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by: Daphney Kuhlman


Daphney Kuhlman
GPA 3.68


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This 13 page Class Notes was uploaded by Daphney Kuhlman on Saturday September 12, 2015. The Class Notes belongs to MIST 5740 at University of Georgia taught by Huber in Fall. Since its upload, it has received 78 views. For similar materials see /class/202115/mist-5740-university-of-georgia in Management Information Systems at University of Georgia.

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Date Created: 09/12/15
Software Proiect EVA Tutorial TuTorial on Earned Value ManagemenT SysTems Dennis J Frailey 10 Overview 11 Background In The midsT of a Typical projecT iT is ofTen desirable To esTimaTe such quanTiTies as how much Time is lefTquot or how much of The work is compleTequot ooremind you of Trips in The family car where The children are wondering are we There yeTquot iT is noT surprising JusT as The passengers on a Trip wonder how long iT will Take To geT To The desTinaTion so managers have a responsibiliTy To undersTand how long a projecT will Take To geT To iTs desTinaTion and whaT iT will cosT Those working on The projecT usually wanT To know This Too Earned Value Analysis EVA is a way To measure The amounT of work acTually performed on a projecT ie To measure iTs progress and To forecasT a projecT39s cosT and daTe of compleTion The meThod relies on a key measure known as The earned vaue also known as The budgeTed cosT of worked performedquot or BCWP This measure enables one To compuTe performance indices for cosT and schedule which Tell how well The projecT is doing relaTive To iTs original plans These indices also enable one To forecasT how The projecT will do in The fuTure Earned value acTually uses Three daTa values which are compuTed each week monTh or whaTever oTher period you wish To use We use The Term analysis daTequot To refer To The daTe when The Three values are analyzed Thus if we measure These values monThly an analysis daTe of OcTober 31 would include all values from projecT incepTion unTil The end of OcTober The Three values are c BudgeTed CosT of Work Performed BCWP o BudgeTed CosT of Work Scheduled BCWS o AcTual CosT of Work Performed ACWP Tutorial on Earned Value Management Page 1 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial 12 DefiniTion of The Three Basic Values BCWP or BudgeTed CosT of Work Performed or Earned Value This is The cosT originally budgeTed To accomplish The work ThaT has been compleTed as of The analysis daTe IT answers The quesTion how much work has acTually been compleTedquot BCWS or BudgeTed CosT of Work Scheduled or Plan This is The ToTal budgeTed cosT up To The analysis daTe IT answers The quesTion how much did we plan To spend as of This daTequot A varianT of This quesTion is how much work should have been compleTed by This daTequot BCWS can be compuTed from The projecT39s plans as iusTraTed in The sequel or iT can be approximaTed by mulTiplying The ToTal budgeT by The fracTion of ToTal projecT duraTion aT The analysis daTe Thus for example if The projecT budgeT is 100 and 20 of The projecT39s Time has elapsed The approximaTe BCWS is 20 ACWP or AcTual CosT of Work Performed This is whaT iT acTually cosT To accomplish all The work compleTed as of The analysis daTe IT answers The quesTion how much have we acTually spenTquot This is usually deTermined from The organizaTion39s accounTing sysTem or can ofTen be approximaTed by mulTiplying The number of people by The number of hours or days or weeks worked 13 Derived MeTrics Four measures can be compuTed from The basic values described above 0 Schedule Variance SV 2 BCWP BCWS If H is 0 you are righT on schedule If iT is negaTive you are behind schedule If iT is posiTive you area ahead of schedule 0 Schedule Performance Index SPI BCWP BCWS If H is 1 you are righT on schedule If iT is less Than 1 you are behind schedule If iT is greaTer Than 1 you are ahead of schedule 0 CosT Variance CV BCWP ACWP Tutorial on Earned Value Management Page 2 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial If iT is 0 you are righT on budgeT If iT is negaTive you are over budgeT If H is posiTive you area under budgeT o CosT Performance Index CPI BCWP ACWP If iT is 1 you are righT on budgeT If iT is less Than 1 you are over budgeT If iT is greaTer Than 1 you are under budgeT 20 Using EVA To DeTermine Where you Are 21 UniTs There are many ways To measure quotcosTquot For example we could measure acTual money spenT However iT is common in a work environmenT To measure cosT in Terms of abar ThaT is in work hours or work days spenT Thus The budgeT for a projecT could be 30000 or iT could be 300 labor hours and The amounT spenT so far could be 4500 or H mighT be 45 labor hours EVA can be used wiTh any measure of cosT buT H is imporTanT To decide which one To use We will use an example in dollars in This secTion and an example in work days in The sequel 22 An Example using Dollars Suppose you are making cookies for a large parTy To be held Tomorrow Suppose The following are your plans Plans 40 cookies per baTch 5 baTches per hour 200 cookies Schedule 5 hours To make a ToTal of 1000 cookies BudgeTed cosT per cookie is 005 ToTal budgeT is 5000 for cookie ingredienTs or 10 per hour We39ll use earned value To examine our progress Progress ReporT aT End of Hour 1 o 150 edible cookies have been made some were burnT and had To be Thrown away 0 ToTal acTual cosT of ingredienTs used so far is 900 ACWP Tutorial on Earned Value Management Page 3 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial Analysis BCWS 1000 BCWP 750 Earned Value 150 cookies x 05 per cookie ACWP 900 from above Therefore SV BCWP BCWS 250 you are behind schedule SPI BCWP BCWS 075 you are running aT 75 of The planned schedule CV BCWP ACWP 750 900 150 you are 150 over budgeT CPI BCWP ACWP 0833 you are running over budgeT by abouT 17 30 Using EVA To ForecasT 31 AddiTional Terminology and DefiniTions Five addiTional Terms will be used in forecasTing BAC BudgeT AT CompleTion ToTal Original BudgeTed CosT This is The same as BCWS aT compleTion 0 EAC EsTimaTe AT CompleTion your esTimaTe of The amounT of money you will spend on The projecT This is based on your JudgmenT IEAC IndependenT EsTimaTe AT CompleTion ProjecTed final cosT of The projecT based on performance so far IEAC can be forecasT using The following formula IEAC BAC CPI ISAC IndependenT Schedule AT CompleTion ProjecTed duraTion of The projecT based on performance so far ISAC can be forecasT using The following formula ISAC 2 Schedule SPI o VAC Variance AT CompleTion ForecasT of final cosT variance BAC IEAC or if you prefer VAC 2 BAC EAC 32 ForecasTing The Cookie BudgeT and Schedule IEAC BAC CPI 50 0833 60 VAC 2 BAC IEAC 50 60 10 10 over budgeT ISAC 5 SPI 5 075 667 hours Tutorial on Earned Value Management Page 4 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial In oTher words you forecasT ThaT iT will Take 6 23 hours and 60 To make The cookies if your success aT making Them does noT improve STripped of all The verbiage imagine someone Telling you aT The raTe you are going H is going To Take you all day and iT will cosT more Than you bargained forquot EVA enables you To say ThaT in more precise Terms Perhaps for making cookies such precision is noT essenTial alThough if The predicTion was 44 hours you would have someThing To worry abouTl BUT for running an expensive projecT EVA can be very helpful even essenTial 40 Can we CaTch Up 41 ToCompleTe Performance Index Once we reporT ThaT our projecT is behind schedule or over budgeT The nexT quesTion is usually can we do someThing To geT back on Trackquot Can we meeT The desired schedule and budgeT despiTe The facT ThaT we are running behind Two indices are compuTed To help deTermine This The ToCompleTequot performance index is an indicaTion of how we musT perform for The duraTion of The projecT in order To meeT our desired cosT goal If TCPI is greaTer Than 1 we musT perform beTTer Than planned in order To meeT The goal and if less Than 1 we can geT by wiTh performing under our plan TCPI BudgeTBCWP EACACWP where EAC is The amounT we esTimaTe we will spend Looking closely we see ThaT The numeraTor is how much work is lefT To do and The denominaTor is how much we have lefT To spend NoTe Too ThaT if EAC is simply IEAC Then The TCPI is The same as The CPI ie iT indicaTes ThaT if we do noT change our performance IEAC is The correcT esTimaTe of our final cosT Exercise for The reader prove maThemaTically ThaT if EAC IEAC Then CPI TCPI We menTioned Two indices A schedule index can also be developed This is lefT as an exercise for The reader 42 ApplicaTion To The Cookie Example In The cookie example suppose we wanT To finish aT exachy The 50 budgeT Then TCPI 2 5000750 5000900 2 42504100 2 1036 This means ThaT we musT perform aT 1036 of The originally planned performance in order To do This Ie 36 higher performance Than originally planned This may be Tutorial on Earned Value Management Page 5 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial reasonable because we were able To geT The firsT 200 cookies in The oven for only 9 insTead of The budgeTed 10 BuT if TCPI had been 15 we would know ThaT we were in budgeT Trouble unless we can somehow geT our supplies aT a subsTanTial discounT over The plan 50 Using EVA on a ProiecT 51 The Micro Schedule IdenTifying The Tasks There are many ways To use EVA on a projecT buT The meThod we will illusTraTe here is one of The easiesT and musT useful We begin wiTh a micro schedule a schedule of small Tasks whose duraTion can be measured in days or weeks Typically a micro schedule applies To a porTion of a projecT and is esTimaTed by Those doing The work ofTen JusT before They begin ThaT porTion of The projecT figure 1 Top Level Schedule Phase2 dee Cl Micro Schedule is The NexT Phase The locally managed schedule defined by Those ll doing The work Figure 1 EVA Micro Schedule The micro schedule represenTs The work Tasks quotinchsTonesquot required To do The Job as well as who is assigned To do each Task and Their esTimaTes of The efforT required Each Task musT have 0 objec ve comparia crfera so you really know when They are done 0 quotbudgetsquot or quotvaluesquot usuay represenfed as person days of effam or doars of cosf o planned campe an dafes so you know when you expecT Them To be done Table 1 illusTraTes a Typical micro schedule Tutorial on Earned Value Management Page 6 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial Table 1 Micro Schedule for Coding Phase Projecl XXX Eslimaled Responsible Efforl Planned Complelion Dale Soflware M work days week 1 Developergsl Sel Up 3 1 Joe Gel Specs 2 2 Mary Design Oulpul 10 5 Pele amp Joe Plan Tesls 3 6 Joe Wrile Code 5 7 Mary Unil Tesl 3 8 Joe Inlegrale 2 9 Mary Bela Tesl 3 10 Pele TOTAL 31 The approach illuslraled above relies on lhe Judgmenl of lhe parlicipanls bul if lhe organizalion is al SEI CMM level 1 or 2 il may nol ulilize any informalion from pasl projecls olher lhan lhe experience of lhe parlicipanls In an organizalion al CMM level 3 lhe micro schedule mighl be defined by using lhe organizalion39s lailored process Al level 4 or higher il mighl be defined by using lhe process lhe Judgmenl of lhe parlicipanls and pasl performance dala 52 Compuling lhe Efforl Planned BCWS The efforl planned is delermined by calculaling from lhe micro schedule how much work will be compleled by lhe end of each week Table 2 illuslrales a lypical BCWS charl Tutorial on Earned Value Management Page 7 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial Table 2 BCWS for Coding Phase ProjecT XXX ShorThand BCWS Week ToTal Value ThaT we Plan To Earn by ThaT Week ToTalweek 1 3 3 2 5 6 3 7 9 4 11 12 5 15 15 6 18 19 7 23 22 8 26 25 9 28 28 1o 31 31 Assumes parTial progress on design oquuTquot Task 53 CollecTing Earned Value Each Week Each week during The projecT The Team needs To indicaTe aT The end of The week which Tasks are compleTe and Therefore how much value has been earned The example shown in Table 3 gives parTial crediT for some Tasks IT is recommended ThaT parTial crediT only be allowed for larger Tasks and Then only in large chunks 13 or maybe Table 3 Earned Value DaTa Week ending OcT 29 1999 ProjecT XXX Task EfforT value work days CompleTe Earned SeT Up 3 100 3 GeT Specs 2 50 1 Design OquuT 10 25 25 Plan TesTs 3 0 0 WriTe Code 5 0 0 UniT TesT 3 0 0 InTegraTe 2 0 0 BeTa TesT 3 0 0 TOTAL 31 65 BCWP BCWP or earned value is The ToTal of The quotearnedquot column on The righT hand side Table 3 is recompuTed each week whereas Tables 1 and 2 need only be done once BCWP will increase each week as The projecT progresses AT any given week you have The BCWS from Table 2 and The BCWP from Table 3 ACWP is whaTever number of persondays of work have acTually been paid for This is simply The week number mulTiplied by 5 ToTal days worked mulTiplied Tutorial on Earned Value Management Page 8 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial by The number of people if everyone works full Time on JusT This projecT If people share Their Time beTween projecTs or work on nonprojecT acTiviTies Their acTual work hours spenT on The projecT musT be deTermined proporTionally 54 Analyzing The Sample ProjecT Suppose Table 3 represenTs The resulTs aT The end of week 3 on The sample projecT Suppose The sTaff did noT work 100 on This projecT so ThaT only a ToTal of 10 work days have acTually been spenT on The projecT Then BCWS 7 work days from Table 2 BCWP 65 work days from Table 3 ACWP 10 work days from paragraph above Then SV BCWP BCWS 50 you are behind schedule SPI BCWP BCWS 0928 you are running aT abouT 93 of The planned schedule CV BCWP ACWP 65 10 350 you are 35 sTaff days over budgeT CPI BCWP ACWP 065 you are running over budgeT by abouT 35 ForecasTs IEAC BAC CPI 2 31065 477 work days VAC 2 BAC IEAC 31 48 17 17 work days over budgeT ISAC 10 SPI 10 0928 107 work weeks In shorT your projecT looks like iT will come in abouT a week laTe and 35 over budgeT WhaT should you do now AT This poinT Things look preTTy dismal for meeTing The cosT budgeT You need To ask yourself These quesTions 0 Why is H Taking more efforT Than planned 0 Did They underesTimaTe The Job 0 Are They losing Too much producTiviTy because They are being shared beTween This projecT and someThing else 0 Were There unforseen obsTacles and if so have They been correcTed o Is There some oTher reason 0 Was work performed on oTher Tasks buT noT enough To claim parTial crediT yeT on Table 3 Maybe Things aren39T quiTe as bad as They look Tutorial on Earned Value Management Page 9 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial The key poinT here is ThaT EVA enables you To spoT a poTenTial problem early in The projecT and do someThing To correcT The siTuaTion You can also re esTimaTe The ToTal projecT duraTion and cosT aT This poinT or negoTiaTe changes in The projecT wiTh your managemenT 60 A Problem wiTh SPI 61 The Problem If a projecT runs longer Than originally scheduled cosT esTimaTing porTions of EVA conTinue To be useful buT The schedule esTimaTion porTions begin To fail The definiTions of SV SPI and SAC do noT work as described above InsTead They begin To converge Toward quoton schedulequot values and when The projecT is compleTe They show values of SPI 1 SV 2 O and SAC whaTever The acTual schedule Turns ouT To be This flaw in earned value analysis resulTs from The facT ThaT The schedule esTimaTes are based on budgeTs raTher Than independenT evaluaTions of The schedule 62 Possible SoluTions One opTion is To use The values of SV SPI and SAC only unTil The originally scheduled compleTion daTe and noT use Them afTerwards This opTion is simple and iT works well in many cases when The main concern is budgeT overruns raTher Than schedule overruns or when The schedule overruns are noT very large AnoTher opTion is To reesTimaTe The schedule and base all fuTure calculaTions on This new schedule In effecT This is whaT auTomaTically happens wiTh EVA in The end The new schedule is whaTever The acTual schedule happens To be Of course wiTh This approach you never have a very good meThod of predicTing how much The schedule overrun will be A Third opTion is To develop a new index DPI or Delivery Performance Index as an alTernaTive To SPI DPI is based on The original compleTion schedules of The individual work Tasks The specific Terms and formulas are as follows 0 AcTual Time The Time acTually spenT so far in calendar days 0 Days Ahead how many days ahead of schedule you are negaTive if behind schedule This can be derived from The original schedules of The individual work Tasks 0 DPI delivery performance index DPI AcTual Time Days Ahead AcTual Time Tutorial on Earned Value Management Page 10 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial This is harder To do and many accounTing sysTems do noT have a mechanism for keeping Track of The necessary informaTion FurTher definiTion can be found in Hudec 1996 in The references Working ouT how To use DPI insTead of SPI is a good exercise for The reader 70 References BenT James A 1982 Applied CosT and Schedule ConTrol New York NY Marcel Dekker Inc Brandon Daniel M 1998 June quotImplemenTing Earned Value Easily and EffecTivelyII Pro 39ecT ManagemenT Journal Vol 29 Number 2 ChrisTensen David S Comprehensive Bibliography of Earned Value LiTeraTure hTTpwwwuwfedudchrisTeevbibhTm Horan Ron and Don McNichols 1990 SepTember quotProJecT ManagemenT for Large Scale SysTemsII Business CommunicaTions Review 201924 Hudec Jim Gayla SuddarTh eT al Experiences in ImplemenTing QuanTiTaTive Process ManagemenTquot Proceedings of The SEI SofTware Engineering Process Group Conference May 1996 Mahler Fred and Mark Mazina 1982 February quotEarned Value ReporTing Earns ITs KeepII CosT Engineering 241317 Nichols John M 1990 quotProJecT ConTrolquot ChapTer 15 of Managing Business and Engineering Pro 39ecTs Englewood Cliffs NJ PrenTice Hall Niemann William J 1982 MayJune quotIf The Pharaoh had Only Used an Earned Value SysTem in Building The Pyramidsll Program Manager 1115 Ruskin Arnold M 1995 SepTember quotMeasuring ProjecT Performance AccepTably Small Inchpebblesll Enqineerinq ManaqemenT Journal 75 10 Tutorial on Earned Value Management Page 11 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial Appendix An Earned Value Exercise ObjecTive The objecTive of This exercise is To compuTe earned value meTrics and use Them To evaluaTe a projecT Background Read The Tufaria an Earned Value Managemenf SysfemsThaT accompanies This exercise Consider The projecT described in secTion 5 of The TuToriaI Suppose The Table on The nexT page is an updaTed version of Table 3 noTe ThaT ACWP is shown aT The boTTom Task 1 Fill in The values for BCWP SV SPI CV CPI IEAC VAC SAC and TCPI for each of weeks 16 use The space provided in The shaded porTion of The Table Task 2 On The asT page of This exercise draw a line graph of BCWS BCWP and ACWP for each week Ie The horizonTaI axis is week sTarTing aT 0 and going To 12 and The verTicaI values are in uniTs of work days There will be Three lines BCWS BCWP and ACWP ExTend BCWS To week 10 To show The original plan for compIeTing The 31 uniTs of work Task 3 Considering These meTrics and graphs indicaTe wheTher The projecT is ahead of or behind schedule and over or under budgeT as of week 6 and indicaTe whaT you believe The final cosT and schedule will be PuT Those answers here The projecT is 39 J 39 and budgeT Final CosT is projecTed To be because explain why here Final Schedule is projecTed To be because explain why here Deliverable A copy of This exercise in which you have filled in The answers To The various quesTions ThaT are posed in The Tasks above and The Table and space below PuT The answers exacTIy where indicaTed above Tutorial on Earned Value Management Page 12 Copyright 19992001 Dennis J Frailey All Rights Reserved Software Proiect EVA Tutorial Table Earned Value Se r Up Ge r Specs Design Plan Tes rs Wr i re Code Uni r Tes r Integrate Bela Tes r TOTAL BCWS BCWP ACWP 5V SPI CV Tutorial on Earned Value Management Page 13 Copyright 19992001 Dennis J Frailey All Rights Reserved


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