Earned Value - Cost/Manhours.......Progress??!

Hi Mark,

There are many threads in this forum that cover the use of EV - so it’s definitely worth exploring them. Moreover, if you just Google Earned Value, then you should get a lifetime’s worth of information. Howver, there aint no substitute for practical experience.

In answer to your question: Yes, the Earned Value (BCWP = Budgetted Cost of Work Performed) is initially determined by your calculated progress. The basic BCWP equation is: "Progress x Total Baseline Cost". In fact, the method of calculating progress is probably the most important element of all - and this is the "hub" from where all subsequent data will be derived.

All EV values are related to cost, as this is the lowest common factor that links all types of activity ie. labour, purchases etc. You can use man-hours if you like, but you must remember that $1 is just that, $1. However, an "hour" has an inifnite number of potential cost associations.

There are a number of equations that form part of the EV principle - but they are mainly extrapolations and ratios of the same basic data of Baseline Cost (BCWS) Actual Cost (ACWP) and Earned Value (BCWP).

There is debate ad-infinitum about the most appropriate methods of applying EV. Ultimately, however, the absolute value is of minor consequence. It is the TREND of the graphs that are most important.

In order to understand the principles of calculation, especially if you’re using software like Primavera or MSP,I recommend that you construct a mini-project of say 5 activities - no more than 5 because ideally you’ll want to manually perform the calculations to verify the data. Then go through a series of "updates" as you would in reality. Each time, generate the graphs and hand-check the calcs. and compare them to those data generated by the programme.

It’s quite good fun, really - and you’ll gain a helluva lot of understanding.

HTH.

James.

James thank-you. To put into perspective I had to explain the abbreviations, CSI SPI CPI to my project DIRECTOR!!.. who hadn’t a clue what they were, to top it off after I had my "master chart" EAC, VAC, BAC etc etc, my new "boss" came along nicked my chart and duely inserted it into a proposal for our company, hence it was what I was doing not the company. Like you say do it once, play about with it..sometimes/always it will tell you things you didn’t expect ie..your sub-contactor is underspending but still hitting target dates etc etc. Cheers.