1. UCL/APM Principles of Project Management graham.collins@ucl.ac.uk
UCL/APM Principles of Project Management Earned Value (EV) Graham Collins University College London (UCL)
Lecture 7 Earned Value st March 2007

2. Example iterative project
Iteration
Month
Planned Costs 1
5000 2
8000 3
7000 4
12000 5
14000

3. Question
After 5 months, it is found that activities 1-4 have been completed, and that the spend is £ Using a measure that simply looked at spend, the target was to have completed five activities during this time and therefore the spend should be £46000

4. Calculating Earned Value
Value is ‘earned’ by the completion of activities and the budget for each activity is the value it has earned. In this case it would be the sum of the budgets for the activities 1-4 ie £32000

5. Array of Measures Actual spend £36000 Planned spend £46000
Earned value £32000

6. cpi Cost performance indicator =earned value/actual spend =32000/36000
=0.889
Estimated cost at completion =original budget/cpi
=£46000/0.889
=£51000 approx
(Note that the variance between earned value and actual is
£4000)

7. spi Schedule performance indicator =earned value/planned =32000/46000
=0.696
Estimated time of completion=Original time estimate/spi
=5months/0.696
=7.2months
(Note variance was £14000 between what was earned and planned)

8. Exercise Month Planned costs Actual costs iterations complete
The plan was to complete one iteration per month

9. Planned in comparison to Actual

10. Earned Value in relation to Planned costs and Actual costs

11. Variance

12. Exercise
Should variance ie cpi and spi be plotted based on cumulative figures or per month?
Recalculate based on monthly values

13. Variance tracked on a monthly basis

14. spi
Note calculations for spi have used spic or cost. In the original example spic was EV/planned = 32/46=0.696
Final time to complete=original time estimate/spic 5 months/0.696 = 7.2 months
spit or time is 4/5 (ie 4 months over 5) =0.8 therefore final time = 5months/0.8 =6.25 months

15. Further reading
Agile & Iterative Development: A Manager’s guide Craig Larman 2004 Addison-Wesley (Agile Software Development Series) ISBN: