Earned Value and Microsoft Project

Earned Value and Microsoft Project

Microsoft Project help describes Earned Value analysis as “a method for measuring project performance.” It indicates how much of the budget should have been spent in relation to the amount of work done so far and the baseline costs for the tasks, assignments, or resources.

At the root of Earned Value analysis are three key values:

  1. The budgeted cost of individual tasks as they are scheduled in the project plan based on the costs of resources assigned to those tasks plus any fixed costs associated with the tasks. This is the budgeted cost of work scheduled (BCWS). BCWS is the baseline cost up to the status date you choose. Budgeted cost values are stored in the baseline fields, or, if you’ve saved multiple baselines, in Baseline1 through Baseline10 fields.
  2. The actual cost required to complete all or some portion of the tasks up to the status date. This is the actual cost of work performed (ACWP). Normally, Microsoft Project correlates actual costs with actual work. Only if you enter actual costs independent of actual work or change resource pay rates will the actual cost be out of step with the scheduled cost.
  3. The value of the work performed by the status date measured in currency. This is literally the value earned by the work performed, and is called the budgeted cost of work performed (BCWP). This value is calculated for each individual task, but is analyzed at an aggregate level (typically at the project level).

Earned Value analysis is always specific to a status date you choose. This may be the current date or any date before the current date.

Microsoft Project gives us out-of-the-box AC, PV, EV, CV, SV, SPI, and CPI, among others. However, the key to using Earned Value is the way we interpret the values. So when EV>0 and PV=0 what should be the result of SPI? For anomalous situations, SPI calculated by Microsoft Project is always 0. This will difficult the analyses of eventual insertion errors.

If PV>EV>0 and PV=Task Baseline Cost (this means that the task in the initial plan should be finished but due to a delay is still progressing), what should be the result of SPI? For Microsoft Project, it’s EV/PV, but in this case we have a task that is recovering and PV will stay constant with an increasing EV, so SPI is going to improve until the task is finished. This will present us with some misinterpretations since at this time it is better to have SPI with a value that enables us to identify recovering tasks.

Next week we’ll talk about customizing Microsoft Project to provide more valuable information.

J

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