Earned value management

The Earned Value Analysis and performance value analysis (sometimes referred to as earned value method or labor value analysis ) is a tool of project controlling. It is used to assess progress of projects. The current date and cost situation is described by performance indicators. The key values ​​are planned value (English Planned Value ), actual costs (actual costs) and output value ( earned value ). By tracking the indicators for a trend analysis is possible.

Power value is the central figure in this model for monitoring project progress and associated costs. According to DIN 69901, earned value is the correct German term for Earned Value.

Overview

The performance value analysis describes a measuring method with which one can determine the progress actually achieved in relation to the planned target and evaluate. The power value (EV) is a measure of the work done and answers the question: "What does the customer get and what did he pay for it? "

The acronyms to denote the variables are largely established from the English language, so that dispensed with a translation into German.

For the use of performance value as a control agent in projects, the following steps are necessary:

Procedure for determining the power value (EV)

1 Determination of the work breakdown structure (WBS, Eng. Work breakdown structure ) or the target definition

2 costing ( based on a bottom- up calculation )

3 referencing of actual progress against the baseline

The efficient use of the power value analysis requires software support, such as through several PM tools (such as CoP - Controlling of Projects ) offer. The ratios are calculated automatically according to the above steps on plan and actual values ​​in real-time. A time-consuming manual processing of the data is therefore not required.

Definitions

Plan costs (PC)

The planned costs (PC, Planned cost) are defined at the beginning of the project in the work packages and spread over the duration of the project. Thus arises at any point in a project planned budget is allowed to be consumed by then. If these costs are exceeded, the project runs the risk that the overall budget at the end of the project is exceeded.

Example:

  • A painter should paint a wall in 5 hours.
  • The total value of the -subsystem consists of € 100 for wages and € 100 for color.
  • It is planned that the painter after 3 hours (3/5 of the total) has used up 3/5 of the total budget (3/5 of wages and 3 /5 of the cost of materials ) (linear progress accepted):
  • PC = 3/ 5 * ( € 100 € 100) = € 120
  • Another name in the power value methodology is Budgeted Cost of Work Scheduled ( BCWS ) or Planned Value (PV). The German name is budgeted cost of work scheduled ( BCWS ).

Actual Cost ( AC)

The actual costs (actual cost) are recognized over the variable AC. All but incurred at a time when labor costs (hourly consumption) and cost of the material are summed.

Example:

  • The painter has worked two hours and will involve taken an apprentice ( € 5 / h). The color was 30 % more expensive than expected.
  • Thus, the actual costs arising after 2 hours:
  • Wages = 2 * € 20 ( two hours painter) 2 * € 5 (2 hours apprentice ) = € 50
  • Material cost = 2/ 5 * ( 130 % * € 100) (cost of color) = € 52
  • AC = wages material costs = € 50 € 52 = € 102

Another name in the power value methodology is Actual Cost of Work Performed ( ACWP ). The German name is actual cost of work performed ( ACWP ).

Power value ( EV)

The power value (EV, earned value ) arises during the project work. It is calculated in monetary value or other agreed metrics. He is the amount for the services rendered so far, would have been paid under the assumption of planned resource costs. That EV represents the corresponding progress of work / completion of the total value of the -subsystem represents the German name for the EV is BCWP ( budgeted cost of work performed ). Another name in the power value methodology is Budgeted Cost of Work Performed ( BCWP ).

The power value indicates the actual value of the work performed. This ratio can be, one starts from a linear progress planned, calculated from the project budget (PB ) and the work progress of the activity:

Example:

  • A wall is to be deleted. The painter asked for it requires 20 € per hour. He estimates that it takes 5 hours for the work, that is, the wall will be deleted at € 100 wages. The color costs € 100 The total value (planned ) of the -subsystem is therefore € 200
  • After two hours 3/5 of the wall have been deleted. The EV at t = 2 h is therefore:
  • EV = € 200 * 3/5 = € 120

Schedule variance ( SV)

In the real project the absolute plan fulfillment is, however, very rarely given. Either you exceeded the planned targets or (in most cases ) is " lagging behind the plan ." This was accompanied by a deviation from the planned target, which is referred to as schedule variance ( SV schedule variance ). A negative Schedule Variance ( SV) indicates that the schedule ( schedule ) for the total project can not be complied with. It's in the SV ie not primarily a difference in cost, but the time delay.

Reminder: The EV is the value of the -subsystem according to the degree of progress achieved.

Example:

  • The painter has worked slowly and deleted after 3 hours only 1/ 5 of the wall. This results in a deviation from the plan (SV) of:
  • EV = (1/5 € 200) = € 40 ... reached value of the -subsystem after three hours
  • PC = (3/5 € 200) = € 120 ... of planned value of the -subsystem after three hours
  • SV = € 40 - € 120 = - € 80 ... negative value → time delay

Cost Variance (CV)

The cost variance ( CV cost variance ) is measured on the actual actual costs of the project.

Example:

  • The painter has been working for three hours and thereby added taken three trainees (5 € / h). The wall is painted only to 1/5. The color was 30 % more expensive than expected, that is, the total cost of the material for the trade amounted to € 130 The actual costs ( AC) are calculated thus:
  • AC = 3 * € 20 ( three hours painter) 3 * 3 * 5 € ( 3 trainees, 3 hours each ) 1 /5 ( 130 % * € 100) ( cost of color) = € 131
  • The EV for fifth stage of completion is: EV = 1 /5 ( € 100 € 100 reward scheduled work planned cost for color) = € 40
  • This results in three hours, a negative deviation from the cost plan (CV) of: CV = EV - AC = ( - € 91)
  • As can be seen in the diagram, there is a cost volunteers ( red curve) due to the increased labor costs ( every working hour now costs € 35 instead of the planned € 20) and material costs (the color is 30 % more expensive than planned).
  • In addition, the EV (green curve), the degree of completion, less after three hours ( 1/5) than planned (3 /5). This relatively small nursery leads update until the end of the project (linear extension of the red curve ) to substantial additional costs, especially since the work as planned will be done after five hours, but only after 3 * 5 = 15 hours.

Time efficiency (SPI )

By the time efficiency ( SPI, schedule performance index) is defined a measure of how far a project in terms of time is out of the planned target. A value greater than 1 indicates that the course of the project vonstattengeht faster than originally planned. Conversely, a value less than 1 is a project delay. The ratio of EV and PC is formed:

Example:

  • The initial plan of the painter was provided that after 2 /5 of the time the PC is 80 €. The painter has, however, only 1/5 of the painted surface, thus resulting in the following SPI:
  • EV = 1/5 * 200 € = 40 €
  • PC = 2/5 * 200 € = 80 €
  • SPI = 40 € / 80 € = 0.5
  • The SPI of 0.5 means the end of an extension of the project to 100% ( double time, because the painter has worked until now obviously only half- tempo). It is assumed here that the plan sub- fulfillment progresses linearly in the future and the painter not go as planned works fast or even faster as from now. This would be reflected in an improved SPI to the next reporting date.

Work progress

The work progress in percent is used as the basis for calculating the EV. It indicates the degree of fulfillment of a task based on the base unit ( usually hours or money).

Since the determination of a precise value can be very time-consuming, one usually works only with specified levels ( eg: 0 % - 25 % - 50 % - 75 % - 100 % or 0 % - 50 % - 100 %). Too little step for a process of long duration is a risk that reports and analyzes are distorted in this phase.

The work in progress is not a measure of EVA.

Cost (CPI )

The cost (CPI, cost performance index) measures the value of work done against the actual costs. A value greater than 1 indicates a cost savings in the project, on the other hand has a value less than 1 that the project develops more expensive than planned. The ratio of EV and AC is formed:

Example:

  • After two hours, the painter fifth of the area has completed and has 2 /5 of the ink consumed.
  • EV = 1/5 * 200 € = 40 €
  • AC = 2 hours * 20 € / hour ( wages ) 2/5 * 100 € (color) = 40 € 40 € = 80 €
  • CPI = 40 € / 80 € = 0.5
  • That is, the actual costs for the completion of 1/ 5 of the work sector are twice as high as planned. If we write the linear continuous, which means an increase in the cost of the overall project by 100%. Here, it is assumed that the painter for the rest of the work needed double cost.
Goal Value (economics)
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