Earned Value Management theory and

its application on practice at CERN and JINR.

Dmitry KekelidzeSoftware Engineer

JINR – LIT/ CERN - GS-AIS

Agenda

EVMS concepts

NICA project

EVM web-based application

What is EVM?

EVM is the project management tool...

Are we there yet?How much longer before we’ve arrived?What can we do about it?

performance measurementhow am I doing against my baseline plan?

performance managementwhat do I need to do to bring the project in on cost and schedule?

EVM is

Preparation• Research Topic• Decide on Structure

Make Slides• EVM Basics• EVM Advanced• NICA Intro• Conclusion

Finishing up• Trial Presentation• Implement Feedback

Example: making this presentation

Research

Presentation template

EVM Basics

NICA Intro

Conclusion

EVM Advanced

Start slides

Agenda

ReshuffleDry run

Slides ready

cost

time

Project: making the presentation

What is this mysterious Earned Value ?

What is an honest measure for what is achieved?

Research

Presentation template

EVM Basics

NICA Intro

Conclusion

EVM Advanced

Agenda

ReshuffleDry run

time

costSlides ready

Start slides

Project: making the presentation

Main metrics :

PV - Planned Value

The portion of work expected to be completed at a given date, times the authorized budget allocated to carry out that work

EV - Earned Value

The value of completed work expressed in terms of the budget assigned to that work

AC - Actual Cost The costs actually incurred and recorded in accomplishing the work performed

EVM Concepts

time

Cost

•Are we ahead or behind schedule?•Are you getting value for money?•Did you spend money on the right things?

Achievement

now

How is our project doing?

Budget

Planned Value

Actual Cost

Earned Value

$

now time

Underspending but ...

Actual Cost

Planned Value

Earned Value

What happens?

$

now time

Underspending but ...

Actual Cost

Planned Value

Earned Value

$

What happens ?

time

AC

PV

EVnow

BAC: Budget At Complete

SV = EV – PVSchedule Variance

CV = EV – ACCost Variance

project end

project start

SV < 0

SV > 0

CV < 0

CV > 0

PMR Project Management Reserve

$EVM Concepts

Earned Value: Cheat Sheet

Schedule Variance SV = EV–PV In currency. Negative means delay

Schedule Performance Index

SPI = EV/PV < 1 means delay

Cost Variance CV = EV-AC In currency. Negative means overcost.

Cost Performance Index

CPI = EV/AC < 1 means overcost

Estimate At Completion

EAC = BAC / CPI Forecast final cost

To Complete Performance Index

TCPIBAC = (BAC-EV)/(BAC-AC)

Can we catch up?

now time

EAC$

Estimated Cost at Completion

Benefits of EVM

Requires development of integrated baselineResults in better project definition and planning

Early identification of trends and problems Accurate picture of project status

Cost, schedule, and technicalsegregation of schedule and cost variances

Projection of final costs Project control by the team

Enables project manager to make informed decisions based on facts

Results in successful projectsOn time, on cost

Example: software development

Requirement

Architecture

Design

Code

Testing

100h

100h

100h

200h

100h

Task Month 1 Month 2 Month 3 Month 4 Month 5 Month 6Status at end of Month 5

Requirements(100h)

S------FComplete, Spent 100h

Architecture(100h)

S----PF --FComplete, Spent 120h

Design(100h)

PS-S-PF --FComplete, Spent 125h

Code (200h)

PS----S- -----PF25% Complete, Spent 70h

Testing(100h)

PS---PF Not yet started

Example: execution plan

At the end of Month 5, what is?

Calculation Answer

PV 100 + 100 + 100 + 200 500h

EV 100 + 100 + 100 + 50 350h

AC 100 + 120 + 125 + 70 415h

BAC 100 + 100 + 100 + 200 + 100 600h

CV 350 - 415 -65h

CPI 350 / 415 84%

SV 350 - 500 -150h

SPI 35,000 / 50,000 70%

IEAC 600/0.84 711h

TCPI (600-350)/(600-415) 135%

PMBOK

WBS: Work Breakdown Structure, hierarchical list of all the activities to be performed to complete the project.

Workunits: The “Leaves” of the WBS tree. Activity small in size/duration, under responsibility of one person.

Workunits use Resources (money, people) to produce Deliverables

Terminology

Where can EVM be Applied?

EVM suitable for projects that have:• Clear definition of work scope• Project schedule range from a few months to

many years• Small to very large cost

• Technically complex and demanding,i.e. that cannot be fully specified in the front-end phase;

• Long makespan: economic effects like inflation• Involving many contributors, contractors, suppliers...

i.e. many activities that are outsourced, result-oriented.

What is a large-scale project?

Agenda

EVMS concepts

NICA project

EVM web-based application

NICA

Is NICA large-scale project?

NICA

Work planned for period from year 2012 till 2017 Estimated cost is more than 100M $ Tasks to complete:

• General Infrastructure• Accelerator• MPD Detector

All the work have to be well coordinated

LHC Accelerator and Detectors

Project audit of 2001

18% overspend announcement … only

Technical Coordinator → “the project is behind

schedule”

Project Administrator → “the project is under-running” LHC Team: not is position to demonstrate that the

project could be completed within allocated budget!

Member States asked the LHC Project Management to set up

a formal Project Control System

EVM-based project control system

Deliverable-oriented physical progress monitoring

Interfaced to accounting systems,

to get accurate information on actual costs

Excel spreadsheets to interact with DBs

Web-based

The key requirements

Why a D-O EVMS?

Activitycompleted?

Progress 90%!

An activity of the project

Activitynot startedProgress 0%

Activityhalf-way

Progress 50%

Activityalmost doneProgress 90%

90%-syndrome

Outcome of EVM experience…

Re-established trust• Cost and Schedule Review Committee:

‘world class’• CERN management was formally

congratulated by Member States• Further overruns were discussed in the

context of proven project control.

Project culture at CERN and cost awareness of project engineers have improved.

Agenda

EVMS concepts

NICA project

EVM web-based application

Data Definition

WBS Workunits

Resources Personnel Material

Deliverables

• Web interface• Excel files

Collaborative tool

Reminders for progress reporting

Dynamic Reports

Crosstab to drill drown through the WBS structure (or other dimension…)

PV, EV, AC Charts at every WBS level

Conclusion

Objectively measures performance of the project as it moves from project initiation through project closure.

Provides early warning of potential project adverse performance.

Shows Opportunity associated with positive schedule variance.

Enables the management of risk associated with underwriting or insuring against negative schedule variance.

Provides a means to forecast future performance based upon past performance.

Спасибо!

Dmitry.Kekelidze@cern.ch

Questions?