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Earned Value Management theory and
its application on practice at CERN and JINR.
Dmitry KekelidzeSoftware Engineer
JINR – LIT/ CERN - GS-AIS
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Agenda
EVMS concepts NICA project EVM web-based application
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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?
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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
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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
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Research
Presentation template
EVM Basics
NICA Intro
Conclusion
EVM Advanced
Start slides
Agenda
ReshuffleDry run
Slides ready
cost
time
Project: making the presentation
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What is this mysterious Earned Value ?
What is an honest measure for what is achieved?
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Research
Presentation template
EVM Basics
NICA Intro
Conclusion
EVM Advanced
Agenda
ReshuffleDry run
time
costSlides ready
Start slides
Project: making the presentation
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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
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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?
BudgetPlanned Value
Actual Cost
Earned Value
$
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now time
Underspending but ...
Actual Cost
Planned Value
Earned Value
What happens?
$
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now time
Underspending but ...
Actual Cost
Planned Value
Earned Value
$
What happens ?
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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
$EVM Concepts
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Earned Value: Cheat Sheet
Schedule Variance SV = EV–PV In currency. Negative means delay
Schedule Performance Index
SPI = EV/PV < 1 means delay
Cost Variance CV = EV-AC In currency. Negative means overcost.
Cost Performance Index
CPI = EV/AC < 1 means overcost
Estimate At Completion
EAC = BAC / CPI Forecast final cost
To Complete Performance Index
TCPIBAC = (BAC-EV)/(BAC-AC)
Can we catch up?
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now time
EAC$
Estimated Cost at Completion
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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
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Example: software development
Requirement
Architecture
Design
Code
Testing
100h
100h
100h
200h
100h
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Task Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Status at end of Month 5
Requirements(100h) S------F Complete,
Spent 100h
Architecture(100h) S----PF --F Complete,
Spent 120h
Design(100h) PS-S-PF --F Complete,
Spent 125h
Code (200h) PS----S- -----PF 25% Complete,
Spent 70h
Testing(100h) PS---PF Not yet started
Example: execution plan
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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 600hCV 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%
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PMBOK
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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
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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
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• 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?
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Agenda
EVMS concepts NICA project EVM web-based application
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NICA
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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
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LHC Accelerator and Detectors
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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
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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
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Why a D-O EVMS?
Activitycompleted?
Progress 90%!
An activity of the project
Activitynot startedProgress 0%
Activityhalf-way
Progress 50%Activity
almost doneProgress 90%
90%-syndrome
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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.
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Agenda
EVMS concepts NICA project EVM web-based application
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Data Definition
WBS Workunits
Resources Personnel Material
Deliverables
• Web interface• Excel files
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Collaborative tool
Reminders for progress reporting
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Dynamic Reports
Crosstab to drill drown through the WBS structure (or other dimension…)
PV, EV, AC Charts at every WBS level
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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.