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Dear Folks,

You might have heard a lot about Earned value, earned value management, earned value analysis and so on. Lets get some insight on this topic. Lets go straight into the topics

3-Constraints or Triple Constraints

Lets starts from the basics of Earned Value Analysis,

If you look into any projects which can be under any industry, a project always contains 3-Major items, these are

1. DURATION OF PROJECT -TIME
   1. Time required to complete a project Eg. 3year
2. COST OF PROJECT- COST
   1. Money required to complete a project Eg. 1Million US Dollar
3. SCOPE OF PROJECT- SCOPE
   • Detailed activities that leads to successful completion of a project Eg. Footing excavation, Footing Shuttering, footing reinforcement, concreting etc. in a real project activities will range between from 100-30000+ activities depending upon the

So what I am trying to say is, inorder to track progress of a project from its start to end, you must measure these 3 constrains in parallel.

Example

Imagine that you are building a house for a client, you promised him to build house (activities that sum up to build this house that satisfy client requirement is called scope) within a cost of $120,000 (Cost of project) in 6 months (Time).

3-methods of measuring progress

Time Tracking

In my experience I have dealt with projects that uses time to measure the progress of project, means a project of 100 days will progress to 50% according to plan on its 50^th day.

Good, but I have few questions

Did they completed activities which they are supposed to complete?

Are they spending right amount of money?

Answer is “No idea” L

Time & Cost Tracking

This method is more effective than the above, because they measure time and cost in parallel means

A 100 day project with a budget of $50000 should spend $25000 on its 50^th day, if project goes according to the plan.

Great, But I have a question

Did they completed activities which they supposed to complete by 50th day?

Answer may be, yes we may complete

Time,Cost & Scope Tracking

As these are 3 major constraints, these are perfect way to measure progress of any project. According to this method we can accurately say by any period of time how much activities should be completed and money that should be spent. Obviously this is a great method and elders named this method Earned value method.

Use this method to analyse your project performance and call it as Earned value analysis, and also manage all projects to call it Earned value management. That how these technical terms evolved over time.

Earned value technique has a history starting from early 60s formulated by American defense department.

Earned value analysis

To analyze earned value in your project you should know technical terms that Iisted below

1. Budgeted at Completion or BAC
2. Planned Value Cost or PV
3. Earned Value Cost or EV
4. Actual Cost or AC
5. Cost Variance or CV
6. Schedule Variance or SV
7. Cost Performance Index or CPI
8. Schedule Performance Index or SPI
9. Estimate at Completion or EAC
10. Estimate to Completion or ETC
11. Variance At Completion or VAC
12. To Complete Performance Index or TCPI

Lets understand all these with an example of Ann the Project Manager.

Hope you now understood the example, now let see what really happened on site

Hope you now understood EV,PV,AC,SV &CV

let get into more details

Did you understand, the real meaning of EAC, ETC and VAC?

here it goes..

So, Thats a whole story of Earned value, we can perform earned value using softwares like Oracle Primavera p6 and Microsfot Project

if you have any question please post it on our forum  

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