Due to regular requests for more information on Earned Value Pedalsoft Enterprises has published a training manual called “Tracking Projects and Earned Value Reporting”. It uses MS Project 2000, Excel 2000 and Word 2000 and has very detailed steps and lots of screen grabs so it can be followed easily. It does assume that you are computer literate and have had some experience with MS Project. Samples from the book are shown at the end of this page.

Ordering

You can order direct from us by email cpedler@pedalsoft.com.au

Or go to Purchase Online on the left of your screen.

Cost is $33 for each manual incl GST and postage.

No of pages 60

Duration 2-3hrs

A disk is provided with required files.

What you will learn

In this module the participant will learn:

What Earned Value is and how it is used in the reporting project progress.

How to set up a project so that Earned Value can be used in the tracking process.

Generic steps in the tracking process.

How to import / export information between MS Project and Excel.

The use of standard project terminology in project reports.

Samples

Sample One

The following discussion on earned value is from the training manual.

Discussion --- Earned Value

Earned Value, what is it and why do we need it?

Earned Value is the Budgeted Cost of the Work Performed.

In other words it is the original planned cost for an activity. Earned Value allows us to track progress in dollar terms for a particular time period. Comparisons can be made against the original Budgeted Cost of the Work Scheduled (BCWS) and the Actual Cost of the Work Performed (ACWP) for that time period.

Let us consider a small project made up of four tasks a, b, c, d and e. Each one of the tasks has an estimated duration of 10days. There is one resource assigned to each task at 100%.

The resources have standard rates as described in the following table

Since each resource will work 80 hrs on the project the estimated cost is $16,000 and the total estimated amount of work is 400hrs. The calculations are shown in the following table.

	rate $/hr	hrs	cost
Jack	10	80	800
Jill	20	80	1600
Bob	30	80	2400
Ben	40	80	3200
Jane	100	80	8000
		400	$16,000.00

The company works on a margin of 50% so at the end of the project the contribution to company overheads is estimated to be $8000.

Let us now look at a scenario where we are one week into the project. If everything has run according to schedule cost as at Tues 13^th 5pm should be $8000 and hence the contribution that can be brought to account at this time should be $4000. The calculations are based on the following predictions.

	rate $/hr	hrs	cost
Jack	10	40	400
Jill	20	40	800
Bob	30	40	1200
Ben	40	40	1600
Jane	100	40	4000
		200	$8,000.00

Now consider the case where the project does not run according to plan. Our project has been tracked up to and including Tues 13^th Aug based on the following information:

Activity a has run according to schedule
Activity b has not started and has been rescheduled
Activity c had two days of work completed and still has 8 days to go. The eight days have been rescheduled.
Activity d had five days of work completed but it is now estimated a further seven will be needed.
Activity e is now complete which is much better than the original estimate.

The project is obviously going to finish later than expected but how do we report meaningfully on progress and how much contribution can be brought to account at this time?

The use of earned value (BCWP) is becoming increasingly popular as a technique to answer the above questions. It is compared to the Actual Cost of the Work Performed (ACWP) to report on cost variations and it is compared to the Budgeted Cost of the Work Scheduled (BCWS) to report on schedule variations. Finally BCWP can be used to calculate Earned Income and hence a realistic contribution can be calculated.

Look carefully at the following table. The calculations have been made as of a status date of Tues 13^th at 5pm.

Cost Variance (CV)

Cost Variance = BCWP- ACWP

= 10,213.33 – 6,480

= 3,733.33

This is a direct comparison of Budgeted Costs versus Actual Costs using exactly the same work i.e. the Work Performed in the first week. Clearly we have done the work for less money than anticipated.

Schedule Variance (SV)

Schedule Variance = BCWP-BCWS

= 10,213.33-8,000

= 2,213.33

In a dollar sense the Budgeted Cost of the Work we have Performed is greater than the Budgeted Cost of the Work originally Scheduled so we are doing better than anticipated at this point in time.

Contribution and Earned Income

Earned Income = BCWP x (100 + Margin)/100

= 10,213.33 x 1.5

= 15,320

Contribution = Earned Income – ACWP

= 15,320 – 6,480

= 8,840

Using Earned Value as at Tues 13^th 5pm the contribution that can be brought to account after the first week is $8,840.

This last calculation is particularly significant as we originally expected to bring to account only $4000 as of Tues 13^th 5pm. It is also worth noting that at the end of the project, if the project runs according to the new schedule, we would now expect a total contribution of $11,360 compared to the original estimate of $8000.

Earned value is a very useful tool for reporting project progress. However it does rely very much on proper planning and consistent tracking. Most users of earned value reporting use computer software. In our exercises we will use MS Project to demonstrate a viable process. We also make use of the export capabilities of MS Project into Microsoft Excel. This will be of particular interest to people who do not wish to use the Web site capability of MS Project or Project Central.

Sample two

The following exercise comes from the training manual.

Exercise eleven

Aim – View earned value analysis and create reports.

1. Open the Project file called “Bandu Vacc Ex11”

Let us now imagine today’s date is Tues 14^th May 02. However the analysis & reports that we want need to be based on information up to and including Sunday 12^th May 02. From our point of view choosing a date of either Monday 13^th May 02 8:00 or Sunday 12^th May 02 17:00 would have the desired effect.
However to allow for Project’s calculation methods we will enter -:
Current date Sunday 12^th May 02 8:00
Status date Sunday 12^th May 02 17:00

2. Click on “Project+Project Info…” and change the “Current date” to 12/5/02 8:00 and the Status date to 12/5/02 17:00

3. Go to a “Task Sheet” View and apply the “Earned Value” table.
You can hide and display detail as required.

The information can now be transferred to a Word file

4. Open Microsoft Word and open the file called “Bandu Vaccination Reports1”
Examine the file carefully. It has information and comments based on the earned value analysis. Scroll down and note that an area has been prepared for the next tracking period. This will allow for quick comparisons later.

5. Close Microsoft Word without saving the file.

6. Open Microsoft Excel and the file called “Bandu Vaccination Contributions”
This file only requires entries for ACWP & BCWP. Appropriate Contributions can then be brought to account in the company accounting system.

7. Close Microsoft Excel without saving the file.

8. Save the Project file as “My Bandu Vacc Ex11” and then close the file.

You have now completed this exercise.