Using Earned Value

Management System
(EVMS)

Briefing for ATC Engineering &

Test Division (ACT-200)
Managers and Leads
 Briefing Objectives
 What is a Project?
 What is a Program?
 What is Project Management?
 What is EVMS?
 Why do we need EVMS?
 How is EVMS Implemented?
 Who will implement it?

February 7, 2
Project Management
Terms - IV
 Project -
• A temporary endeavor
• To create a unique product or service.
 Program -
• A group of related projects - e.g. DSR,
VSCS, URET, STARS, ...as part of NAS
• Managed in a coordinated way - ACT-
200 Coordinating
• Usually include elements of ongoing
operations

February 7, Complements of Project Management Institute

Project Management
Terms - I
 PM is the Application of Knowledge,
Skills, Tools, and Techniques to
Project Activities to Meet or Exceed
Stakeholders’ Needs & Expectations.
• Knowledge of general management
practice & relevant application areas.
 PM overlaps general management in
many areas but they are not
synonymous - e.g DSR vs.
Division/Branch.
February 7, 4
Project Management
Terms - II
 Work Breakdown Structure (WBS): A
deliverable-oriented grouping of
project elements which organizes and
defines the total scope of the project.
Each descending level represents an
increasingly detailed definition of a
project component. Project
components may be products or
services.
February 7, 5
Project Management
Terms - III
 Work Package: Lowest Level of the WBS
that may be Divided into Activities.
 OBS: An Organizational Chart Relating
Work Packages to Organization Units.
 Responsibility Matrix: Relates
Organization Structure to WBS & Ensures
that each Element of the Project’s Scope
of is Assigned to a Responsible Individual.

February 7, 6
Earned Value Management
System (EVMS) - I
 EV - Tool for Measuring Project
Performance
 Compares work actually accomplished
to work planned to determine if cost
& schedule performance is as planned
 EV is an Early Warning System
 Helps management make proactive
decisions to keep projects on course
February 7, 7
Earned Value Management
System (EVMS) - II
 EV Integrates Cost, Scope &
Schedule measurements
 EV Involves Calculating 3 key values
for each activity
• Budget - BCWS
• Actual Cost - ACWP
• Earned Value/Physical Progress - BCWP
 Basis for variance analysis
February 7, 8
 Planning for EVMS - I
 Create a work breakdown structure
 Organize work into discrete work
packages and activities
 Allocate a budget to each of the activities
 Develop a schedule and Assign resources
to accomplish each activity on the
schedule
 Be sure to include all work in the schedule

February 7, 9
 Planning for EVMS - II
 Award performance credit for physical %
complete using any of these methods
 0-100
• Short duration tasks < 160 hours
• EV is Zero until activity is complete
 50-100
• Duration less than 600 hours
• 50% at start of activity & 50% at completion

February 7, 10
 Planning for EVMS - III
 Interim milestone;
• Duration less than 600 hours
• Based on completed milestone for task
 Level of Effort (LOE)
• Long duration & consistent tasks
• Difficult to measure - no deliverables
• Measured by duration of time used e.g. 10
weeks support is 50% complete at 5 weeks

February 7, 11
 Tracking & Analysis
 Each update cycle/Reporting Period
• Monthly or Bi-Monthly
• Obtain physical % complete for each task
• Calculate EV for each task
• Sum up EV for all tasks as project EV
• Calculate actual expenditure for actual
work completed during the period
• Compare the Cumulative EV to Actual
expenditure
February 7, 12
Elements of EV Analysis - I
 Performance indices relate value of
work performed to dollar spent. e.g. CPI
= 0.65 means that for every dollar
spent, actual value of the work
performed is $0.65.
 Cumulative CPI used to forecast project
cost at completion (also slide 17)
 Cumulative SPI used to forecast project
completion date (also slide 17)
February 7, 13
 Elements of EV Analysis -
II
 Cost Variance - Difference between
budgeted cost of work scheduled &
actual cost of work performed
• CV = BCWP - ACWP
 Schedule Variance - Difference between
budgeted cost of work scheduled &
actual cost of work performed
• SV = BCWP - BCWS

February 7, 14
 Elements of EV Analysis -
II
 SPI - BCWP/BCWS
 SPI => 1.0, Project Schedule
performing as planned or better
 SPI < 1.0, Project not performing
as planned - needs help

February 7, 15
Elements of EV Analysis -
III
 CPI - BCWP/ACWP
 CPI => 1.0, Project Cost performing
as planned or better
 CPI < 1.0, Project Cost not
performing as planned - needs help
 % Over/Under Budget - CAC - BCWS

February 7, 16
Project Cost & Schedule
Forecast Methods
 Estimate at Completion (EAC) is
total cost to complete an activity,
work package, or a project
expressed as::
• EAC = Actuals-to-date + Estimate to
complete (ETC)
 Cost EAC - BAC/CPI
 Schedule EAC - BAC/SPI

February 7, 17
 EV Reporting
 Interpret the results of the
calculations - Slides 8 - 11
 Take or recommend corrective
action as necessary

February 7, 18
Conclusion
 EVMS provides management with an
effective
• tool for program planning and control
• early warning system for program mgt.
 EV Integrates Cost, Quality, &
Schedule objectives when
appropriately implemented
 Must a baseline for measurements,
and control at the start of project.
February 7, 19
References
 Project Management Institute (PMI), 1996.
A Guide to the Project Management Body
of Knowledge (the PMBOKTM Guide) -
 Ray W. Stratton, 1999. Improving SPI and
CPI Calculations on LOE Heavy Programs,
Proceedings of the 30th Annual PMI
Seminars & Symposium
 Fleming and Koppeman, 1996. Earned
Value Project Management.

February 7, 20
Thank you for Listening

Pat A. Eigbe, PMP®, -- Hi-Tec

Systems
x. 5-7857