Implement EVM Using MS Project

-- Vivek Prakash

Earned Value Over Time Report

In the last  post we went through 10 steps to implement EVM. Three things are important. First we must plan, second we must baseline the plan (PV) when it is finalized and third  track it by collecting actual data of achievement (EV) and money spent (AC).  Now you can calculate EVM metrics using PV, EV & AC. You don’t need any tool as such to take these steps but using a tool like MS Project which has several things inbuilt for EVM, make work easy and quick.

Let’s see how we can take those ten steps using MS Project and how MS Project will help us tracking project using EVM. (This is written considering 2010 version but it is applicable for older  versions as well.)

1. Define project objectives in terms of technical, time and cost performance: At this stage, define a objectives in terms of what is to be achieved (high level deliverables), when is to be delivered (milestone plan) and in how much money (over all budget). Also setup some basic option in MS Project (File—> Options) before start like currrency to be used, unit of work, duration (hours or days or weeks etc.), working hours per week etc. etc. Decide if you will estimate task in terms of duration or work.  Decide on one and stick to it for entire project.

2. Define scope in terms of WBS: Subdivide high level deliverables into smaller more manageable deliverables  up to the task level  and enter them into task column of Gantt Chart view of MS Project. This could be iterative process. Do this until you have all activities of the project in the task list. If any activity is not in task list should not be carried out as part of the project, only then we can say complete scope is defined. Use indent and outdent to group the tasks for a deliverable or bigger tasks. Estimate work or duration for each activity (tasks that are at the leaf level in the WBS hierarchy) and enter into work or duration  column.

3. List all the resources: Human, Material & other associate cost: Identify all skills for human resources (work resources), raw material required (material resources) and all sort of cost associated with project like traveling, transportation, entertainment, food etc. (cost resources) Enter all resources in resource sheet view. Define percentage availability (Max Units) for all work resources and define unit of measure (Material Label)  for material resources. For cost resources, no more information except the name is to be provided.

4. Setup a cost structure: Identify a cost rate to each human and material resource. Enter per hour rates (StdRate) for each work resource. Enter StdRate per unit of measure (you specified in Material Label) for each material resource. You need not to specify any rates for cost resources at this stage.

5. Identify dependencies among various WBS items: Identify external & internal and mandatory & discretionary dependencies among various deliverables and tasks in WBS. You can do a brain storming or can use DSM (Refer earlier post) to identify dependencies.

6. Prepare a plan:  Let’s get started to prepare a schedule. First, link the tasks based on dependencies you have identified in last step. Second, assign resources (listed in Resource Sheet) to tasks. When assigning cost resources, you need to provide a budgeted cost. After these two steps you have a plain vanilla schedule in front of you. You can add constraints and make changes based on various situation in your projects. You can compare this schedule with objectives defined in Step 1 in terms of time line, milestones, cost etc. and make adjustment as required.

7. Prepare a budget: Based on planned cost to be incurred on each deliverable and activity, you now have a time phased budget for the project. You can go in visual report and generate a  cashflow  reports. In general this graph appears like S. This is planned cost baseline.

8. Baseline the plan: If schedule is ok with all stakeholder, baseline this schedule. This will give planned value (PV) of the project/deliverables/activities at any point of time during project lifecycle.

9. Collect the actual data: Execute the project as per plan. The important thing here is what information you collect for the work done. Three things you need to collect from your teammembers.  1. How much work is accomplished (EV), 2. How much efforts (or duration if you have estimated in duration) is spent (AC) and 3. How much efforts (or duration) is remaining (forecast). Collect this data at a regular interval and update the plan. Do not forget to update status date.

10. Measure, analyze and forecast: You have done hard work in previous 9 steps, now it is MS Project’s turn to give you back. All EVM calculations are inbuilt in the MS Project, and get calculated every time you update the schedule. You just need to change some view and tables to  get advantage of these inbuilt features.

You can see EMV parameters in following tables
Earned Value
Earned Value Cost Indicators
Earned Value Schedule Indicators
You can customize a view to have all the columns from above tables which you want to track.
You can use an inbuilt visual report “Earned value over time report” to sketch the S curve at any point of time.

To leave a comment, click “Add new comment” below