Monitoring Projects

using
Microsoft Project
(August 02- 04, 2022)

Yalam Vaidya
M. Engg., PMP
Earned Value Management (EVM)
An Essential Part of Monitoring Projects
(Day 1)

2
Project Management Process Groups

Initiating

Planning

Monitoring
& Executing
Controlling

Closing
3
Monitoring & Controlling

DEFINITION
Processes required to track, review, and
regulate the progress and performance
of the project; identify any areas in
which changes to the plan are required;
and initiate the corresponding changes.

4
Monitoring
• The project manager monitors all implementation activities to
ensure that the project remains on plan and will achieve its
agreed scope, time, cost and quality objectives.
• Regular reports are produced by the project manager and
communicated to the project team and stakeholders.

• Comprehensive, Accurate, Timely

• What should be measured, when to measure.

Monitor constraints (Budget, schedule, quality et al)

Various ways of Monitoring (Generic)
S-Curve
Cumulative Cost
($ in thousands)
60
DEFINITION

40 $10,000 Negative Var

Cumulative
20 Budgeted Cost
Cumulative
Actual Cost
5 10 15 20 25 30 6 35 40 45 50
Elapsed Time (in weeks)
S-Curve

- Providing real-time tracking information

- Measure performance on time versus budget expenditures

Benefits: Limitations
• Simplicity ???
• Visualization
• Timely reflection
• Continuously updated
S-Curve

Cost

Project S-Curves

Performance Schedule
Milestone Analysis

Milestone:
- Road markers along project life cycle.
- Events or Stages that represent a significant
accomplishment.

Example:
- Completion of a deliverable
- An important activity on critical path
- A special date for project manager
Example : Gantt Chart with Milestones
Milestone Method

Benefits:
- Clarity
- Simplicity

Limitations:
- Reactive rather than proactive
- Lack of timely actions before reaching a milestone.
- May cause further delay due to late reactions.
Tracking Gantt Chart
Tracking Gantt Chart
- Easy to update and understand
- Identifying the stage of completion of each task
has attained by a specific date
- No reflection of costs and budget expenditures
analysis
- No reflection of source of problems in the case of
task slippage
- No methods for future projection of the project
status
Gantt Chart

Cost

Performance Schedule
Tracking Control Charts
Earned Value Management

Jointly considering the impact of project

- Time (Schedule),
- Cost,
- Scope (Performance)

To make projections of the future project status based on current

situation
Earned Value Management

Cost

Earned
Value

Performance Schedule
Earned Value Management (EVM)

DEFINITION

A methodology that combines scope,

schedule, and resource measurements to
assess project performance and progress.

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EVM Example ……………..

 Take an example of painting 10 similar rooms over 10 days @

200/room with a total budget of 2000

 At end of Day 5, if 1000 has been actually spent, it signifies 50%

work complete

 What if at the end of Day 5, only 3 rooms have been painted

 Concept of Earned Value (EV) arises to accommodate this shortfall

What is Earned Value ?

 Earned Value (EV) is the measure of work performed

expressed in terms of the budget authorized for that work.

 EV = % Work completed x Total budget of that work or

package

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Earned Value Terms
• PV (Planned Value) = BCWS (Budgeted Cost of Work Scheduled)
A cost estimate of the budgeted resources scheduled across the
project’s life cycle (Cumulative Baseline)

• EV (Earned Value) = BCWP (Budgeted Cost of Work Performed)

The real budgeted cost (value) of the work that has been performed to
date

• AC (Actual Cost) = ACWP (Actual Cost of Work Performed)

The cumulative total costs incurred in accomplishing the various project
work packages
Earned Value Management (EVM)

Planned Value
PV The authorized budget
EV = % work complete to date x budgeted cost
assigned to scheduled work.

400
Earned Value
EV The measure of work
performed expressed in
terms of the budget 300
authorized for that work.

$ (K)
Actual Cost 200
AC The realized cost incurred
for the work performed
on an activity during a
specific time period. 100

Planned Value (PV) 0

Earned Value (EV) 1 2 3 4 5 6 7 8 9 10 11 12
Actual Cost (AC)
Time (months)

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EVM Measures for Schedule Control

Schedule Variance - a measure Schedule Performance Index - a

of schedule performance measure of schedule efficiency
expressed as the difference expressed as the ratio of EV to PV.
between the EV and the PV.

 A positive SV indicates a project  An SPI number greater than

is ahead of schedule. 1.0 indicates a project is
 A zero SV indicates a project is ahead of schedule.
on schedule.  An SPI of 1.0 means the
 A negative SV indicates a project project is on schedule.
is behind schedule.  An SPI number less than 1.0
indicates a project is behind
schedule.

(SV = EV - PV) (SPI = EV / PV)

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EVM Measures for Cost Control
Cost Variance - the amount of Cost Performance Index - a
budget deficit/surplus at a given measure of the cost efficiency
point in time, expressed as the of budgeted resources
difference between EV and AC. expressed as the ratio of EV to
AC.
 A positive CV indicates a project  An CPI number greater than
is ahead of schedule. 1.0 indicates a project is
 A zero CV indicates a project is ahead of schedule.
on schedule.  An CPI of 1.0 means the
 A negative CV indicates a project project is on schedule.
is behind schedule.  An CPI number less than 1.0
indicates a project is behind
schedule.

(CV = EV - AC) (CPI = EV / AC)

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Estimate at Completion Analysis
Estimate At Completion (EAC) - The current projected final cost of the project.

Calculated from the

Based on the current
following formula, where
spending efficiency (the
BAC is the projected
CPI).
budget at completion:
Estimate at Completion Analysis
Estimate To Complete (ETC) - The amount of money needed to complete the project.

Based on the current

Calculated using the
spending efficiency of the
formula below:
project.
Future Projections

• BAC (Budgeted cost at completion)

Total budget for a project

 EAC (Estimate at Completion) = BAC * AC/EV

Estimated cost of the project at the end of the project.

• VAC (Variance at completion) = BAC - EAC

Variance on the total budget at the end of the project.

 TTC (Time to Completion) = D * PV/EV

where D is the Total estimated duration for a project
EVM Example – Paint Project

Basic Data
PV (Planned Value) = 1000
EV (Earned Value) = 3/10 x 2000 = 600
AC (Actual Cost) = 1000
Schedule Analysis
SPI (Schedule Performance Index) = EV/PV = 600/1000 = 0.6
< 1 Behind Schedule
SV (Schedule Variance) = EV–PV = 600-1000 = - 400
Cost Analysis
CPI (Cost Performance Index) = EV/AC = 600/1000 = 0.6
< 1 Over Budget
CV (Cost Variance) = EV–AC = 600-1000 = - 400
EVM Example – Paint Project

Future Forecasts

BAC (Budget at Completion) = 2000

EAC (Estimate at Completion) = BAC * AC/EV = 2000 * 1000/600
= 3333.33
ETC (Estimate to Completion) = EAC - AC = 3333.33 - 1000
= 1333.33
VAC (Variance at Completion) = BAC - EAC = 2000 – 3333.33
= (1333.33)
TTC (Time to Complete) = D * PV/EV
= 10 * 1000/600
= 16.67
 S Curve
S Curve with Earned
with Earned Value Milestones
Value Milestones
(Figure 1)
 S Curve
S Curve with Earned
with Earned Value Milestones
Value Milestones
(Figure 2)
Earned Value Milestones
Project Status
(Figure 3)

AC
Actual

Cost Overspend
PV EV
Budget

Ahead

Scheduled Performed
Schedule