Project performance
Project performance
Order Instructions:
A portion of the Ajax project has five tasks we are tracking with EVA. Here is the status for this work period for those 5 tasks:
TASK 1.5
Task- 1.5.1 was budgeted at $755, so far we have spent out the door $824. I understand that it is 80% done. This is the end of the 3rd week and it was supposed to be done in five weeks.
Task- 1.5.2 is 25% complete one full week into a 3 week task. The budget says $1,250 for this one. We are out of pocket $800 so far for this puppy.
Task- 1.5.3 was done at the end of last reporting period. The planned 5 week time period for the task has passed. It was actually completed it 2 weeks early! The budgeted amount was $675, but it actually cost us $890 (Maybe that was why it went so fast -overtime?!.)
Task- 1.5.4 is 25% complete one full week into a 3 week task. The budget says $1,125 for this one. We have spent so far I’m told $790 for this guy.
Task- 1.5.5 has not started yet. We are about four weeks before we can start that one. It is budgeted at $2550 and a duration of 3 weeks.
Some questions for you
1. Using EVA what are the PV, EV, and AC values for each Task and for the entire TASK 1.5 effort to date?
2. What are the SV, CV, SPI, and CPI values for each Task and for the entire TASK 1.5 effort to date?
3. What is your overall assessment for this effort at this time?
SAMPLE ANSWER
Introduction
According to Philipson & Antvik (2009) for many companies that are focused on improving project performance, there seems to be a lot of emphasis on earned value analysis (EVA) as the most crucial logical technique for utilization on projects with an aim of getting a better understanding and management performance. This is attributable to the fact that, in these techniques procedures are well written and there is also provision of some training (Project Management Institute, 2013). Humphreys (2011) reiterates that project managers’ use earned value analysis, with an expectation of the project management results will soon improve significantly.
Marshall (2014) reiterates that earned value analysis is considered to be an industry’s standard way for the measurement of a project’s progress, forecasting its completion date and final cost, and providing schedule and budget variances along the way. As a result, through integration of three measurements, it provides consistent, numerical indicators with which you can evaluate and compare projects (Abba, 2012; Devaux, 2014).
Defense Systems Management College (2007), note that the approach of earned value analysis is used to measure the extent to which the project work has been completed in a project with regards to each task at given point of performance and time. This analysis is often carried out through calculation of how much time, the work has taken as well as the resources that have been used, and the values obtained for both resources and time are compared to the planned values in order to determine whether the project is running ahead or behind schedule (Fleming & Koppelman, 2005). Similarly, the earned value analysis is also used to determine whether the resources utilized are more than initially planned, meaning that the project management has not been efficient with regards to resources (Fleming & Koppelman, 2005; Goodpasture, 2004). Formally, Earned value analysis may be defined as a tool to objectively measure project performance by integrating scope, time and cost data. Earned value management also provides a means to forecast future performance based on past performance (Goodpasture, 2004).
This report will provide an analysis of earned value based on key formulas and key metrics essential for the monitoring of a project when using earned value analysis. This will be in addition to a consideration of the common errors encountered in implementing EVA and corrective actions that are appropriate. An informed conclusion will be arrived at based on the carried out analysis from the perspective of EVA concepts and principles as well as project performance metrics, which is a cornerstone of earned value management.
Questions (Calculated values are within the PowerPoint file)
Using EVA, the PV, EV, and AC values for each are shown in the PowerPoint presentation. In addition, the SV, CV, SPI, and CPI values for each Task are also shown in the PowerPoint presentation. Furthermore, an overall assessment for this effort at this time based on the calculated performance metrics show that the project is not well managed. For instance, the schedule and cost efficiency of all the four tasks is relatively not very good whereby only Task 1 and Task 2 are ahead of schedule; while both Task 2 and Task 4 are behind schedule. All the four tasks are over budget with relatively large margins indicating that the actual costs for all tasks were above the planned values. SPIs show relatively good efficiency for schedule with ratio ranging from 0.67 to 1.33, while CPIs terrible cost efficiency with ratios of 0.73, 0.39, 0.76 and 0.36 for Tasks 1, 2, 3 and 4 respectively.
Conclusion
In conclusion, it is undoubtedly evident that earned value analysis can be used to analyze the progress of a project in order to succinctly know how effectively it is managed with regards to schedule (time) and resources (cost). This provides a comparison between the planned values and the actual values in order to gauge the extent of efficiency in project management. For example, the values obtained in the Ajax project show that the extent of efficiency was relatively not very good both in terms of time and resources. However, its implementation was still with an achievable range.
References
Abba, W. (2012). How Earned Value Got to Prime Time: A Short Look Back and a Glance Ahead. PMI College of Performance Management. Retrieved from www.pmi-cpm.org
Defense Systems Management College (2007). Earned Value Management Textbook, Chapter 2. Defense Systems Management College, EVM Dept., 9820 Belvoir Road, Fort Belvoir, VA 22060-5565.
Devaux, S. A. (2014). Managing Projects as Investments: Earned Value to Business Value. London, UK: CRC Press.
Fleming, Q., & Koppelman, J. (2005). Earned Value Project Management (3rd ed.). Newtown Square, PA: Project Management Institute.
Goodpasture, J. C. (2004). Quantitative Methods in Project Management. J. Ross Publishing. pp. 173–178.
Humphreys, G. (2011). Project Management Using Earned Value. Newtown Square, PA: Humphreys and Associates.
Marshall, R. (2007). The Contribution of Earned Value Management to Project Success of Contracted Efforts. Journal of Contract Management, 2007, pp. 21-331.
Marshall, R. A. (2014). The contribution of earned value management to project success on contracted efforts: A quantitative statistics approach within the population of experienced practitioners. PMI College of Performance Management. Retrieved from www.pmi-cpm.org
Project Management Institute (2013). A Guide to the Project Management Body of Knowledge. Newtown Square, PA: Project Management Institute. 2013. pp. 217–219.
Philipson, E., & Antvik, S. (2009). Earned Value Management: An introduction. Philipson Biz.
Project Management Institute (2005). Practice Standard for Earned Value Management. Newtown Square, PA: Project Management Institute.
Solomon, P., & Young, R. (2006). Performance-Based Earned Value. New York, NY: Wiley-IEEE Computer Society.
Stratton, R. (2006). The Earned Value Maturity Model. New York, NY: Management Concepts.
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