1. Using Earned Value Management System (EVMS) Briefing for ATC Engineering & Test Division (ACT-200) Managers and Leads

2. February 7, 20002 Briefing Objectives  What is a Project?  What is a Program?  What is Project Management?  What is EVMS?  Why do we need EVMS?  How is EVMS Implemented?  Who will implement it?

3. February 7, 2000 Project Management Terms - IV  Project  Project - Atemporary endeavor ToTo create a unique product or service.  Program  Program - Agroup of related projects - e.g. DSR, VSCS, URET, STARS,...as part of NAS ManagedManaged in a coordinated way - ACT-200 Coordinating UsuallyUsually include elements of ongoing operations

4. February 7, 20004 Project Management Terms - I  PM is the Application of Knowledge, Skills, Tools, and Techniques to Project Activities to Meet or Exceed Stakeholders’ Needs & Expectations. Knowledge of general management practice & relevant application areas.Knowledge of general management practice & relevant application areas.  PM overlaps general management in many areas but they are not synonymous - e.g DSR vs. Division/Branch.

5. February 7, 20005 Project Management Terms - II  Work Breakdown Structure (WBS): A deliverable-oriented grouping of project elements which organizes and defines the total scope of the project. Each descending level represents an increasingly detailed definition of a project component. Project components may be products or services.

6. February 7, 20006 Project Management Terms - III  Work Package: Lowest Level of the WBS that may be Divided into Activities.  OBS: An Organizational Chart Relating Work Packages to Organization Units.  Responsibility Matrix: Relates Organization Structure to WBS & Ensures that each Element of the Project’s Scope of is Assigned to a Responsible Individual.

7. February 7, 20007 Earned Value Management System (EVMS) - I  EV - Tool for Measuring Project Performance  Compares work actually accomplished to work planned to determine if cost & schedule performance is as planned  EV is an Early Warning System  Helps management make proactive decisions to keep projects on course

8. February 7, 20008 Earned Value Management System (EVMS) - II  EV Integrates Cost, Scope & Schedule measurements  EV Involves Calculating 3 key values for each activity Budget - BCWSBudget - BCWS Actual Cost - ACWPActual Cost - ACWP Earned Value/Physical Progress - BCWPEarned Value/Physical Progress - BCWP  Basis for variance analysis

9. February 7, 20009 Planning for EVMS - I  Create a work breakdown structure  Organize work into discrete work packages and activities  Allocate a budget to each of the activities  Develop a schedule and Assign resources to accomplish each activity on the schedule  Be sure to include all work in the schedule

10. February 7, 200010 Planning for EVMS - II  Award performance credit for physical % complete using any of these methods  0-100 Short duration tasks < 160 hoursShort duration tasks < 160 hours EV is Zero until activity is completeEV is Zero until activity is complete  50-100 Duration less than 600 hoursDuration less than 600 hours 50% at start of activity & 50% at completion 50% at start of activity & 50% at completion

11. February 7, 200011 Planning for EVMS - III  Interim milestone; Duration less than 600 hoursDuration less than 600 hours Based on completed milestone for taskBased on completed milestone for task  Level of Effort (LOE) Long duration & consistent tasksLong duration & consistent tasks Difficult to measure - no deliverablesDifficult to measure - no deliverables Measured by duration of time used e.g. 10 weeks support is 50% complete at 5 weeksMeasured by duration of time used e.g. 10 weeks support is 50% complete at 5 weeks

12. February 7, 200012 Tracking & Analysis  Each update cycle/Reporting Period Monthly or Bi-MonthlyMonthly or Bi-Monthly Obtain physical % complete for each taskObtain physical % complete for each task Calculate EV for each taskCalculate EV for each task Sum up EV for all tasks as project EVSum up EV for all tasks as project EV Calculate actual expenditure for actual work completed during the periodCalculate actual expenditure for actual work completed during the period Compare the Cumulative EV to Actual expenditureCompare the Cumulative EV to Actual expenditure

13. February 7, 200013 Elements of EV Analysis - I  Performance indices relate value of work performed to dollar spent. e.g. CPI = 0.65 means that for every dollar spent, actual value of the work performed is $0.65.  Cumulative CPI used to forecast project cost at completion (also slide 17)  Cumulative SPI used to forecast project completion date (also slide 17)

14. February 7, 200014 Elements of EV Analysis - II  Cost Variance - Difference between budgeted cost of work scheduled & actual cost of work performed CV = BCWP - ACWPCV = BCWP - ACWP  Schedule Variance - Difference between budgeted cost of work scheduled & actual cost of work performed SV = BCWP - BCWSSV = BCWP - BCWS

15. February 7, 200015 Elements of EV Analysis - II  SPI - BCWP/BCWS  SPI => 1.0, Project Schedule performing as planned or better  SPI < 1.0, Project not performing as planned - needs help

16. February 7, 200016 Elements of EV Analysis - III  CPI - BCWP/ACWP  CPI => 1.0, Project Cost performing as planned or better  CPI < 1.0, Project Cost not performing as planned - needs help  % Over/Under Budget - CAC - BCWS

17. February 7, 200017 Project Cost & Schedule Forecast Methods  Estimate at Completion (EAC) is total cost to complete an activity, work package, or a project expressed as:: EAC = Actuals-to-date + Estimate to complete (ETC)EAC = Actuals-to-date + Estimate to complete (ETC)  Cost EAC - BAC/CPI  Schedule EAC - BAC/SPI

18. February 7, 200018 EV Reporting  Interpret the results of the calculations - Slides 8 - 11  Take or recommend corrective action as necessary

19. February 7, 200019 Conclusion  EVMS provides management with an effective tool for program planning and controltool for program planning and control early warning system for program mgt.early warning system for program mgt.  EV Integrates Cost, Quality, & Schedule objectives when appropriately implemented  Must a baseline for measurements, and control at the start of project.

20. February 7, 200020 References  Project Management Institute (PMI), 1996. A Guide to the Project Management Body of Knowledge (the PMBOK TM Guide) -  Ray W. Stratton, 1999. Improving SPI and CPI Calculations on LOE Heavy Programs, Proceedings of the 30th Annual PMI Seminars & Symposium  Fleming and Koppeman, 1996. Earned Value Project Management.

21. Thank you for Listening Pat A. Eigbe, PMP ®, -- Hi-Tec Systems x. 5-7857