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Project
Management
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Project management is the discipline
of initiating, planning, executing,
controlling, and closing the work of a
team to achieve specific goals and meet
specific success criteria.
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5 Basic Phases of Project
Management
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Project conception and initiation
.
An idea for a project will be carefully
examined to determine whether or not it
benefits the organization. During this phase, a
decision making team will identify if the
project can realistically be completed.
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Project definition and planning
A project plan or scope may be put in writing,
outlining the work to be performed. During
this phase, a team should prioritize the
project, calculate a budget and schedule, and
determine what resources are needed.
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Project launch or execution
Resources' tasks are distributed and teams are
informed of responsibilities. This is a good
time to bring up important project related
information.
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Project performance and control
Project managers will compare project status
and progress to the actual plan, as resources
perform the scheduled work. During this
phase, project managers may need to adjust
schedules or do what is necessary to keep the
project on track.
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Project close
After project tasks are completed and the client has
approved the outcome, an evaluation is necessary to
highlight project success and/or learn from project
history.
Projects and project management processes vary
from industry to industry; however, these are more
traditional elements of a project. The overarching
goal is typically to offer a product, change a process
or to solve a problem in order to benefit the
organization.
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Earned Value Management
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Earned Value - What is it?
Simply, it is a project monitoring and measurement system that:
1. establishes a clear relationship between planned accomplishments
and actual accomplishments
2. reinforces and rewards good planning practices
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Earned Value - What is it?
Basic concepts of Earned Value Management (EVM)
Each task in a project earns value as planned work is completed
For example (perhaps), if you were paid on this basis, you would earn at
key milestones based on the value of what you have completed (earned
value)
Earned value can be compared to actual cost and budgeted cost to
determine variance and predict future performance
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Earned Value - What is it?
Thebudgeted cost (e.g., peso, person-hours,
person-days, etc.) in terms of your baseline
plan/budget of the work performed up to a
specified point in time
Also known as Budgeted Cost of Work Performed
(BCWP)
BCWP
Each task in the Work Breakdown Structure
(WBS) is assigned a BCWP based on its
individual cost.
Project BCWP is total of BCWP for all tasks
required to complete the project
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Earned Value Components
Planned Value (a.k.a. BCWS)
BCWS
How much work (person-hours) you planned to have
accomplished at a given point in time (this is from the WBS in
your plan)
Actual Cost (a.k.a. ACWP)
ACWP
How much work (person-hours) you have actually spent at a
given point in time
Earned Value (a.k.a. BCWP)
BCWP
The value (person-hours) in terms of your base budget of what
you have accomplished at a given point in time (or, % complete
X Planned Value)
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Earned Value: Example
Actual Cost:
Cost what you Today
d i ng
have actually spent to en
) Sp
this point in time.
n ed
P l an
(
t ed
Cost (Person-Hours)
e
dg
Bu
Planned Value:
Value what your
plan called for sending on
the tasks planned to be
completed by this date.
ing
en
d
a lue
S p
e dV Earned Value:
Value value
al rn
t u Ea (cost) of what you have
Ac
accomplished to date, per
the base plan.
Time (Date)
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Earned Value: Example
Today
d i ng
en
) Sp
n ed
Over P l an
(
Budget t ed
Cost (Person-Hours)
e
dg
Bu
ing
en
d
a lue Behind
S p
e dV
al rn Schedule
t u Ea
Ac
Time (Date)
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Variance
Any schedule or cost deviation from a specific plan.
Used within an organization to verify the budget and schedule
for a project
Frequently used as a key component of plan reviews and
performance measurement
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Variance
Must compare scheduling and budget variance at the same time
Schedule variance:
variance deviations from work planned – not a measure of
changes in cost
Cost variance:
variance deviations from the
budget – not a measure of work scheduled vs. work completed
Example: applying more $$/people to a task may maintain the schedule,
but it adds to cost… schedule on track… over budget on expenses (cost)
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Primary Measurement Methods
Measurable efforts
Discrete increments of work with definable schedule
and tangible results (i.e., real tasks with a
deliverable)
Level of effort
Work that is not discernable in discrete,
discrete measurable
tasks (e.g., project management, training)
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Determining % Complete – When?
Allocate based on time spent – but what if you spend
more time than allocated?
Allocate 50% at start of task, 50% at end
But only for small, discrete tasks
Allocate 100% at start of task
Allocate 100% at end of task
Our approach
Best solution if you keep tasks very small
Allocate value at Critical Milestones
Good solution when using with contract work
Others?
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Earned Value Management
How can you use this information?
Careful analysis of variance and trends
Resetting schedule or budget, when appropriate
Variance Analysis Questions
What is the problem causing the variance?
What is the impact on time, cost and performance?
What is the impact on other efforts, if any?
What corrective action is planned or under way?
What are the expected results of the corrective action?
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Earned Value Management
Extraordinary variance or alarming trends may be
cause for reset or cancellation of a project, but where
do you draw the line?
How much variance to allow depends on a number of
factors:
Life-cycle phase
Length of life-cycle phase
Length of project
Type of estimate
Accuracy of estimate
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Summary
Cost, in the form of Earned Value or BCWP, can
be used to analyze progress of a project
Using Earned Value data to make critical project
decisions must be based on careful analysis of
data, variances and trends
