It marries time with money because it multiplies currency by scheduled time or percent complete, in the jargon of professional project managers. The lesson? You need to read on. Display earned value. Using reports. Using views. Interpret earned value. Some advice on using earned value. Further reading. Project displays earned value information two ways: with views and with reports. But first you need to do a few things to set up earned value for reporting.
Set a baseline. Set a status date. Specify the earned value method for percent complete optional. Three key values are at the root of earned value analysis, and you pretty much need to know at least these three values to use earned value.
This is the budgeted or baseline cost of tasks estimated at the start the project plan, based on the costs of resources assigned to those tasks, plus any fixed costs associated with the tasks, up to the status date you choose. If you are applying earned value to an existing plan, the resources should already be assigned and the costs for each task are automatically calculated when the standard rate was assigned.
To view the current costs, follow these steps to use the combination Task Entry and Task Usage view. Try selecting various tasks to view the total cost. In the EVA Example. Understanding the actual cost to deliver a task provides better awareness of major project deliverables and their complexity.
It allows the project manager to manage each task as a budget item in their portfolio instead of just a list of tasks. Managing the costs at the task level helps improve productivity by planning for quality team meetings. Understanding the costs of operating and managing the project will help avoid costly meetings and motivate the project manager to plan for productive and effective meetings. Project budgets are often estimated at a high level without the benefit of a detailed bottom-up estimate.
To save the project baseline, follow these steps:. Saving the project baseline before project execution avoids these manual-editing procedures. Tracking the Actual Start and Actual Finish dates and comparing them to the Baseline Start and Baseline Finish dates will be used to determine any schedule variances. Tracking the Actual Work and comparing it to the Baseline Work will be used to determine any cost variances. Figure 4 displays the Earned Value table for each task in the project plan.
The Earned Value data is calculated based on the current date. Select Earned Value Cost Indicator table. Select Earned Value Schedule Indicator table.
It is a pictorial representation of progress from start of the project until date of measurement. You can customize the report using Pivotal section of the report. It will open a Visual Report dialogue box. It will open an Earn Value graph in Excel.
You can customize the report using Pivotal section and Assignment Usage Sheet. Please share your view and experience in the comments section below. I look forward to read your views. Want to attend Microsoft Project Workshop — Click here. Thanks for your question. I did not get your question exactly but if you are asking how to forecast time using EVM, my answer is that EVM is weak on schedule side and does not forecast time.
Actually critical path method used to be used to forecast time and EVM was formulated to forecast cost. This is the amount of money estimated to be spent performing the scheduled work. It is also the planned value of all work displayed on the project schedule and performance management baseline. With our four fundamental EVM parameters we are ready for the races. The Cost Variance CV compares the economic value of completed work to the value of the actual cost. It is computed as follows:.
Including EV provides insight to the true health of our project. The reality of our project situation, as per earned value, is an overspent project. This demonstrates the power of EVM: you compare what you spent to what you accomplished, not what you spent compared to what you planned to spend.
You may determine Schedule Variance SV using both a dollarized approach and a time units approach. SV in economic terms uses the vertical performance management baseline axis.
SV determined in time units uses the horizontal axis. The vertical axis is the traditional SV approach. The dollarized SV equation is below:. CPI shows the efficiency with which the project is spending funds. It computes as follows:. CPI is a particularly important EVM metric, because past performance can be used to accurately determine final performance requirements to meet financial goals.
Again, SPI can be computed from time units or the more traditional monetary units. The dollarized SPI equation is as follows:. This equation algebraically simplifies to the below:. Again, this is the most optimistic estimate of final project cost when you consider that past overruns are not recoverable and future problems and realized risk may still occur. Our EAC, assuming current fund spending efficiency, is greater than the BAC, so this project at conclusion will be overspent.
The TCPI equation is as follows:. Our pier piling project TCPI is 1. The current CPI is 0.
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