Project Management

The Nature of Project Management

Why do many talented developers and IT professionals consider project management to be an obstacle, rather than an enabler? Why do clients often resist project oversight or try to minimize it? Does project management really allow projects to reach completion more quickly, or are speed and project discipline mutually exclusive?

We’ve explored the balance of speed and delivery and the nature of innovative projects in recent articles. Let’s tie these themes together and review techniques that help keep project management relevant to even the most unique and innovative programs.

Project bureaucrats

When I teach project management, I often draw a distinction between project managers and project bureaucrats. We’ve all had encounters with project managers who turned into bureaucrats. Project bureaucrats are more interested in ensuring that every step of the methodology is applied and every line of every form is filled in than in what’s actually happening on the ground. On the other hand, it’s common to meet project managers who apply minimal project methodology, yet, through their expert use of relationships and personal interactions, always seem to know exactly where the project stands.

In my experience, it’s the project bureaucrats who often leave a bitter taste with both the delivery team and the client. These project managers turned bureaucrats have forgotten one of the key rules of project management: don’t mistake the map for the journey. All the plans, charts, and milestones mean nothing if they aren’t consistent with the reality on the ground. And there’s the rub; especially in innovative projects, the plans and estimates are often based on a fallacy — there’s the idea that we can predict the progress of something that’s never been done before.

Project spec compliance = success? Not always

In his outstanding book Agile Project Management, Jim Highsmith offers two examples that emphasize the point. The movie Titanic, from a project management perspective, was a huge failure — over budget, over schedule, and plagued by unforeseen risks that threatened to derail the project at every turn. Motorola’s Iridium project, which spent billions of dollars launching satellites into orbit in order to make telephone service available worldwide, was a great project management success. Yet the market is the ultimate judge, and the project management compliance of Motorola’s venture didn’t save the project from failure, nor did the project management disaster (no pun intended) of Titanic’s production taint the film’s appeal to the public.

The lesson that project managers should learn from these examples is that compliance with project specifications does not constitute project success; in the ultimate analysis, only business results matter. Stated another way, the largest risk in any project is not that it will deviate from plan; it’s the risk that the final outcome won’t fulfill the real need. Predictive methodologies, such as the techniques championed by the Project Management Institute in its PM Body of Knowledge, can add tremendous value, especially for projects for which we have a historical basis to look to for precedent. For truly innovative projects, in which any prediction is little more than guesswork and for which we’ll be inventing never-before-seen products, we need to look for a new approach. Hence, the growing popularity of agile approaches.

Agile myths and truths

The central insight of agile methods is not that project overhead is a pain in the neck or that programmers like to be free; instead, it is the observable truth that, especially in innovative programs, customers can’t describe what they want until they see it, and prediction is inappropriate when there’s no way to visualize what the final result will be, let alone exactly how long it will take to build.

Unlike predictive methods, in which the planning, estimating, and risk assessment activities are all front-loaded and often are seen as a separate “planning” phase, agile approaches assume that the requirements will grow incrementally and iteratively as the project proceeds. This emphasis on “just enough” planning and requirements discovery is an acknowledgement of the fact that the key up-front activity in an agile approach is the creation of the first iteration of the product, so that the sponsor can see it and touch it, and discrepancies between the sponsor’s vision and the product created by the team can be modified to fulfill the current business need.

Agile project management is often misunderstood, as illustrated by the proliferation of articles about “agile myths.” Agile methods are not about “buying pizza and getting out of the way,” as these methods are often caricatured. Agile methods, from SCRUM to Highsmith’s APM Framework, are disciplined and structured approaches to product development, just as predictive methods are; these methods just address different types of problems.

Predictive and agile approaches have robust requirements discovery techniques, but agile methods acknowledge that requirements will evolve throughout the life of the project rather than up-front. Both approaches have stakeholder participation practices, but agile methods insist that stakeholders and sponsors are involved throughout the project in a collaborative, interactive manner. Predictive and agile both have mechanisms for integrating changing requirements into the plan, but the approaches use different techniques. Predictive techniques often apply restrictive change management procedures. Agile methods are specifically designed to encourage and implement beneficial change by providing an iterative, incremental approach to development focused on implementing, rather than controlling, positive change.

Innovative projects call for innovative methods, but that doesn’t imply, as many agile skeptics insist, that the benefits gained by applying structured project management techniques must be abandoned. Agile approaches are appropriate for creative, inventive projects because the methods integrate exploratory, collaborative techniques into the project process and acknowledge the mutating nature of exploratory IT projects into the PM methods we apply. Even PMI, in its newly published Body of Knowledge, recognizes the value of the iterative, incremental approaches advocated by agile proponents.

More to come

In subsequent columns, we’ll dig a bit deeper into the specifics of some of these techniques and explore ways that agile approaches can be combined with familiar, predictive techniques to apply exactly the right level of rigor to the project, no matter where it falls on the innovation spectrum.

Get weekly PM tips in your inbox
TechRepublic’s IT Project Management newsletter, delivered on Wednesday, offers tips to help keep project managers and their teams on track. Automatically sign up today!

Rick Freedman is the author of three books on IT consulting, including “The IT Consultant”. Rick is a Director in the Global Services Division of NEC America, and a trainer and course developer in the Agile Project Management practice of ESI, the international PM training company.

May 28, 2009 Posted by | Communications Management, earned value, PMBOK, PMI, PMO, Project Management | | Leave a comment

Using Earned Value to Predict Your Project’s Success

This Post examines how the data points of Planned Value (PV), Earned Value (EV), and Actual Cost (AC) can be used to analyze the current status of a project and forecast its likely future. EVM looks at project performance for the current period and at cumulative performance to date. EVM is described and illustrated here in terms of cumulative data, using the Project data.

This post introduces a fourth data point, Budget at Completion (BAC), which is the final data point on the performance measurement baseline (PMB). Budget at Completion represents the total Planned Value for the project. For Project EZ, the BAC is 150.

This is a goof rule of thumb:

• If your SV >0 and your SPI > 1.0, you are ahead of schedule and under budget. If your SV = 0 and your SPI > 1.0, you are on budget and ahead of schedule. If your SV < 0 and your SPI 0 and your SPI > 1.0, you are ahead of schedule and under budget. If your SV = 0 and your SPI > 1.0, you are on budget and ahead of schedule. If your SV < 0 and your SPI < 1.0 you are behind in budget and schedule.
• Indices: Schedule Performance Index (SPI); Cost Performance Index (CPI); and To-Complete Performance Index (TCPI)
• Forecasts: Time Estimate at Completion (EACt); Estimate at Completion (EAC); and Estimate to Complete (ETC)

These variances, indices, and forecasts can be used to answer the key project management questions. It lets us show the relationship between those project management questions and the EVM performance measures.

Schedule Variance (Are we ahead or behind schedule?)
The Schedule Variance (SV) determines whether a project is ahead of or behind schedule. It is calculated by subtracting the Planned Value (PV) from the Earned Value (EV). A positive value indicates a favorable condition and a negative value indicates an unfavorable condition.

The Schedule Variance can be expressed as a percentage by dividing the Schedule Variance (SV) by the Planned Value (PV). In other words, the project is 33 percent behind schedule, meaning that 33 percent of the planned work has not been accomplished.

Schedule Performance Index (How efficiently are we using time?)
The Schedule Performance Index (SPI) indicates how efficiently the project team is using its time. SPI is calculated by dividing the Earned Value (EV) by the Planned Value (PV). The Schedule Performance Index indicates that—on average—for each 8-hour day worked on the project, only 5 hours and 20 minutes worth of the planned work is being performed; that is, work is being accomplished at 67 percent efficiency. This is a very useful statistic to use in resource allocation.

Time Estimate at Completion (When are we likely to finish work?)

Using the Schedule Performance Index (SPI) and the average Planned Value (PV) per unit of time, the project team can generate a rough estimate of when the project will be completed, if current trends continue, compared to when it was originally supposed to be completed.

The originally estimated completion time for the project was 12 months, so the project manager now knows that if work continues at the current rate the project will take six months longer than originally planned. It is important to note that this method generates a fairly rough estimate and must always be compared with the status reflected by a time-based schedule method such as critical path method. It is possible that an earned value analysis could show no schedule variance and yet the project is still behind schedule; for example, when tasks that are planned to be completed in the future are performed ahead of tasks on the critical path.

One trick I always use is to have the engineers update their time on the project daily. This is quite normal. But I also have them update the remaining time that task will take. If the original estimate was 40 hours, and the engineer spent 20 hours on it, that does not mean he is 50% done. Software is very hard to predict and new things are learned as one gets deeper in the project. So if the culture allows the engineers to update their remaining work every day, I can run Project scenarios to see if the critical path has changed. I can also have a discussion with the engineer to see if we can work smarter to pull in the estimate. Most of the time, we don’t spend enough time estimating a project and just jump in and write code. This mode usually bites you in the end.

Next I will show an example I found using the techniques I’ve written about in this post.

earned-value1

December 27, 2008 Posted by | earned value | , , , , , | 8 Comments

Using EVM as a Performance Management Methodology

As a performance management methodology, EVM adds some critical practices to the project management process. These practices occur primarily in the areas of project planning and control, and are related to the goal of measuring, analyzing, forecasting, and reporting cost and schedule performance data for evaluation and action by workers, managers, and other key stakeholders.

 

In the planning process, the means for assessing physical work progress and assigning budgetary earned value needs to be established. In addition to routine project management planning, earned value measurement techniques are selected and applied for each work task, based on scope, schedule, and cost considerations.

 

In the project execution process, EVM requires the recording of resource utilization (i.e., labor, materials, and the like) for the work performed within each of the work elements included in the project management plan. In other words, actual costs need to be captured in such a way that permits their comparison with the performance measurement baseline.

 

In the project control process, EVM requires that physical work progress be assessed and budgetary earned value be credited (using the selected earned value measurement techniques), as prescribed in the project management plan. With this earned value data, the planned value data from the performance measurement baseline, and the actual cost data from the project cost tracking system, the project team can perform EVM analysis at the control account and other levels of the project work breakdown structure, and report the EVM results as needed.

 

During the project planning process, EVM requires the establishment of a performance measurement baseline (PMB). This requirement amplifies the importance of project planning principles, especially those related to scope, schedule, and cost. EVM elevates the need for project work to be executable and manageable and for the workers and managers to be held responsible and accountable for the project’s performance. Project work needs to be broken down—using a work breakdown structure—into executable tasks and manageable elements often called control accounts. Either an individual or a team needs to manage each of the work elements. All of the work needs to be assigned to the workforce for execution using an organization breakdown

structure (OBS).

 

In the planning process, the means for assessing physical work progress and assigning budgetary earned value also needs to be established. In addition to routine project management planning, earned value measurement techniques are selected and applied for each work task, based on scope, schedule, and cost considerations.

 

In the project execution process, EVM requires the recording of resource utilization (i.e., labor, materials, and the like) for the work performed within each of the work elements included in the project management plan. In other words, actual costs need to be captured in such a way that permits their comparison with the performance measurement baseline.

 

In the project control process, EVM requires that physical work progress be assessed and budgetary earned value be credited (using the selected earned value measurement techniques), as prescribed in the project management plan. With this earned value data, the planned value data from the performance measurement baseline, and the actual cost data from the project cost tracking system, the project team can perform EVM analysis at the control account and other levels of the project work breakdown structure, and report the EVM results as needed.[1]

 

 

 


[1] ©2005 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA 5

 

October 10, 2008 Posted by | earned value, Performance Management | , , , | 1 Comment

Using EVM with Microsoft Project Server

Earned Value is a measure of work performed. Techniques for measuring work performed are selected during project planning and are the basis for performance measurement during project execution and control.

 

Often in my career as a Project Manager, I have used Earned Value Measurement by utilizing Microsoft Project Server. It has all the fields you need to accurately report on the Earned Value of a project. As I have said in previous posts, I have my team members not only update their expended time each day but also the remaining work. Microsoft Project can do all the work to adjust the schedule and tell you where your new critical path is. This gives you time to make adjustments to the project before it gets any worse.

 

The performance of separate and distinct work effort that is related to the completion of specific and tangible end products or services, and which can be directly planned and measured, is called discrete effort. In comparison, effort applied to project work that is not readily divisible into discrete efforts for that work, but which is related in direct proportion to measurable discrete work efforts, is called apportioned effort, and support-type activity that does not produce definitive end products is referred to as level of effort.

October 2, 2008 Posted by | earned value | , | 4 Comments

Basic Concepts of Earned Value Management

 

Planned Value (PV): describes how far along project work is supposed to be at any given point in the project schedule. It is a numeric reflection of the budgeted work that is scheduled to be performed, and it is the established baseline (also known as the performance measurement baseline or PMB) against which the actual progress of the project is measured. Once established, this baseline may only change to reflect cost and schedule changes necessitated by changes in the scope of work. In previous versions of the PMBOK this was known as the Budgeted Cost of Work Scheduled (BCWS). Planned Value is usually charted showing the cumulative resources budgeted across the project schedule.

 

Earned Value (EV): is a snapshot of work progress at a given point in time. In previous versions of the PMBOK it was called the Budgeted Cost of Work Performed (BCWP).  EV reflects the amount of work that has actually been accomplished to date (or in a given time period), expressed as the planned value for that work.

 

Actual Cost (AC): which was previously called Actual Cost of Work Performed (ACWP), is an indication of the level of resources that have been expended to achieve the actual work performed to date (or in a given time period). It can indicate that the organization has spent more or less than it planned to spend to achieve the work performed to date.

 

DERIVATIONS OF THE BASIC EVM ELEMENTS

 

Planned Value (PV): The work planned for Project EZ, is the basis for the Planned Value and the performance measurement baseline for the project. This work plan establishes a time-phased budget for each task in the project. For example, a Task may have a budget of 48 resource units, which are phased over a four-month period. The plan for the next task calls for varying increments of Planned Value to be earned in each month of the task. As the planned work is accomplished, its budgeted cost becomes Earned Value.

 

Tasks may be planned and measured in whatever resource units are most suitable to the work, including labor hours, material quantities, and the monetary equivalent of these resources. As discussed in the next section, however, performance management works best when the physical progress of work is objectively planned and measured.

The techniques used in EVM to achieve this goal are Earned Value measurement techniques (sometimes called earning and crediting methods).

Earned Value is a measure of work performed. Techniques for measuring work performed are selected during project planning and are the basis for performance measurement during project execution and control. Earned Value (EV) techniques should be selected based on key attributes of the work, primarily 1) the duration of the effort and 2) the tangibility of its product.

 

The performance of separate and distinct work effort that is related to the completion of specific and tangible end products or services, and which can be directly planned and measured, is called discrete effort. In comparison, effort applied to project work that is not readily divisible into discrete efforts for that work, but which is related in direct proportion to measurable discrete work efforts, is called apportioned effort, and support-type activity that does not produce definitive end products is referred to as level of effort. Work performance is measured periodically, such as weekly or monthly. The EV technique selected for measuring the performance of discrete effort will depend on its duration and the number of measurement periods it spans. Discrete efforts that span one to two periods are often measured with fixed formula techniques, where a fixed percentage of work performance is credited at the start of the work and the remaining percentage is credited at the completion of the work. Discrete efforts of longer duration (greater than two periods) are measured with other techniques, including those known as weighted milestone and percent complete.

 

Fixed Formula

A typical example of fixed formula is the 50/50 technique. With this method, 50% of the work is credited as complete for the measurement period in which the work begins, regardless of how much work has actually been accomplished. The remaining 50% is credited when the work is completed. Other variations of the fixed formula method include 25/75 and 0/100. Fixed formula techniques are most effectively used on small, short-duration tasks.

 

Weighted Milestone

The weighted milestone technique divides the work to be completed into segments, each ending with an observable milestone; it then assigns a value to the achievement of each milestone. The weighted milestone technique is more suitable for longer duration tasks having intermediate, tangible outcomes.

 

Percent Complete

The percent complete technique is among the simplest and easiest, but can be the most subjective of the Earned Value measurement techniques if there are no objective indicators to back it up. This is the case when, at each measurement period, the responsible worker or manager makes an estimate of the percentage of the work complete. These estimates are usually for the cumulative progress made against the plan for each task. However, if there are objective indicators that can be used to arrive at the percent complete (for example, number of units of product completed divided by the total number of units to be completed), then this can be a more useful technique.

 

Apportioned Effort

If a task has a direct, supportive relationship to another task that has its own Earned Value, the value for the support task may be determined based on (or apportioned to) the Earned Value of the reference base activity.

 

Examples of proportional tasks include quality assurance and inspection activities. Using the apportioned effort technique, the project manager might determine that the Planned Value for the quality assurance task is 10% of the value of the main task. The total apportioned Planned Value for the quality assurance effort related to Task 2, therefore, would be 4.8 or 10 percent of 48 (which is the Planned Value for Task 2). Earned Value for each measurement period would be assigned for the quality assurance component in direct proportion to the Earned Value assigned for Task 2.

 

Level of Effort

Some project activities do not produce tangible outcomes that can be measured objectively. Examples include project management and operating a project technical library. These activities consume project resources and should be included in EVM planning and measurement. In these cases, the level of effort (LOE) technique is used for determining Earned Value. A Planned Value is assigned to each LOE task for each measurement period. This Planned Value is automatically credited as the Earned Value at the end of the measurement period. LOE should be used only when the task does not lend itself to a technique that actually measures physical work progress. LOE tasks have no schedule variance and bias the project data toward an on-schedule condition. They also can reflect misleading cost variances if they are not executed with the human resources on whom the cost estimates and planned values in the performance measurement baseline are based.

 

Earned Value

While value is planned and measured using the Earned Value techniques outlined above, value is earned by accomplishing the planned work. Earned Value is credited when progress is demonstrated in accordance with the Earned Value technique selected for the planned work. For discrete work, observable evidence of a tangible product or progress is required.

 

Actual Cost

To determine Actual Cost, an organization needs to have in place a system for tracking costs over time and by project component. The sophistication and complexity of this system will vary by organization and project, but, at a minimum, some type of cost tracking system must be in place that can tie costs to the plan and to the way Earned Value is credited.

 

PUTTING IT ALL TOGETHER

Once Planned Value, Earned Value, and Actual Cost have been determined, a manager can use these data points to analyze where a project is and forecast where it is headed.[i]

 


[i] Guide to the Project Management Body of Knowledge (PMBOK@ Guide) Third Edition @2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA

September 23, 2008 Posted by | earned value | , , | Leave a comment

Uses of Earned Value Management to Save the Project

 As a Project Manager, I use the Earned Value Management (EVM) technique. It answers questions such “am I on schedule”, “have I met my budget goals” and “what will my project cost as predicted when the planning phase was done”. It uses many equations to figure this out. I make a habit of not only having engineers register the tie time they spent each day but also how much time they anticipate spending to complete the task.

 

It is the nature of software estimating that you know more about the task as you go along doing the task. Let’s say your original estimate was 40 hours. If 20 hours goes by you are not necessarily 50% done with the task. If you have the hours spent each day as well as the remaining work to be done, you may be over or under the original estimate. It is the Project Manager’s job to keep tight track on the work being done. If you find out a task is slipping early on in the project, you have plenty of time to recover. If you don’t find out until a week before the project is due, you have little control over saving the project.

 

In summary, EVM strategically augments good project management to facilitate the planning and control of cost and schedule performance. The key practices of EVM include:

 

·          Establish a performance measurement baseline (PMB)

·          Decompose work scope to a manageable level (work items) in WBS.     

·          Assign unambiguous management responsibility

·          Develop a time-phased budget for each work task

·          Select EV measurement techniques for all tasks

·          Maintain integrity of PMB throughout the project

·          Measure and analyze performance against the baseline

·          Record resourced during the project to be used in future planning

·          Objectively measure the physical work progress

·          Credit EV according to EV techniques

·          Analyze and forecast cost/schedule performance

·          Report performance problems and/or take action.

I have a requirement of never surprising my manager and ask my reports to never surprise me. This leads to a well managed project and a happy team!

September 21, 2008 Posted by | earned value | , , , | Leave a comment

Earned Value Management Planning Process

During the project planning process, EVM requires the establishment of a performance measurement baseline (PMB). This requirement amplifies the importance of project planning principles, especially those related to scope, schedule, and cost. EVM elevates the need for project work to be executable and manageable and for the workers and managers to be held responsible and accountable for the project’s performance.

 

Project work needs to be broken down—using a work breakdown structure—into executable tasks and manageable elements often called control accounts. Either an individual or a team needs to manage each of the work elements. All of the work needs to be assigned to the workforce for execution using an organization breakdown structure (OBS).

 

Project work needs to be logically scheduled and resourced in a work plan; the work scope, schedule, and cost need to be integrated and recorded in a time-phased budget known as a performance measurement baseline (PMB)

hypothetical work plan with a Gantt (bar) chart, to which earned value measurement has been added.

 

In the planning process, the means for assessing physical work progress and assigning budgetary earned value also needs to be established. In addition to routine project management planning, earned value measurement techniques are selected and applied for each work task, based on scope, schedule, and cost considerations.

 

In the project execution process, EVM requires the recording of resource utilization (i.e., labor, materials, and the like) for the work performed within each of the work elements included in the project management plan. In other words, actual costs need to be captured in such a way that permits their comparison with the performance Measurement Baseline.

 

 

 

 

 

September 20, 2008 Posted by | earned value | , , | Leave a comment

Glossary of Terms for Earned Value

Actual Cost (AC): Total costs actually incurred and recorded in accomplishing work performed during a given time period.

Actual Cost of Work Performed (ACWP): See Actual Cost (AC).

Apportioned Effort (AE): Effort applied to project work that is not readily divisible into discrete efforts for that work, but which is related in direct proportion to measurable discrete work efforts.

Contrast with Discrete Effort.

Budget at Completion (BAC): The sum of all the budgets established for the work to be performed on the project. The total planned value for the project.

Budgeted Cost of Work Performed (BCWP): See Earned Value (EV).

Budgeted Cost of Work Scheduled (BCWS): See Planned Value (PV).

Control Account: A management control point where scope, budget (resource plans), actual cost, and schedule are integrated and compared to earned value for performance measurement. Control accounts are placed at selected management points (specific components at selected levels) of the work breakdown structure.

Cost Performance Index (CPI): A measure of cost efficiency on a project. It is the ratio of earned value (EV) to actual costs (AC). CPI _ EV divided by AC. A value equal to or greater than one indicates a favorable condition and a value less than one indicates an unfavorable condition.

Cost Variance (CV): A measure of cost performance on a project. It is the algebraic difference between earned value (EV) and actual cost (AC). CV _EV minus AC. A positive value indicates a favorable condition and a negative value indicates an unfavorable condition.

Discrete Effort: Work effort that is separate, distinct, and related to the completion of specific end products or services, and that can be directly planned and measured.

Earned Value (EV): The value of work performed expressed in terms of the budget assigned to that work. It is also referred to as the Budgeted Cost of Work Performed (BCWP).

Earned Value Technique (EVT): This is a technique or method for measuring the performance of work, and used to establish the performance measurement baseline (PMB).

Estimate at Completion (EAC):  The expected total cost of completing project work. EAC is equal to the actual cost (AC) plus the estimate to complete (ETC) for all of the remaining work. The EAC may be calculated based on performance to date or estimated by the project team based

on other factors.  

Estimate to Complete (ETC): The estimated cost of completing the remaining work.

Level of Effort (LOE): Support-type activity (e.g., seller or customer liaison, project cost accounting, project management), which does not produce definitive end products.

Management by Exception:  A management technique that emphasizes attention to performance behavior that falls outside of some predetermined range of normal or expected outcomes. This technique is characterized by containment and conservatism.

Organizational Breakdown Structure (OBS): A hierarchically organized depiction of the project organization arranged so as to relate the work to the performing organizational units. (Sometimes OBS is written as Organization Breakdown Structure with the same definition.)

Performance Measurement Baseline (PMB): An approved, integrated scope-schedule-cost plan for the project work against which project execution is compared to measure and manage performance.

Physical Work Progress: The amount of work physically completed on the project or task. This may be different from the amount of effort or money expended on the project or task. Predetermined techniques of claiming physical work progress that were selected during project planning are

used to credit Earned Value when work is partially complete at the time of progress reporting.

Planned Value (PV). The authorized budget assigned to the scheduled work to be accomplished. This is also referred to as the budgeted cost of work scheduled (BCWS).

Responsibility Assignment Matrix (RAM): A structure that relates the project organizational breakdown structure to the work breakdown structure to help ensure that each component of the project’s scope of work is assigned to a responsible person/team.

Schedule Performance Index (SPI):  A measure of schedule efficiency on a project. It is the ratio of earned value (EV) to planned value (PV). The SPI _ EV divided by PV. An SPI equal to or greater than one indicates a favorable condition and a value of less than one indicates an unfavorable condition.

Schedule Variance (SV): This is a measure of schedule performance on a project. It is the algebraic difference between the earned value (EV) and the planned value (PV). SV _ EV minus PV.

S-Curve:  Graphic display of cumulative costs, labor hours, percentage of work, or other quantities, plotted against time. Used to depict Planned Value, Earned Value, and Actual Cost of project work.

Time-Phase Budget: A project budget that identifies how much money or labor is to be expended on each task for each time period (e.g., month) in the project schedule (see Planned Value).

To-Complete Performance Index (TCPI): The calculated projection of cost performance that must be achieved on remaining work to meet a specified goal, such as the BAC or the management EAC. For example: To-Complete Performance Index _ (remaining work) / (budget remaining)

_ (BAC _ EV) / (BAC _ AC). The difference between the total budget assigned to a project (BAC) and the total cost estimate at completion (EAC). Variance at Completion _ Budget: at Completion _ Estimate at Completion. It represents the amount of expected overrun or under-run.

Variance Threshold: A predetermined range of normal outcomes that is determined during the planning process and sets the boundaries within which the team practices management by exception.

 


[i] Guide to the Project Management Body of Knowledge (PMBOK@ Guide) Third Edition @2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA

September 18, 2008 Posted by | earned value, PMBOK | , , , , , , , | Leave a comment