1. Microsoft Project Association Building an EV System using MS Project (and Excel) Kirsty C. McLean, MBA, PMP Project Controller, Photonics Division General Atomics

2. Overview Introduction – 3 eng EV Explained Setting up a Project for EV in Project Standard or Professional Setting up an EV Process across the Organization –using Microsoft Project, Sharepoint and Excel

3. What is EVM? Basic project management principles applied in a disciplined and controlled manner Allows for accurate information on project performance to enable decision making in a timely manner

4. EVM is the primary project management tool that integrates the technical, schedule, and cost parameters of the contract. What is EVM?

5. What Matters?

6. Intro: Earned Value Timeline 1959PERT and PERT/Cost— (DD 1097) 1963Earned Value Concept (MINUTEMAN) 1967DOD—Cost/Schedule Control Systems Criteria (C/SCSC) (DODI 7000.2) 1972DOD—-Revised DODI 7000.2 and Issued the Joint Implementation Guide (JIG) 1972NASA Marshall Space Flight Center—C/SPC 1975DOE—Performance Measurement System (PMS) 1982National Security Agency—Earned Value 1984FAA & NASA Lewis Research Center—PMS 1989Australian DOD—DODI 7000.2 1990Canadian DOD—PMS 1992National Oceanic And Atmospheric Administration (NOAA)—PMS 1993Swedish FMV—C/SCSC 1994Internal Revenue Service (IRS)—C/SCSC 1994Federal Bureau Of Investigation (FBI) —C/SCSC 1996DODR 5000.2-R replaces DODI 5000.2 - C/SCSC revised from 35 to 32 criteria 1996Revised JIG—Renamed EVM Implementation Guide (EVMIG) 1998MIL-STD 881B replaced by MIL HDBK 881 1998ANSI 748 published 1999DOD adopts ANSI 748 for Defense Acquisitions 2000PMBOK EV chapter 2005 PMI new EV Standard

7. EV Explained Your project: –total budget of $100,000 –12 month effort –produce 20 units How are you doing? Is everything going to plan? How far along are you? (64%, 50%, >40%) – Is this where you expected to be or do you need to take action? Life without EVMS - A Simple Example Status: –spent to date: $64,000 –time elapsed: 6 months –units produced: 8 complete, 2 partial

8. Basic EV Terms PMBOKANSIDefinitionMeaning EVBCWPEarned Value or Budgeted Cost or work Performed The physical work accomplished PVBCWSPlanned Value or Budgeted Cost of Work Scheduled The amount of work that should have been accomplished by the status date. ACACWPActual Cost of Work Performed Total cost incurred to date SV Schedule VarianceBCWP-BCWS CV Cost VarianceBCWP-ACWP SPI/ CPI Schedule / Cost Performance Index BCWP/BCWS BCWP/ACWP EAC Estimate at CompletionTotal cost at completion

9. 0 500 1000 1500 2000 2500 3000 JFMAMJJASONDMJJASONDJF TIME FRAME UNIT OF MEASUREMENT TIME NOW ACWP (Actual Expenditure) Project Tracking

10. 0 500 1000 1500 2000 2500 3000 JFMAMJJASONDMJJASONDJF TIME FRAME UNIT OF MEASUREMENT TIME NOW Spend Variance ACWP (Actual Expenditure) Planned Spend Is this project AHEAD of schedule?

11. 0 500 1000 1500 2000 2500 3000 JFMAMJJASONDMJJASONDJF Over-budget, Behind schedule TIME FRAME UNIT OF MEASUREMENT TIME NOW BAC EAC Schedule Variance Cost Variance Baseline Actual Expenditure Earned Value (Work Completed)

12. 0 500 1000 1500 2000 2500 3000 JFMAMJJASONDMJJASONDJF The Complete Picture TIME FRAME UNIT OF MEASUREMENT TIME NOW BAC MANAGEMENT RESERVE EAC Contract Budget Base Schedule Variance Cost Variance Baseline Actual Expenditure Earned Value (Work Completed)

13. Earned Value – the Math Your project: –total budget of $100,000 –12 month effort –produce 20 units The Basics BAC = Budget at Completion = $100,000 BCWS = Plan =$50,000 ACWP = Actuals = $64,000 BCWP = Performance = $5,000/unit = $40,000 Life with EVMS - A Simple Example Status: –spent to date: $64,000 –time elapsed: 6 months –units produced: 8 complete, 2 partial

14. Your project: –total budget of $100,000 –12 month effort –produce 20 units Earned Value –BAC = $100,000 ACWP = $64,000 –BCWS = $50,000 BCWP = $40,000 The Variance Measures CV= Cost Variance =BCWP-ACWP= -$24,000 SV =Schedule variance = BCWP-BCWS= -$10,000 CV% = CV/BAC = -24% SV % = SV/BAC = -10% CPI = BCWP/ACWP = 40,000/64,000 = 0.625 SPI = BCWP/BCWS = 40,000/50,000 = 0.8 Life with EVMS - A Simple Example Status: –spent to date: $64,000 –time elapsed: 6 months –units produced: 8 complete, 2 partial

15. Earned Value –BAC = $100,000, BCWP = $40,000 –BCWS = $50,000 CPI = 0.625 –ACWP = $64,000 SPI = 0.8 The Estimate at Completion MS Project: – EAC = ACWP + (BAC – BCWP) / CPI – = $64,000 + (100,000 – 40,000)/0.625 – = $160,000 Independent EAC: – IEAC = ACWP + (BAC – BCWP)/(0.8 CPI + 0.2 SPI) – = $64,000 + (60,000)/(0.5 + 0.16) – = $154,909 Life with EVMS - A Simple Example

16. EV methods Common EV Methods EV MethodDescriptionUsed for 0/1000 to start, 100% to finishTasks < 10 days duration r within the reporting period 50/5050% to start, 50% to finishTasks around 2 months or periods 25/7525% start, 75% to finishTasks for longer durations that are hard to measure MilestonesBreak the task into measurable milestones, eg 10% when order placed, 20% when tested, 30% when in production etc Longer tasks UnitsEg 10% per unit completeUnit oriented tasks, repeatable tasks, even when number is unknown Level of EffortUsed when output isn’t measurable. <20% effort of project should be LOE. Project Management, Systems Eng, Logistics support % spent% spent equals % completeAs rarely as possible Source: Blanchard, B. Systems Eng Management

17. Setting up one EV project in MS Project (Standard or Server) WBS –Project will assign a WBS automatically –You can customize the WBS Baseline –Schedule out the whole scope of work –Add costs by adding resources, including material resources –Build contingency for risk into the baseline EV Methods –Add a custom field that gives the options Tracking –Gather % complete from team members –Add actual costs in a time phased way from the financial system Reporting –Use Excel format

18. Setting up one EV project in MS Project Organization & Planning WBS Baseline EV Methods Tracking –Gather % complete from team members –Add actual costs in a time phased way from the financial system Reporting –Use Excel format

19. Organization & Planning Abraham Lincoln once said that if he had eight hours to cut down a tree he would spend the first six hours sharpening the saw.

20. Are you ready to baseline your EV Project? 1.WBS includes all the scope and only the scope 2.Start and Finish dates match charter or contract 3.Budget cost (without profit) matches charter or contract 4.Every task has an EV Method assigned 5.All tasks have successors. Critical Path makes sense. 6.Project milestones about every reporting period 7.Key risk areas addressed with contingencies 8.All requirements covered 9.Realistic resource profile and Performance Measurement Baseline 10.Team and Sponsor sign off to resource plan, milestone chart and baseline BASELINE!!!

21. Source: Gary Christle

22. WBS – Consider a Visio first

23. Customizing the WBS

24. Are you ready to baseline your EV Project? 1.WBS includes all the scope and only the scope 2.Start and Finish dates match charter or contract 3.Budget cost (without profit) matches charter or contract 4.Every task has an EV Method assigned 5.All tasks have successors. Critical Path makes sense. 6.Project milestones about every reporting period 7.Key risk areas addressed with contingencies 8.All requirements covered 9.Realistic resource profile and Performance Measurement Baseline 10.Team and Sponsor sign off to resource plan, milestone chart and baseline BASELINE!!!

25. Check that the dates and budget match the contract

26. Are you ready to baseline your EV Project? 1.WBS includes all the scope and only the scope 2.Start and Finish dates match charter or contract 3.Budget cost (without profit) matches charter or contract 4.Every task has an EV Method assigned 5.All tasks have successors. Critical Path makes sense. 6.Project milestones about every reporting period 7.Key risk areas addressed with contingencies 8.All requirements covered 9.Realistic resource profile (graph over time to see gaps) 10.Team and Sponsor sign off to resource plan and milestone chart BASELINE!!!

27. Choosing the EV Method – add a custom text field

28. Are you ready to baseline your EV Project? 1.WBS includes all the scope and only the scope 2.Start and Finish dates match charter or contract 3.Budget cost (without profit) matches charter or contract 4.Every task has an EV Method assigned 5.All tasks have successors. Critical Path makes sense. 6.Project milestones about every reporting period 7.Key risk areas addressed with contingencies 8.All requirements covered 9.Realistic resource profile and Performance Measurement Baseline 10.Team and Sponsor sign off to resource plan, milestone chart and baseline BASELINE!!!

29. Check Successors

30. Finding the Critical Path

31. Does it make sense?

32. Finding the Critical Path – select tools – options – calculation – multiple critical path

33. Critical Path: Ignore LOE tasks

34. Are you ready to baseline your EV Project? 1.WBS includes all the scope and only the scope 2.Start and Finish dates match charter or contract 3.Budget cost (without profit) matches charter or contract 4.Every task has an EV Method assigned 5.All tasks have successors. Critical Path makes sense. 6.Project milestones about every reporting period 7.Key risk areas addressed with contingencies 8.All requirements covered 9.Realistic resource profile and Performance Measurement Baseline 10.Team and Sponsor sign off to resource plan, milestone chart and baseline

35. Milestone Chart

36. Are you ready to baseline your EV Project? 1.WBS includes all the scope and only the scope 2.Start and Finish dates match charter or contract 3.Budget cost (without profit) matches charter or contract 4.Every task has an EV Method assigned 5.All tasks have successors. Critical Path makes sense. 6.Project milestones about every reporting period 7.Key risk areas addressed with contingencies 8.All requirements covered 9.Realistic resource profile and Performance Measurement Baseline 10.Team and Sponsor sign off to resource plan, milestone chart and baseline BASELINE!!!

37. Resource Plan Use the Task Usage view Set the status date to the end of the project Graph adds clarity Do you need to Level?

38. Performance Measurement Baseline Does the funding profile match the baseline?

39. Are you ready to baseline your EV Project? 1.WBS includes all the scope and only the scope 2.Start and Finish dates match charter or contract 3.Budget cost (without profit) matches charter or contract 4.Every task has an EV Method assigned 5.All tasks have successors. Critical Path makes sense. 6.Project milestones about every reporting period 7.Key risk areas addressed with contingencies 8.All requirements covered 9.Realistic resource profile and Performance Measurement Baseline 10.Team and Sponsor sign off resource plan, milestone chart and baseline BASELINE!!!

40. Baseline control is key – check the date

41. Setting up one EV project in MS Project Organization & Planning WBS Baseline EV Methods Tracking Reporting

42. Steps in Tracking your project 1.Decide on the reporting period based on when your financial system delivers verified actual costs 2.Set the status date to the end of the previous period 3.Set up a tracking view 4.Set up to use Physical % complete 5.Update dates and % using Physical % Complete and the EV methods 6.Add in actual costs and validate 7.Customize an EV View 8.Consider adding a budget/ commitment view

43. Steps in Tracking your project 1.Decide on the reporting period based on when your financial system delivers verified actual costs 2.Set the status date to the end of the previous period 3.Set up a tracking view 4.Set up to use Physical % complete 5.Update dates and % using Physical % Complete and the EV methods 6.Add in actual costs and validate 7.Customize an EV View 8.Consider adding a budget/ commitment view

44. Project – Project Information – Status Date

45. Steps in Tracking your project 1.Decide on the reporting period based on when your financial system delivers verified actual costs 2.Set the status date to the end of the previous period 3.Set up a tracking view 4.Set up to use Physical % complete 5.Update dates and % using Physical % Complete and the EV methods 6.Add in actual costs and validate 7.Customize an EV View 8.Consider adding a budget/ commitment view

46. Tracking View

47. Steps in Tracking your project 1.Decide on the reporting period based on when your financial system delivers verified actual costs 2.Set the status date to the end of the previous period 3.Set up a tracking view 4.Set up to use Physical % complete 5.Update dates and % using Physical % Complete and the EV methods 6.Add in actual costs and validate 7.Customize an EV View 8.Consider adding a budget/ commitment view

48. Set up for Physical % Complete Select all tasks, then ‘multiple task information’ button, then General – Earned Value Method – Physical % complete

49. Set up to roll up Physical % Complete Format – Layout – Always Roll up Gantt bars

50. Steps in Tracking your project 1.Decide on the reporting period based on when your financial system delivers verified actual costs 2.Set the status date to the end of the previous period 3.Set up a tracking view 4.Set up to use Physical % complete 5.Update dates and % using Physical % Complete and the EV methods 6.Add in actual costs and validate 7.Customize an EV View 8.Consider adding a budget/ commitment view

51. Add in Actual Costs on a monthly basis Hints: Use mirror tasks if you don’t collect actual costs at the same level as you track progress Customize a flag field and build a task usage view where you only see the cost tasks Make sure that tools – options – calculations – Project Always Calculates Actual Costs is turned off Check that Actual Cost and ACWP match – sometimes Project still calculates actual costs that appear in ACWP but not in actual costs. Zero out all cells that you are not going to use to enter actual costs

52. Steps in Tracking your project 1.Decide on the reporting period based on when your financial system delivers verified actual costs 2.Set the status date to the end of the previous period 3.Set up a tracking view 4.Set up to use Physical % complete 5.Update dates and % using Physical % Complete and the EV methods 6.Add in actual costs and validate 7.Customize an EV View 8.Consider adding a budget/ commitment view

53. Customize an EV View Hints: Customize the ‘lights’ based on your threshold eg +/- 10% = green, 10-20% = yellow, 20% = blue

54. Consider adding a Commitment View

55. Setting up one EV project in MS Project Organization & Planning WBS Baseline EV Methods Tracking Reporting –Informal –Formal

56. Informal Report email report covering –Cost status (including commitment) –Labor hour status –Schedule Status (including critical path) –Earned Value report

57. Contractor Format – EV Report EARNED VALUE REPORT (SEPTEMBER 2005) ITEMCurrent Period Cumulative At Completion Budgeted CostVarianceBudgeted CostVariance Physical WBS ElementPVEVACSPICPIPVEVACSPICPIBudgetEstimateVariance % Co mpl ete 3Project3404688981.380.522,5401,2201,5850.480.772,5402,640-10048.03% 3.1Task A85321220.380.266803404450.500.76680780-10050.00% 3.1.1Sub task 120 21.0010.002520250.80 2535-1080.00% 3.1.2Sub task 2501020.205.005540600.730.6755100-4572.73% 3.1.3Sub task 3102150.200.13100801100.800.73100200-10080.00% 3.1.4Sub task 4501030.00 5002002500.400.80500 040.00% 3.2Task B751923262.560.591,8608801,1400.470.771,860 047.31% 3.2.1Sub task 120 21.0010.006803404450.500.7668050018050.00% 3.2.2Sub task 2501020.205.002520250.80 2560-3580.00% 3.2.3Sub task 3102150.200.135540600.730.675590-3572.73% 3.2.4Sub task 456010312.000.58100801100.800.73100130-3080.00% 3.2.5Sub task 556010312.000.585002002500.400.80500 040.00% 3.2.6Sub task 656010312.000.585002002500.400.8050035015040.00%

58. Contractor Format – Variance report

59. Contractor Format – Commitment Report

60. Contractor Format – EV Chart

61. Contractor Format – Baseline Change Summary

62. Contractor Format – Baseline Log

63. Contractor Format – Baseline Chart

64. The Benefits of Earned Value Accurate picture of contract status –cost, schedule, AND technical Early and accurate identification of trends and problems Basis for corrective action Supports mutual goals of contractor and customer –bring project in on schedule and cost

65. Questions?