In this primavera p6 tutorial, we will discuss the performance measurement capabilities of primavera p6 by using an example project. Pdf earned value is a wellknown project management tool that uses information. Pv is the physical work scheduled or what you plan to do. As part of evm, you use the following information to assess your schedule and cost performance throughout your project.
Good planning leads to good project execution and good management information. Calculating earned value 1 earned value management. Positive number indicates spending under budget negative number ind icates spending over budget. Therefore, i request you to go through every step thoroughly. Earned value management terms and formulas for project. The earned value for each work package in a control account is summed up to give the earned value for the control account and then, the values for each. Earned value calculations project factory, end of week 7. Figure 16 cost and schedule performance indices example. As such, the concepts are pretty straight forward but when applied to exam questions, things get tricky. Earned value worksheet make sure that the wbs, task name, and tbc are identical to the table in the report worksheet. Figure 3 figure 3 puts the work performance in a different light. Bcwp budgeted cost of work performed ev is the measure of the work actually performed, expressed in terms of the budget authorised for that work.
Earned value management is a project control process based on a structured approach to planning, cost collection and performance measurement. Term calculation definition indication p6 column name av accounting variance planned value actual cost how much moreless did you actually spend than was budgeted. Pdf files and a zip file of the collected set that may be downloaded as readers. Click on project baseline and select your baseline.
The largest benefits of earned value results from completing both cost and schedule variance analyses. This earned value management system evms description document provides a comprehensive exposition of processes and guidance for cost, schedule, and technical performance management and reporting as well as for effective project execution using earned value management. However, if aspirants can understand the evm calculation formulas correctly and master a few skills to tackle the evm questions, these dreaded evm questions would become lifesavers as nearly every aspirants can get all the evm questions correct. A measure of the cost efficiency of budgeted resources expressed as the ratio of earned exactly 1. Earned value management 1 earned value management evm is a project management technique that objectively tracks physical accomplishment of work. Make sure to look into the minute details of our earned value analysis examples so you can make sure that the document guide that you have selected is suitable and appropriate for the kind of earned value analysis that you need. It represents the effort of practitioners, academics and other stakeholders who have all given their time, knowledge. The next step in our earned value calculation is to multiply the percent complete for each work package times its resource value. Pdf earned value method as a tool for project control. One such technique of project monitoring is the earned value management or the evm. For each chunk of work, define its value as the budget assigned to it. For example, if a task has a planned duration of ten days with thirty hours of work. An introduction to earned value performance management.
Spi is calculated by dividing the earned value ev by the planned. Gather work performance information the inputs budget at completion bac planned value pv earned value ev actual cost ac determine schedule status. Earned value is a wellknown project management tool that uses information on cost, schedule and work performance to establish the current status of the project. Primavera p6 is an advanced earned value management software which enables to make earned value calculations to analyze the schedule and cost variances of project activities. Earned value analysis on an ongoing residential building project example. To analyze earned value management, you need to add additional columns to your activity table as displayed below. The approach supports the establishment of a baseline project plan, and then the management of cost and schedule performance to that plan in. How to calculate earned value with pictures wikihow. The basic premise of earned value management evm is that the value of a piece of work is equal to the amount of funds budgeted to complete it. I have discussed earned value management in detail and provided a short explanation of its three elements. Planned value pv, actual cost ac, and earned value ev now we are going to look at these elements in detail, including mathematical calculations.
Evm integrates the scope, schedule, and cost of a project. How to calculate earned value in project management. Project cost estimate project status using an earned value calculation all of this will position you to set up a plan to control your next assignment or your next project whether this is as the project manager or as an area leader. Asiso 21508 earned value management in project and programme management. Multiply the planned value of each task by the percentage completed. One such technique of project monitoring is the earned value management or. Calculating earned value 2 earned value management. Ev is the quantification of the worth of the work done to date or what you physically accomplished. A practitioner has achieved sufficient understanding of the theory and application of earned value management to allow them to work successfully in an earned value management environment. Most people dont have a problem in understanding actual cost ac. This course is designed for project managers who seek an introduction to evm to achieve better practical results for implementing project controls. The total is the earned value ev or budgeted cost of work performed bcwp.
Earned value management is a scientific approach to project management. Each step has several variables that are calculated during that step. Evm is used to track the progress and status of a project and forecasts the likely future performance of the project. Planned value pv vs earned value ev in earned value. However, to properly use earned value, a few additional calculations must be considered. It takes into account multiple variables like cost schedule and resource to present a dashboard to the project managers. Earned value management evm is a systematic process used to measure project performance at various times throughout a project life cycle. Earned value management evm is a technique that is used to track the progress and status of a project and forecast its likely future performance. Project managers need to keep things on track by keeping a close eye on the scope of and resources invested in a project. Earned value analysis eva is a well known planning and control. Each side is of equal length and you estimate that each side will contain the same material and labor costs as well as take the same amount of time to complete. In construction industry earned value analysis eva is the one of the most popular and standard method of measuring a works progress at any given time, also forecasting its final date of completion and completion cost.
Earned value is the value of completed work expressed in terms of the budget assigned for that work. This total is known as the earned value for that package. Earned value exercise 7 lets look at a simple example to see how earned value is calculated and used. Back to basics earned value management for beginners. Earned value provides information which enables effective decision making by knowing. Project duration forecasting worcester polytechnic. When you complete that chunk of work, you have earned its value.
As you can see, its a fairly simple calculation once. Calculation of a projected estimate at completion to compare with the cams. You can look at max wideman glossary for more formal definitions. For example, if a task has a planned duration of ten days with thirty hours of.
The earned value green line is below the actual cost red line. To recap, the earned value calculation at each predefined status point is a 5 step process. How to use earned value management in primavera p6. Pdf project management through earned value management. A projection of the amount of budget deficit or surplus, expressed as the difference between the budget at completion and the estimate at completion.