EVM (Earn Value Management) and MS PROJECT 2010

 

Hi,

in my last Post I have explained what is EVM! Now I will explain how to deal with it in MS PROJECT 2010!

First of all, here is the question: “What do we need for EVM?”. The answer is:

  1. Tasks
  2. Resources with pay rates
  3. All other costs (if any)
  4. Saved Baseline
  5. Actuals
  6. Status Date

For simplicity I will show how to make EVM on two Tasks, and one Resource:

image

Tasks are:

image

Now I will save the Baseline:

image

and then:

image

OK. Let’s look at the Cost table:

image

Each Task has planned 2 days Durations, which means 8 hours per day * 2 days * $100 per hour = $1.600

I have to tell MS PROJECT which Baseline to use for EVM:

image

and then:

image

OK! Now suppose that I did not put any actuals and that there are two days passed since project start, so it is 21.03.2012. I will make this data as a Status date:

image

and I will get:

image

Now, I will apply Earned Value Table to my View:

image

and then:

image

and finally I‘ll get:

image

TASK 1 is not finished, it is not started, and the Status Date is 21.03.2012. So Schedule Variance (SV) is $1.600! It is simple! But now, suppose that Task 1 is finished, but it duration was 3 days instead of 2 days (planned):

image

and then:

image

I will get:

image

As you can see: NOTHING CHANGED! Why? Is it a bug? No, it is NOT A BUG! Notice that Status date is still 21.03.2012, and that means that Earn Value Table calculates what was done until 19.03.2012 and 20.03.2012. Because Task 1 has start date 19.03.2012, and NEW finish date 21.03.2012, I will now make 22.03.2012 as Status Date, and I will get:

image

I will explain the figures:

  • Planned Value (or Budgeted Cost of Work Scheduled) for Task 1 was $1.600
  • Earned Value (or Budgeted Cost of Work Performed) for Task 1 was $1.600
  • Actual Cost is $2.400 (3 days * 8 hours per day * $100 per hour = $2.400)
  • Schedule Variance (in $) is 0 because the Task 1 is finished
  • Cost Variance is Earned Value – Actual Cost = –$800 (we had spent too much)
  • EAC (Estimate at Completion) is $2.400 (it is same as Actual Cost, because Task is finished)
  • BAC (Budgeted at Completion is $1.600
  • Schedule Variance for Task 2 is –$800 because the Task 2 didn’t start as planned! It is late 1 day

Now I will put Duration 6 days for Task 2:

image

As you already know I have to set a new Status Date if I want to see changes. I will set Status date one day after Actual Finish (e.g. 30.03.2012), and I will get:

image

I will explain the figures again (now for the Task 2 only, because figures for the Task 1 are the same):

  • Planned Value (or Budgeted Cost of Work Scheduled) for Task 2 was $1.600
  • Earned Value (or Budgeted Cost of Work Performed) for Task 2 was $1.600
  • Actual Cost is $4.800 (6 days * 8 hours per day * $100 per hour = $4.800)
  • Schedule Variance (in $) is 0 because the Task 2 is finished
  • Cost Variance is Earned Value – Actual Cost = –$3.200 (we had spent too much)
  • EAC (Estimate at Completion) is $4.800 (it is same as Actual Cost, because Task is finished)
  • BAC (Budgeted at Completion is $1.600

I can spend hours and hours to write this Post, to explain more and more complicated examples of EVM, but I will not. I will give you advice! If you are novice with EVM, BEFORE you use it LEARN IT. Slow, step by step, from simple examples to more and more complicated examples. If you will not take this approach you will find yourself very uncomfortable with EMV.

Good Luck!

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About Nenad Trajkovski

Location: Zagreb, Croatia Occupation: Project Manager Interests: Project Management and MS PROJECT He was born in Zagreb, Croatia at 1963. After completing his college he started working on projects in different business areas (banking, manufacturing, automotive industry, distribution, oil companies, etc.) developing and implementing ERP systems into different companies. He has got a lot of experience working with people in different business processes and also possesses great knowledge in information technologies and financial services. Today he works as a business consultant, adn Project Manager in PERPETUUM MOBILE d.o.o. Zagreb. He is a regular lecturer for Project Management in MS Innovation Center in Varaždin, Logosoft Sarajevo in Bosnia and Herzegovina and SEAVUS GROUP in Skopje Macedonia. He was named the best lecturer of WINDAYS 2008 while his lecture was also voted as the best. In addition, he was in TOP 10 lecturers at the MS SINERGY 2009 and MS VISIA 2009, 2010. Shares first place as the best lecturer of KulenDays 2009 and 2010 and PMI Conference 2009 in Zagreb. He is also a regular lecturer in the MS Community. He is a Certified Accountant and a PMP (Project Manager Professional) and a PMI-RMP (Risk Manager Professional), MCP, MCT, and Microsoft Certified Technical Specialist - Microsoft Project 2010. From 01.01.2012 awarded with MVP (Microsoft Most Valuable Proffesional - Microsoft Project)!
This entry was posted in MICROSOFT PROJECT, Microsoft PRoject 2010, MS PROJECT 2010, PMI, PRoject Management and tagged , , , , . Bookmark the permalink.

22 Responses to EVM (Earn Value Management) and MS PROJECT 2010

  1. Katarina Kety Brezak says:

    Thank you Nenad 🙂

  2. Mubashar says:

    Thanks, informative

  3. Anand says:

    Thank you Nenad! This is an excellent article, crystal clear.

  4. Stan says:

    Many thanks for this straightforward post.

  5. Pug McThug says:

    Hello Nenad, thanks for taking the time to post this, I was about to pull my hair out after rebaselining my project. Couldn’t figure out how to have MS Project generate EVM data using the new baseline, and your post showed exactly how to deal with it.

    Again – many Thanks!

    Pug McThug

    • Raffaele says:

      Hi Nenad, thanks for taking the time to post this.
      I am new with MS Project 2010 and I wonder if is there any way to export data into Excel 2010 in order to have an Ernad Value S-curves similar to those which was possible using MS Project 2003.
      Thanks in advance for your kind reply.
      Raffaele

  6. Mustapha says:

    Hello
    While using the Microsoft Project, to evaluate the implementation rate for my organizations workplan it seemed difficult to ascertain the percentage of amount spent from the budget or for each activity. It was however easy to get percentage of work completed. question 2 is thus how can this percentage of amount spent be rolled up?Can someone help shed more light on this aspect?

    • Nenad Trajkovski says:

      I will use custom fields, and then you can do whatewer you want!

      • Mustapha says:

        I will be very grateful for this, how soon can I get this?

      • Nenad Trajkovski says:

        I wrote about this in https://ntrajkovski.wordpress.com/2011/12/08/creating-own-budget-in-ms-project-2010part-1/ https://ntrajkovski.wordpress.com/2011/12/12/creating-own-budget-in-ms-project-2010part-2/

      • Mustapha says:

        Dear Nenad,
        This was very useful for me thank you so much

      • Mustapha says:

        can i send you a copy of the project? still have some issues

      • Nenad Trajkovski says:

        Of course you can

      • Mustapha Tanko says:

        Dear Nenad, This is a sample of the project, the workplan is structured in such a way that theresource names are the thematic arears such as SPO unit or HFO unit and the task all have the same timeline (Start and End date). I noticed that the amount of money set at the baseline reflects on all the task even if they have different cost attached to them.Can costing be done at the sub activity level? and finally how can i get percentatge of amount spent. Thanks a lot Nenad for the information you have shared this far.

        Thanks Mustapha Tanko..

        ________________________________

      • Nenad Trajkovski says:

        where is the mpp file?

      • Mustapha Tanko says:

        Sent it guess it dint attach…. can you send me your email?

        Mustapha Tanko..

        ________________________________

      • Nenad Trajkovski says:

        nenadtrajk@gmail.com

  7. Ramon says:

    Great Nenad, You are a Genius!

  8. Robert says:

    Thank you thank you thank you for posting this!

  9. Cinthya says:

    Totally useful! and its well explained thanks!

  10. Karthik says:

    Hi Nenad ,

    It was really useful & easy to understand also. Thanks!!

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