Introduction to EVM – The Cherry on Top of the Cake

Introduction to EVM – The Cherry on Top of the Cake

As an added bonus, Earned Value enables us to predict future project performance based on the CPI and SPI.

To predict future project cost we can calculate two indicators:

  1. Estimated Cost At Completion Optimistic (ECAC Optimistic): Planned Cost/CPI. This assumes that the resources productivity will be constant.
  2. Estimated Cost At Completion Likely (ECAC Likely): AC+(Planned Cost-EV)/(CPI*SPI) if SPI between 0 and 1. This assumes that if a task is late than the productivity will be affected and is equal to CPI*SPI for the remaining work (Planned Cost-EV). Otherwise ECAC Likely=ECAC Optimistic.

To predict future project duration the indicator is Estimated Duration At Completion (EDAC) and is equal to Planned Duration/SPI.

As a rule of thumb, you should only use the predictions if the task progress is at least 15% or 20%.

Because SPI and CPI at the leaf task level, don’t present much information due to short duration and different resources assigned to different tasks predictions should be done at an intermediary level, usually at the phase level. It’s not common to use prediction at the project level since the CPI and SPI vary from phase to phase (the productivity of a test phase usually is not related the productivity of a envisioning phase).

See you all next week.


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