned value. For activities not yet begun. 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. processes. the budget for each task is earned. The process includes integration of scope. a performance measurement baseline. 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. Earned value management also provides indices are used as early detection mechanisms.
Earned Value Management provides indices used as early detection mechanisms. schedule. For activities in progress. giving you time to implement effective corrective action.®
What is EVMS?
How an Earned Value Management System can Help You
An earned value management system (EVMS) is a set of best business practices. EVMS provides a common-sense process for project management. cost. The basic EVMS process comprises the following key concepts: • Plan all of the work • Integrate scope. Additionally. giving you time to implement effective corrective action. It can also be described as the sum of the budgets for completed work. EVMS supplies valuable project health indicators. the earned value is zero. considered by many companies and governments to be a best practice. and earned value.
• Measuring Performance . forward-looking.” says David Chard of BAE Systems. and more aware of its business performance. The WBS is used to break down the work into deﬁnable product elements and is used as a rollup reporting tool.Comprised of the statement of work (SOW) and the work breakdown structure (WBS). the schedule. our organization has moved away from a ‘blame culture’ to one that is open. project management. 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
. The process can be summarized as follows: • Scope Deﬁnition . Earned value management is basic. Since implementing EVMS over ﬁve years ago. common sense. • Program Organization .These EVMS concepts are incorporated into a process guide deﬁned in the American National Standards Institute ANSI/EIA-748 Standard on Earned Value Management.As the project progresses. Variances from the budget are analyzed and corrective actions are considered. • Document the Process . • Revision Control . we implemented the process on other contracts.
Earned Value Management Software
Spreadsheets alone are insufﬁcient legal documentation proving your organization uses best practices.As changes to the project occur. A schedule is created and budget is assigned to individual tasks. Project performance-to-date is used to analyze forecasted costs. “EVMS was such a major success on one defense contract. Companies which rely only on spreadsheets for project forecasting are in greater danger of noncompliance and criminal litigation. budget. discrete tasks in the schedule are objectively assigned status and earned value is calculated. the remaining project costs are continually evaluated and updated.Short.Control points are established where actual costs are collected and variances analyzed.A document is created that describes how each of these steps will be implemented across the enterprise. • Estimate at Completion . The SOW identiﬁes the scope requirements for a project and is used as a basis for the schedule and budget. 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. A control account manager (CAM) is assigned to manage each unit of work. and forecast are updated to reﬂect the current scope. The best method to protect your organization and employees from criminal prosecution is a combination of earned value management and statistical forecasting software.
this could reduce the proﬁt margin on the project and. 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. To reduce legal liability. 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. complexity.• 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. 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.
. 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. you appear under your target budget. Therefore. Fehr. if your project’s budget is $10 million dollars. company ofﬁcials could be held criminally liable. the project is behind schedule and the completed work costs much more than originally planned.” says Steven P. But if you have only completed $5 million dollars worth of work. or “EAC”). Vice President of BearingPoint. and you have spent $9 million dollars. and resources performing the work can help project managers in this effort. Assuming the total project cost will be the same as the original estimate is not an acceptable practice. If this is the case. then your project has a $4 million overrun of costs.
Determine accurate project completion costs
Once a project is underway. 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. For example. Factors including a better understanding of the project scope.
85 means that for every dollar of budget. how can project managers and senior management feel conﬁdent in
. only 85¢ worth of work is completed. Oftentimes. Dividing the remaining budget by the CPI of 0. complex projects. but I’m going to make it up. Without earned value. looking at the baseline plan from the current time through completion will be misleading.and the Cost Variance (CV) . 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 dollars worth of work is completed.0 reﬂects unfavorable performance. since it represents improved performance.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). The resulting value is the cost performance index (CPI). Unless there is an appropriate explanation how this improved performance can be achieved. project managers announce. especially on large. Statistical forecasts are more practical for calculating completion costs because they use past project performance to estimate future project costs.” Since statistics prove that few projects do make it up.85 means that for every dollar spent. 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.
There are a number of methods which can be used to determine the project cost-at-completion. Average performance-to-date is calculated by dividing the cumulative earned value by the cumulative actual costs. A CPI of less than 1. Statistical forecasts created using indices like the CPI and SPI allow for very accurate forecasts because they consider both project status and past performance. Figure 2 shows the Schedule Variance (SV) . only 0. including re-evaluation of the remaining work and usage of statistical forecasts. a CPI of 0. They may provide early warning signs of project overruns and can be used to evaluate the accuracy of a manually entered EAC. a performance factor should be applied to the remaining work in order to properly project the ﬁnal cost.the difference between the earned value and the budget . “I know the project has been over running in costs to-date.
Lend evidence and credibility to a forecast
People tend to be optimistic. For example. However. If the project costs-to-date are higher than budgeted. The schedule performance index (SPI) is a similar index which is calculated by dividing the earned value by the budget.the difference between the earned value and the actual costs.Budget Earned Value
Figure 1 Figure 2
Figure 1 shows actual costs as less than budgeted. An SPI of 0. this method is time-consuming.
To validate a given forecast. You can standardize the way projects are managed and reduce the likelihood of inaccurate information by using EVMS software.project forecasts? The to complete performance index (TCPI) is the ratio of the remaining work to the remaining cost.3 Studies show that EACs based on both the CPI and the SPI tend to be signiﬁcantly higher and are generally more accurate. It is used to gain conﬁdence in the reported forecast for the remaining work. For a $5 billion company.1% to 0. but you can identify what issue caused poor performance early enough to have the opportunity to change the outcome. Senior management should have conﬁdence in a forecast where the TCPI is close to the value of the CPI. “ AMR Research1 The Department of Defense’s experience in more than 400 programs since 1977 indicates that. Combining EVMS principles and performance indicators provides you early warning signals. It may not bring the project in on time. EVMS helps you reduce risk in a project’s outcome. the cumulative CPI does not signiﬁcantly improve during the period between 15% and 85% of contract performance.4
No methodology or process will make projects proﬁtable overnight. results show that the average EAC based on the cumulative CPI was the lower end of the average [actual] cost at completion. which allow you to apply effective corrective action.2% of total revenue.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. without exception.2 In fact. While most companies reported they would spend an average of 0. that equates to $5M to $10M in incremental spending. it tends to decline. conglomerates with widely different and independent business units have budgeted for up to 0. business process change. A TCPI that is greater than the CPI shows an improvement in performance and means that the forecast is not probable. in fact. the TCPI should be very similar to the CPI achieved to date. “Nearly 77% of companies will spend more on IT. the TCPI of a project should be compared to the CPI of the project todate. It indicates the level of performance which must be achieved to reach a particular estimate at completion. corporate governance. you can transform your project management ofﬁce from a cost center into a competitive advantage!
. Removing the formulas from Excel spreadsheets and preventing each project from being managed as an island. and consulting this year as a direct result of SOX compliance.
Deltek Costpoint®. Herndon. visit www. Ph. actuals. and forecasts. budgeting and control. HOK and Verizon. the leading EVMS solution. visit our Web site at www.
. Washington DC: Department of the Navy. measuring earned value. resource planning. and analyzing budgets.. Directorship. employee time and expense. Journal of Cost Analysis Spring 1996. Inc. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. Founded in 1983.com US & Canada: 800. John Hagerty. email info@deltek. Report to the Secretary of the Navy. Ms. She currently serves as Product Director of Deltek Cobra™.deltek. Schulte held the position of Design Engineer with the Texas State Department of Highways. Deltek enables companies to maximize proﬁtability and productivity. Beach. Jr. CRM and proposal automation. Prior to joining Deltek. 2002. Sarbanes-Oxley Act of 2002. MA: AMR Research Inc. Ms. MA: AMR Research Inc.D.456.deltek. All referenced trademarks are the property of their respective owners. Boston. business intelligence. Ms. and S.Author
Ruthanne Schulte has been employed with Deltek since 1990. Deltek’s clients include Bechtel. Herndon. March 21. Schulte is a highly sought speaker on earned value management and has published numerous articles and white papers.000 customers worldwide. She has extensive experience in EVMS. “CFOs Say It’s All About Process and Internal Controls” AMR Research Report. billing. J. December 16-17. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. VA 20171
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1 Lindsey Sodano. “CIOs: There Is a Sarbanes-Oxley Project in Your Future--Do You Know What It Is?” AMR Research Report. May 06. “Encouraging Whistle Blowing: The Audit Committee’s new job”.. Christensen. procurement and materials management and project management. John Hagerty. Kaplan. All rights reserved. HR management. David S. 2003. integrating all aspects of their businesses.
For more information about Deltek. 1990. A-12 Administrative Inquiry. 2003. Chester Paul. During that time she developed schedules and performed manpower studies based on multi-project resource scheduling. Boston.
With more than 11.734.
For more information about Deltek and our solutions.2009. Schulte earned a BS in Civil Engineering from Texas A&M University. Priest.com
or call 800.2009 or 703. Project Advocacy and the Estimate at Completion Problem. Deltek clients and project management professionals rely on her expert advice relating to the importance of managing project costs. government requirements and implementation techniques.
be sure they come in on budget. and we want an early warning system to let us know when problems arise before it is too late to resolve the problem. medium. As project managers. budgetconscious 21st century. In a Standish Group study of software projects in both the public and private sectors. and speak about the likelihood of failure BEFORE it actually occurs or we run out of budget. with the average overrun being 222% of the original time estimate (Chaos 1995). Project ahead of schedule versus project behind schedule. However.
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. In order to do this. Failure records like these can be interpreted to mean that project management tools and techniques are not being effectively used and applied. time overruns experienced similar difﬁculties. 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.
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. Being told not to worry versus spending sleepless nights worrying. nearly 90% of the studied projects failed due to cost and time overruns. Nearly one third of the small. We need to see the potential for cost overruns. and Speak No Evil. so we’re in search of a solution that can help. we want it to be successful. We’ve heard all the horror stories about cost overruns. Overall. Earned value ﬁlls the need when project success and the success of the company hang in the balance in this fast-paced. no. These factors have been used to manage projects in the past. our goals are to control our projects. with project costs coming in with an average overrun of 189% of the original cost estimate. the 10
. yet can they alone describe the real health of a project? In a word. Over one third of all the companies in the study reported time overruns of 200-300%.®
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.
When faced with a new project. hear about the risks. In addition. We certainly don’t want history to repeat itself. Hear No Evil. and large companies studied experienced cost overruns of 150-200%. failed and challenged projects alone cost US companies and government agencies an estimated $145 billion per year. Its principles were set down as Cost/Schedule Control Systems Criteria in the DoD’s ﬁnancial management orders in 1967. Likewise. we must ignore the advice of the three monkeys. Budget versus actual costs. and avoid any cost overruns. more than 33% were cancelled before they ever came to completion.
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. Proper analysis of a project requires four major items: budget. and the project is only halfway complete. we have a project that is behind schedule. schedule and cost objectives. However. If you analyze only the budget versus actual costs. and management replanning that may be required (Gansler 1999). it may then show that only half of the originally planned work has been performed. The processes include integration of program scope. actual costs. USD(A&T). earned value. Without earned value. In August of 1999.idea has actually been in existence since the 1800s when industrial engineers wanted a way to measure performance on the factory ﬂoor. If so. Is my project doing well. signed a memorandum announcing that the Department of Defense had adopted the ANSI EVMS Standard for use on defense acquisitions. if the project spending is 10% under budget. The system provides a sound basis for problem identiﬁcation. an incorrect representation often results. this might appear as if the project is doing very well. and forecasts. 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. 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. corrective actions. Is my project doing well. The rest of the work will cost less than budgeted.
How is Earned Value calculated?
Earned value may be deﬁned as the sum of the budgets for
. or is it behind schedule?
Earned value is a means of placing a dollar value on project status. Dr. or is it behind schedule? • My project’s actual costs are now higher than budgeted.
My actual costs are less than my budget. then earned value is a tool you should seriously consider using to determine your project’s health. For example. establishment of a baseline plan for accomplishment of program objectives. Jack Gansler. This allows you to compare budget versus actual costs versus project status in dollar amounts. and the completed work costs much more than originally planned!
Figure 1 shows actual costs as less than budgeted. What’s it likely to cost at completion? • My project manager or engineer keeps telling me not to worry about the cost overruns. when the project status or earned value is added to the analysis.
Budget Earned Value
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. and use of earned value techniques for performance measurement during the execution of a program.
Why Use Earned Value?
Have you ever asked yourself any of these questions? • My actual costs are less than my budget. All four are needed to obtain a true picture of the project’s health.
then the value is earned. 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. in fact. If project costs to date are higher than budgeted. Therefore. An example of this is the work performed by a project manager or a quality control inspector. 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. The resulting value is called the CPI.85 means that for every dollar being spent. Dividing the remaining budget by the CPI of 0.
. earned value for completed activities is equal to the total budget. Unless there is an appropriate explanation as to how this improved performance can be achieved.the work that is complete. a CPI of 0. However. The Earned Value Management System (EVMS) guidelines give a number of alternative methods for measuring the earned value of an activity in progress. Basically. you must come up with a system of measurement that includes objective judgments.85 provides a cost estimate that reﬂects a condition where the performance-to-date is assumed to continue to the end of the project. Simply using the remaining budget may be misleading. 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.85 dollars worth of work is being done. using the baseline plan from the current time to completion will be misleading as it would represent improved performance. Most projects contain at least some work that is regarded as inherently immeasurable. For activities not yet begun. Average performance-to-date is calculated by dividing the cumulative earned value by the cumulative actual costs. These methods are often called earned value methodologies or performance measurement techniques (PMT). The basic theory behind all of the methodologies is to multiply the budget by a percentage complete to get the earned value. it tends to decline (Beach 1990). only 0. A CPI that is less than one reﬂects unfavorable performance. this method is often too labor-intensive to be justiﬁed. the earned value is zero. In order to measure the performance of activities in progress. a performance factor should be applied to the remaining work in order to properly project the ﬁnal cost. For example. and the project is only halfway complete. as long as the task is performed.
you can develop forecasts that are very accurate because they take into account both project status and past cost performance. pessimistic. or they may be Best Case more optimistic as an incentive towards more rigorous management. and most likely forecasts plotted on a single graph.
My project manager or engineer keeps telling me not to worry about the cost overruns. the total estimate at complete (EAC) is $125. even if that means understating the projected completion cost (Christensen 1996). 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). detailed forecast: • A set of optimistic.636 x 45 = $70.
pessimistic. Worst Case • Internal forecasts that are used by the project Most Likely Case managers to manage the contract and report internally. The following are the typical forecasts that should be maintained for an accurate. Instead. Using indicators such as the CPI and SPI.636 ETC = 1/0.7
Figure 3 The “to-go effort” or estimate-to-complete (ETC) is multiplied by I/CPI. results show that the average EAC based on the cumulative CPI was the lower end of the average cost at completion (Christensen 1996). Multiple forecasts facilitate efﬁcient project management because they provide an early warning of probable project overruns. TIME • Multiple forecasts based on the effects of future rate changes.Estimate at complete = 125. Is this probable?
Despite the widely known fact that the recoveries from cost overruns on defense contracts are extremely rare. According to some authors.7 Therefore. ETC = 80-35 = $45k
Actual cost = 55
Budget at complete = 80 Budget to date = 45 Earned value = 35
CPI = earned value/actual cost = 35/55 = 0. analysis of 64 completed contracts shows that the ﬁnal cost overruns estimated by the contractor were less than the current cost overruns (Christensen 1993). • Several different statistical forecasts to increase conﬁdence in the manually entered forecasts.7k
ETC = 1/CPI x (BAC-EV) In fact. the objective has been to protect the project and the careers of its managers. In particular. These may be the same set as above. determining the most accurate estimate has never been the objective of the contractor (Fox 1974) (Mayer 1991).
. Figure 4 shows the optimistic. The rest of the work will cost less than budgeted. and most likely forecasts for client reporting. Other common index-based EACs that are found to be higher are more accurate.
only 80% of that person’s time is actually spent on the project. In this case. Along with productivity factors based on the season and personnel. an accurate FTE calculation should include a lower productivity factor.earned value estimate at complete . most countries have holidays during certain times of the year. are considered. shows an improvement in the performance and means that the EAC used in the formula is not probable. and times of year. therefore. To countermand this expectation. have a lower productivity rate. The TCPI will help you examine the probability of the project costs matching a particular forecast. using the baseline plan from the current time to completion implies an expectation that stafﬁng performance will improve. TCPI = budget .
To Complete Performance Index
The TCPI is an index used to rate the probability of a forecast. if 20% of an employee’s time is spent on nonbillable activities like attending meetings and ﬁlling out time cards. 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. the TCPI should not be higher than the CPI. A TCPI that is greater than the CPI. If the stafﬁng requirements for a project have been overrunning to date. there are also efﬁciency factors dependent on past performance that can be applied to the stafﬁng requirement for the remaining work.actual cost
The TCPI should be compared to the CPI of the project to date. When analyzing stafﬁng requirements you need to make sure that all activities. or equivalent stafﬁng units. Since the CPI of a project rarely improves once the project is greater than 20% complete. In addition.Upon reaching the 15% stage of completion. performance seldom exceeds the average performance-to-date and often deteriorates. The productivity factor might be different for various personnel. On the other hand. locations. As a matter of fact. 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. including level of effort activities. are commonly used instead of hours to project stafﬁng requirements. It is also known as the CPI to EAC index as it is the CPI that is required to meet a particular EAC. For example. a person with both resource management and project management responsibilities often spends a certain amount of time performing human resource activities and may. The to complete performance index (TCPI) is the ratio of the remaining work to the remaining cost. and people are frequently less productive during those times. after this point is reached. The productivity factor will be one if 100% of the working hours are billed to a speciﬁc project. It indicates the level of performance that you must achieve to reach a particular estimate at complete. project performance seldom improves.
Do I have the necessary staff for this new contract?
Full Time Equivalents (FTE). 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
required to complete a project. Finally. actual costs. and funding. You need to make sure that your forecast is not using the same rates used when the baseline was created. The ﬁnal outcome is the ability to store and report on both the original baseline and the funding.
How will funding cuts affect my cash ﬂow?
When analyzing a project. you compare the earned rate to the actual rate and the budgeted hours to the actual hours. 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. Therefore.
Worst Case Most Likely Case
Figure 5 shows how the actual costs reﬂect the funding. you should be analyzing earned versus actual as opposed to budgeted versus actual. it is important that you are able to compare budget.you need to copy the budget and globally factor costs using pricing functions. With the ability to report on multiple forecasts simultaneously. This will ensure that your ﬁnal project costs accurately reﬂect the current environment. Your forecasted rates should change with the economy. the earned value rate and the budgeted rate are most likely the same. make sure that your forecasts can be expressed in FTEs to show the projected stafﬁng requirements. you will be able to analyze the effects of expected changes by setting up different forecasts using the various labor rates or exchange rates.
. If your funding is reduced. the actual costs. Since cost of living adjustments are difﬁcult to predict. you will need to modify your spending. You are trying to make your actual costs and associated funding curves match. However.
What is causing my cost variance?
Many conditions cause cost variances. Today’s competitive market requires that you manage challenges such as funding cuts. however. 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. when you examine variances. It will allow you to use different sets of rates for each of your forecasts and to calculate foreign currencies as well. The derived costs associated with earned value are not calculated using a rate ﬁle but by earning the budget hours and associated derived costs. your contract may not allow you to change the baseline. You can then produce reports that show the baseline. 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.
Will labor rate and currency exchange rate ﬂuctuations affect my project’s cost?
Rate ﬂuctuations will affect the ﬁnal project cost. it is helpful to have all rate escalations deﬁned in a single rate set.not the funding . This type of rate analysis can also be beneﬁcial when dealing with currency exchange rates. and the funding. By using multiple “what-if” scenarios. To accomplish this analysis. If your contract requires you to earn value based on the original baseline .
but there are 120 actual hours.inevitably rear their ugly heads. Efﬁciency variance is calculated as follows: Eff. Variance = (Earned quantity . the ability to deliver a project on time and within the agreed upon budget is imperative. We want to be prepared for all eventualities.Actual quantity) x Earned price Any time that a cost variance is incurred during a project.Actual rate) x Actual hours To calculate an earned rate. Multiplying the remaining effort by 1/(CPI*SPI) is a good means of projecting the ﬁnal cost. Whether the contract is several months or several years in length. We don’t want to monkey around keeping our eyes.and do . 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. Earned value places schedule status in dollar amounts for proper project analysis. there is an efﬁciency variance. Rate variances are compensated for in a forecast by changing the to-go labor rate for your forecast. The rate variance is calculated using the following formula: Rate variance = (Earned rate . you might earn 100 hours and there are 100 actual hours. and mouths covered about problems such as cost overruns and schedule delays that can . If you are given an estimate to complete (ETC). 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. An efﬁciency variance is compensated for in a forecast by using statistical forecast methods based on previous performance. If your actual cost is much higher than the earned value.For example. Budget versus actual cost is not enough information to properly analyze project performance. ears. it is important to determine what is causing the variance. there is no time for games.
In today’s competitive marketplace. It is much easier
. the work being performed should be investigated to see if there are any means of improving the situation. and earned value gives us the early warning signs needed to accomplish our goals. An example of an efﬁciency variance is when you budget and earn 100 hours. 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. Is it a rate variance or an efﬁciency variance? In addition to simply changing the ﬁnal project cost. then you have a rate variance as opposed to an efﬁciency variance.
you want to make sure that the software product contains the functionality required to answer the questions outlined in this paper. we can identify. and cost into a work breakdown structure. • The “to-complete” performance index allows evaluation of the forecasted ﬁnal cost. • EVMS uses an index-based method to forecast the ﬁnal cost of the project. 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. • The schedule performance index provides an early warning signal.
. • The associated database of completed projects is useful for comparative analysis. 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. • The cumulative cost performance index (CPI) provides an early warning signal. • It integrates work. This way.to compare budgeted dollars to earned dollars than to compare budgeted dollars to a subjective percent complete of the entire project. 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. We continue to work at a breakneck pace in order to satisfy our customers and remain competitive. By using earned value throughout our projects. Therefore. 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. schedule. and resolve problems early. address. an earned value management software system is the best place to retrieve valuable information needed for reliable analysis of your project’s health.g. weekly or monthly) CPI is a benchmark. we can continue to work towards the improved management of those projects and greater business success as we move through the 21st century. • The “management by exception” principle can reduce information overload. • The CPI is a predictor of the ﬁnal cost of the project.
Evaluating an EVMS
When evaluating earned value management software. Our companies undoubtedly live and die by the success and failure of the projects we so carefully nurture. It is this comparison that gives early warning signs to the project’s health before the actual costs are above the total budget.
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 periodic (e.
She has extensive experience in EVMS. “Cost Overrun Optimism .8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. Deltek’s clients include Bechtel. She currently serves as Product Director of Deltek Cobra™. Inc. The Standish Group International. Published. employee time and expense. David S. Ms. budgeting and control. CT: Yale University. Ms. Chaos. CT: META Consulting Group. Ms.Author
Ruthanne Schulte has been employed with Deltek since 1990. Christensen.... Chester Paul. 1990. Gansler. Cooley. Schulte held the position of Design Engineer with the Texas State Department of Highways. Ph. Project Advocacy and the Estimate at Completion Problem.456. Washington DC: Department of the Navy. and forecasts. actuals. Arming America: How the US Buys Weapons.D. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. “The Cost and Beneﬁts of the Earned Value Management Process.Fact or Fiction?” Acquisition Review Quarterly March 1993. integrating all aspects of their businesses.D. Ph. David S. Inc. Kevin. Herndon. measuring earned value. Kenneth R.deltek. business intelligence. CACI.acq. resource planning. Report to the Secretary of the Navy.html> (17 October 1999). Mass: Harvard University. Jack. Jr.2009 or 703.mil/pm/newpolicy/indus/ansi_announce.” <http://www. A-12 Administrative Inquiry. During that time she developed schedules and performed manpower studies based on multi-project resource scheduling. Deltek enables companies to maximize proﬁtability and productivity.
For more information about Deltek and our solutions. Project Management: Why Do We Need It and What is It? Stamford. ANSI/EIA-748-1998. visit our Web site at www. Roldan. CRM and proposal automation. the leading EVMS solution. Ph. Mayer. Christensen. 1991. Christensen. HOK and Verizon. government requirements and implementation techniques. New Haven. and analyzing budgets. procurement and materials management and project management.000 customers worldwide. The Political Economy of Defense Contracting. Deltek Costpoint®.dau.D. HR management.734.
With more than 11.mil/pubs/arq/98arq/chrisevm.
Beach. Herndon. Deltek clients and project management professionals rely on her expert advice relating to the importance of managing project costs. Founded in 1983.pdf> (Fall 1998). Fox.” <http://www. 2000. “New ANSI Standard on EVMS Guidelines.osd. Schulte earned a BS in Civil Engineering from Texas A&M University.1995. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting.. billing. 1974.. David S. VA 20171
© 2006 Deltek Systems. Schulte is a highly sought speaker on earned value management and has published numerous articles and white papers.
. Prior to joining Deltek. J. Boston. All referenced trademarks are the property of their respective owners.com US & Canada: 800. All rights reserved. Journal of Cost Analysis Spring 1996.
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.
. Budgeting – Resources are assigned to the activities in the schedule. and the calculations that deﬁne how they are applied. 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). work authorization. and change control. Codes on the control account let you identify items such as a Cost Account Manager (CAM) or a customer WBS. The process guide contained in this standard includes project scope deﬁnition. The Integration Wizard lets you easily create your budget and update status from your schedule without dual data entry. The system described in the standard provides a sound basis for problem identiﬁcation. Cobra can automatically load labor and burden rates to maintain accuracy and consistency with your ﬁnancial systems. planning accounts. management reserve. taking you through each project phase in simple. Using batch processing. and much more. This process discussion of the ANSI standard provides further information on how to apply guidelines in the ANSI standard on EVMS. Program Organization – Cobra supports the traditional control account deﬁnition of the intersection of WBS and Organizational Breakdown Structure (OBS). step-by-step instructions.
Cobra lets you structure program data in a way that is both easy to maintain and compliant with the standard. rates. corrective actions. The Cobra user’s guide follows these steps and offers best practice advice on each of the major processes throughout the project lifecycle. Cobra is designed to be the application that supports the EVMS process. These rates.
Deltek Cobra is designed to simplify the EVMS process throughout a program’s lifecycle.
EVMS Process Discussion
Cobra is designed to simplify the EVMS process throughout a program’s lifecycle. The Cobra user’s guide offers best practice tips and examples for deﬁning resources. schedule. and cost objectives. 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
Earned Value Management System (EVMS) guidelines incorporate best business practices that have proven to provide strong beneﬁts for program or enterprise planning and control.
This analysis lets you generate statistical forecasts based on past performance or change the forecasted rate to generate an Estimate at Complete (EAC). Schedule Performance – Cobra stores all data time-phased. Critical path analysis and budget versus actual costs comparison do not always provide a clear picture of this concept. and earned value is calculated. This method allows you to quickly identify and direct energy to portions of the project that are experiencing difﬁculties. analysis of planned units versus material usage is important for projects with ongoing production requirements. Cobra’s performance measurement baseline consists of time-phased control account. Cobra
. progress is measured. you can identify problem areas very early and take steps to resolve the situation or modify your forecast to reﬂect the outcome more accurately. Cobra provides a broad selection of reports to analyze the different metrics used in performance measurement. Performance Analysis/Exception Reports – Earned value analysis helps you identify problems early in the project. Cost Performance – To calculate the cost variance.
Revisions and Data Maintenance
Change control is critical to baseline management. making it possible to apply corrective action.A work package is simply a task – a point where work is planned. 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.
Estimates at Completion
Cobra has the most powerful and ﬂexible forecasting functions on the market. Cobra provides reports which isolate rate variances versus hourly variances. 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. In order to calculate earned value. work packages are deﬁned. you compare the actual cost with the earned value for a particular period. or is it because the labor rate is higher? Price/Usage Analysis – Similar to the rate analysis on labor. All the earned value techniques described in the ANSI standard are available as well as many more requested by Cobra customers. work package. Earned value analysis lets you compare the budgeted value of completed work to the actual costs. These options let you deﬁne how you want to implement the standard based on your company’s requirements.
Earned value directly measures the quantity of work completed and does not reﬂect the quality or technical content. which is an efﬁcient way to manage a contract. Using earned value. It represents the value of the work that is ahead or behind schedule. and planning package budget as well as any undistributed budget. ﬂexible way to control and automatically log changes to the baseline. Cobra provides an easy. This is a measure of the costs incurred to perform the work accomplished. and only authorized changes may be introduced. which means the budget for a period can be compared to the earned value for the same period to determine the schedule variance. You can maintain both customer forecasts and multiple internal forecasts at the same time. Cobra supports management by exception. It is used to determine the “health” of your project. Is something costing more because it took longer than planned. and an earned value technique is assigned to each work package. The performance measurement baseline must reﬂect the current project objectives.
During that time she developed schedules and performed manpower studies based on multi-project resource scheduling. 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. and your changes are automatically logged for CPR 3 (changes to the baseline) reporting. HOK and Verizon.456. HR management. Ms. business intelligence. visit our Web site at www. integrating all aspects of or call 800. Inc. Prior to joining Deltek.com. billing. and forecasts. and analyzing budgets. Deltek Vision® and Deltek GCS Premier® power a myriad of front. CACI.2009 or 703.com US & Canada: 800. you should document your policies and procedures so the processes may be implemented and applied effectively throughout your company.2009.734. government requirements and implementation techniques.and backofﬁce applications including accounting.
With more than 11. Schulte earned a BS in Civil Engineering from Texas A&M University. Cobra is the earned value system used in the system description for many large defense contractors. Deltek clients and project management professionals rely on her expert advice relating to the importance of managing project costs. When you have approval for a particular change. about Deltek. All rights reserved. Deltek enables companies to maximize email info@deltek. Once in Cobra. actuals. measuring earned value.
.456.provides an efﬁcient means of loading proposed baseline changes from the schedule.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. procurement and materials management and project management. She currently serves as Product Director of Deltek Cobra™.com proﬁtability and productivity. Deltek Costpoint®. Founded in 1983. Deltek’s clients include Bechtel. CRM and proposal automation. budgeting and control. Herndon.deltek. resource planning.deltek.
For more information
For more information about Deltek and our solutions. employee time and expense. All referenced trademarks are the property of their respective owners. you simply mark that particular budget data part of the baseline. Schulte held the position of Design Engineer with the Texas State Department of Highways. Ms. VA 20171
© 2006 Deltek Systems. Ms. management software for project-focused organizations. Herndon. their businesses.
Ruthanne Schulte has been employed with Deltek since 1990.000 customers worldwide.
Once your company has established a method for proper earned value analysis. visit VA-based Deltek is the leading provider of enterprise www. the leading EVMS solution. She has extensive experience in EVMS.
and the existing tools – low-end scheduling and spreadsheet software – proved to be inadequate. code ﬁles. Since the early 1990s.
General Dynamics Land Systems (GDLS) needed a highly integrated. Their positive experiences with Open Plan became the basis for evaluating. GDLS needed U. 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. but it required constant troubleshooting. Not many software packages would be up to the task. government’s a powerful yet ﬂexible pricing solution compatible with Open Plan. Open Plan proved to be a highly integrated.®
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. Cobra and ancillary data housed on the network. supported high-end comprehensive package fully capable of supporting the size and complexity of GDLS EVMS capabilities projects. That system proved adequate for a few years. GDLS has held several major defense contracts for manufacturing LAVs. and ultimately implementing the system.
Manufacturing Light Armored Vehicles (LAV) for governments around the world is serious business that demands powerful scheduling and cost management software. Each has required considerable effort in the proposal development phase. and actual cost data.S. While searching for the scheduling solution. Reporting was limited to work 23
requirements for cost and performance tracking. Deltek Open Plan™ and Deltek Cobra™ were chosen so General Dynamics Land Systems could achieve the goal of automating their entire project management system. comprehensive software package that was fully capable of supporting the size and complexity of its defense operations projects. GDLS used a homegrown cost reporting solution that relied upon a relational database to incorporate budget.
Because of hardware limitations and complex interfaces with cost systems. GDLS hired three new team members who had used Open Plan with a former employer. and report templates as well as shared project Like Open Plan. A new. status. but GDLS had no system to develop a resource loaded schedule for baseline proposal data. calendars. Deltek’s products gave General Dynamics Land Systems the tools it needed to eventually achieve true cost and schedule integration. high-end pricing package that consolidated data into one database solved part of the problem. but the leading global producer of LAVs – GDLS – chose Open Plan to manage its defense operations projects. With its shared resource pools.
“Using the system’s global editing capability.” explains Janice Floody.” says Steve Toll. “At that time. 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. “When the resulting histograms are approved. Then the pricing team inputs elements such as manufacturing. Cobra is installed on the pricing and program analysis group server with executable ﬁles loaded on each workstation. cost. travel and other direct cost information is loaded into Cobra. these ﬁgures were the result of a complex set of manual steps. and resource breakdown structures.” Gary Caryn Senior Scheduler/Coordinator. Now with a true matrix structure and single cost account manager. we can use the direct load approach. organizational. The system had proven its ability to integrate proposal pricing. In 1998. In addition. and bill of material estimates. the pricing team was familiar with it. 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. GDLS senior scheduler/coordinator and one of the three employees who originally recommended Open Plan. “Being able to compare budgeted cost of work scheduled. Plus.”
According to Floody. we form our baseline for budgeted cost of work scheduled and establish a price for review. GDLS loads a skeleton into its Basis of estimate Input Device (BID) system. pricing links to the data. and actual costs allows the program analysis team to generate cost/schedule status reports at the
. government’s requirements for cost and performance tracking. and other direct cost estimates. The next step was to replace GDLS’s “black box” method of loading baseline data from Open Plan with a direct link to Cobra. Ontario. labor.
GDLS began using Deltek Cobra for proposal pricing in the mid-1990s. and individuals charge the associated work orders to arrive at actual costs of work performed.hours only. which can be modeled in parallel with BID entries. project management team leader and GDLS associate administrator in London. it supported high-end Earned Value Management Systems (EVMS) capabilities compliant with the U. Cobra was the logical choice for its cost performance reporting solution for several reasons. the standard Cobra reports have been well received by internal customers. “So we translated Open Plan data to separate the cost accounts before loading them into Cobra. Once the work breakdown structure and cost class breakouts are deﬁned according to program requirements. like Open Plan. which collects labor. Labor estimates are also taken from the BID system and fed into the schedule. Then. Previously. and schedule data as well as work. the scheduling group feeds the monthly budgeted cost of work performed from the updates provided. and conﬁdence in earned value calculations has soared. and the software lacked forecasting capability beyond manual estimates. The program analysis team uses these numbers during the performance phase. “At this point.S. As the system works now. Diesel Division General Dynamics Land Systems When the basis of estimates are complete and reviewed.” Sometimes the process involves several phases of corrections and negotiations. travel. budgeted cost of work performed.
2009.” concludes Floody. CRM and proposal automation. visit www. budgeting and control.com US & Canada: 800. Herndon.734.000 customers worldwide. integrating all aspects of their businesses. software is only part of the story. All rights reserved.
. and ﬁnance.” explains Gary Caryn. procurement and materials management and project management. billing. Deltek’s clients include Bechtel.456.456. email info@deltek. visit our Web site at www. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting. resource planning. but our ongoing challenge is to set up a process that supports it. All referenced trademarks are the property of their respective owners. CACI. Real cost/schedule integration is an ongoing process that also requires collaboration and coordination between engineering. VA 20171
© 2006 Deltek Systems.com. Herndon. we can then ﬁlter and manipulate the data into formats suitable for distribution to various team members and management. business intelligence.2009 or 703. Deltek Costpoint®.deltek.deltek. project management.” But when it comes to fully automating complex defense projects in an environment with the depth and breadth of GDLS. GDLS intends to automate their entire project management system.
With more than 11. Founded in 1983.
For more information about Deltek. employee time and expense. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations.
For more information about Deltek and our solutions.com
or call 800. GDLS senior scheduler/coordinator. “Using the system’s global editing capability. HOK and Verizon. HR management. Inc.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. Deltek enables companies to maximize proﬁtability and productivity.program and enterprise levels. “Open Plan and Cobra have given us the tools to eventually achieve true cost/schedule integration.
the potential return on investment was worth the challenge. SNC. Senior Program Controls Manager with SNC.®
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. and we’re able to respond more quickly and accurately to our customers. often manual.”
. They also had to take scalability into account. “ “Today. new systems could help SNC improve accountability..
When the word came from the chief executives that managers needed to be accountable for every aspect of scheduling. the Program Support Ofﬁce of SNC went to work.S. and secure its foundation for strategic company growth. and cost performance related to their programs. “We chose Open Plan for scheduling because it worked so well with Cobra and it had the Web-based access via the WelcomHome portal. these hoped-for results became reality. ways of tracking and reporting information.
The challenge was clear. we’re able to see exactly where we are on any program. due to the growing number of SNC subsidiaries and the potential for hundreds of projects active at any given time. was already using Deltek Cobra™ for cost control and earned value management.
A few years later. SNC realized a web portal providing current data from Cobra and Open Plan was crucial. They needed to choose new systems that would be accepted by scores of program managers who were used to their own. Although the challenge was signiﬁcant.
The Beneﬁt With more than 450 employees and 16 locations throughout the U. The ofﬁce also had to ﬁnd a way to make the program schedule and cost information visible throughout the enterprise. the Program Support Ofﬁce needed a comprehensive scheduling and enterprise project management system that would integrate with Cobra. “The Web portal was particularly important to us in terms of program visibility. To meet the executive directive.” says Connie Luna. “This has deﬁnitely contributed to the growth we’re experiencing.” she adds. enhance customer relationships. If done right. resource utilization. thanks to the Welcom products. It was critical for our executives to be able to access all program information in one place. a provider of electronic software and instruments for the defense industry.
“Our CEO keeps close contact with all of our customers. and training systems. By capturing all of this information in Cobra and Open Plan. A privately held company. the ofﬁce can track the actual time. The process begins at the pursuit stage. access information through Deltek WelcomHome™. he can see exactly where we are on the programs. the Proposal/Program Manager loads the schedule into Open Plan. “So we have Open Plan centralized at SNC’s headquarters and accessed through Windows Terminal Services by program managers at the subsidiaries. These pursuits are projected to include labor. Basis of Estimate (BOE) data is also generated from the data loaded into Open Plan.
. With more than 450 employees at SNC.” Luna says. For proposals. SNC realized a Web portal providing current data from Open Plan and Cobra was crucial. Department of Defense and a subcontractor for other prime defense contractors.gives him a snapshot of program health. where probable orders are entered into Open Plan. in addition to the subsidiaries in 16 locations throughout the United States. and the schedule and cost indices) . 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.” The CEO frequently accesses top-level program summaries. he can also drill down into schedule or cost details. and he needs to know the status of programs and any potential issues before the customer brings them to his attention. and expenditures for a program and use those metrics to better determine schedules and costs for future proposals. surveillance.” This allows SNC to have one centralized data repository for all program information across its operations. resources. SNC’s human resource department uses WelcomHome to stay on top of the company’s labor requirements. This view . budgeted cost of work performed. Having the proposal established in Open Plan provides an easy transition for the Program Manager to then move to the program stage. which enables all staff. test. The CEO is not the only senior executive who had very speciﬁc requirements for SNC’s project management solution.(showing budgeted cost of work scheduled. which addresses total expected costs for all work remaining on the contract. based on live data from Cobra. SNC is a contractor for the U. Luna says.” Luna says. actual cost of work performed. instrumentation. and Other Direct Costs (ODCs) requirements. it shows a schedule that is linked to speciﬁc tasks that are linked to speciﬁc resources. in each of these. The CEO also checks summary reports by business area. Then the program is integrated with Cobra to provide the pricing data. The Program Manager reports on status and earned value and updates the Estimate to Complete (ETC). As a result. “The direction from our CFO was that she wanted to see project information not only speciﬁc to SNC. geographically dispersed program managers and team members.S. materials. which include CPI (cost performance index) and SPI (schedule performance index). as well as SNC’s executives. unmanned aerial vehicle (UAV) systems. including any problems. Then he can share that information with customers or show customers how they can access information through the portal. Using a customized Resource Management Report. to access the information quickly. but also speciﬁc to each of the subsidiaries. When the proposal is submitted to the customer. regardless of location. and reconnaissance systems.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. “With visibility through WelcomHome. and intelligence.
and ODBC compliance combined to set Welcom apart from the competition. Herndon.
For more information about Deltek.2009 or 703. Unlike less sophisticated products.com. comprehensive software system that can be customized to ﬁt speciﬁc corporate requirements. PennDOT needed more than a stand-alone project package. visit www.”
With more than 11. Inc. and WelcomHome.” says Jim Sideris. Deltek enables companies to maximize proﬁtability and productivity. senior project manager for KPMG. HOK and Verizon. Deltek Vision® and Deltek GCS Premier® power a myriad of front. Open Plan comes in three editions—Open Plan Professional. It is the most technically advanced client/server project management system on the market. We have accurate cost and schedule information. and subcontractors. which are the lifeblood of SNC’s defense contracts. which assisted PennDOT in the selection process. With the help of Cobra. “We get instantaneous answers to the status of our programs.734. VA 20171
© 2006 Deltek Systems.2009.com
or call 800. budgeting and control. Luna says SNC puts “100 percent emphasis” on its programs.
For more information about Deltek and our solutions.” 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. “Open Plan’s ease of use. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. Deltek’s clients include Bechtel. HR management. “Because the department can have 1.
. integrating all aspects of their businesses. All referenced trademarks are the property of their respective owners. visit our Web site at www. and capacity to determine if any hiring requirements or underutilization issues should be addressed. we can view this through the WelcomHome Web portal. 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. employee time and expense. business intelligence. Deltek Costpoint®. consistent interface. CACI.deltek. using the latest in Microsoft Windows® development technology. and at any point. SNC staff and executives manage the programs in ways needed to ensure success. resource planning. team members.com US & Canada: 800. email email@example.com department reviews labor usage. and Open Plan Enterprise—to serve the different needs and responsibilities of project managers. All rights reserved. Open Plan Desktop.456.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane.000 or more design jobs underway at any one time. These attributes were instrumental in PennDOT’s selection of Deltek software. executives.456. CRM and proposal automation.000 customers worldwide. Herndon. procurement and materials management and project management. Founded in 1983. “With Welcom products. billing. projected usage. Open Plan is a highly integrated.” Luna says. Open Plan.and backofﬁce applications including accounting.
budgeted costs were tracked on Microsoft Excel® spreadsheets. SLAC set itself on a path to implement what would become an award winning PMCS. 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. LBNL. Full program funding was contingent upon successful completion of a management systems review. The project. in SLAC’s case.200-ton particle detector built by a consortium of nine nations. SLAC needed an implementation plan – a plan for the plan.
For the B Factor project to succeed. which began in 1994 and completed in July of 1998. and work package planning (time-phasing the budget and establishing accounting links and performance measurement techniques).®
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. SLAC used disparate Microsoft Project® schedules on stand-alone desktop CPU’s. This made it difﬁcult to perform critical path analyses and allocate resources. managing a project of this magnitude and sensitivity was a daunting opposition. With the help of some powerful tools.5. Actual vs.
. developing an integrated project schedule (to include scheduling methodology and integration of the detailed system and subsystem schedules). Needless to say.
The B Factory at SLAC was created to examine one of nature’s great secrets – why matter exists. which did not provide a true measure of whether a project was on-budget and on-time. comprised two major construction efforts: a two-ring accelerator complex built by a collaboration of SLAC.
For the B Factory project to succeed. This would require identifying interim milestones for infrastructure development (hiring a qualiﬁed staff. SLAC had neither a formal project management system nor the institutional processes and systems to support one.
Before the B Factory project began. which were considerable. 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. and a 1. and LLNL. that included validating the project management control system (PMCS) under DOE Order 4700. For scheduling. evaluating and purchasing software and hardware). SLAC need an implementation plan – a plan for the plan.
The project controls team reached all of its milestones. after ensuring that 100% of the scope was covered and that the network was logic-driven. billing. and resource management. Founded in 1983. employee time and expense.deltek. Jonathan Dorfan.com.
.456. VA-based Deltek is the leading provider of enterprise management software for project-focused organizations. Because managing and reporting on cost was a critical part of the B Factory project. Herndon. HR management. HOK and Verizon. All rights reserved. CACI. onbudget completion of the $293 million project.8606 • UK: +44 (0) 20 7518-5010 Deltek • 13880 Dulles Corner Lane. Then. its open architecture and unmatched ﬂexibility allow seamless integration with many schedule systems. Deltek’s clients include Bechtel. All referenced trademarks are the property of their respective owners. and Primavera P3.734. The team developed a scheduling methodology to ensure proper activity coding for reporting and consistent use of calendars. visit our Web site at www. The AIM team converted the stand-alone Microsoft Project ﬁles into a P3 database. AIM and SLAC chose a solution that married two software packages: Cobra.deltek. and resources for reliable calculations. budgeting and control. After an extensive needs assessment. “We chose AIM because of its reputation for improving bottom-line results by implementing effective project controls systems – including project planning. AIM uploaded this schedule information into the Cobra cost management system. has come on-line smoothly and in record time. Deltek Vision® and Deltek GCS Premier® power a myriad of frontand back-ofﬁce applications including accounting. a leading provider of project management solutions.
For more information about Deltek. visit www. resource planning.2009 or 703. for help in implementing a PMCS for the B Factory project. a powerful cost management system. AIM identiﬁed interfaces with other systems. “The entire B Factory. business intelligence. SLAC approached AIM. In October 2000.The Beneﬁt
In 1994. cost management.” says Jeffrey Chan.” says a SLAC spokesperson.com
or call 800. producing the ﬁrst set of reports from the PMCS in nine months. procurement and materials management and project management. establish performance measurement techniques and assess budget and obligation proﬁles. 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. Deltek enables companies to maximize proﬁtability and productivity. CRM and proposal automation. AIM worked with SLAC’s control account managers to plan work packages. an AIM consultant on the SLAC project.2009. VA 20171
© 2006 Deltek Systems.
With more than 11. email info@deltek. integrating all aspects of their businesses.000 customers worldwide.” says SLAC Director. Inc. units. “The Department of Energy imposed a very aggressive timeline for implementing the PMCS on the B Factory Project. Deltek Costpoint®.456. the DOE honored SLAC with the DOE Director’s Award. Cobra was a natural choice. The implementation procedure went well. acknowledging the on-time.
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access.akamaitech.Third Party Documents
The following links are provided to help you understand new regulations.net/7/257/2422/01jan20061800/edocket.gpo.g.mil/CommunityBrowser.dau.aspx?id=19533
Final FAR ruling: http://a257. The National Defense Industrial Association (NDIA) ANSI EIA 748 Intent Guide https://acc.gcn.htm
News Article: Acquisition councils finalize EVM rule http://www.html