Monday, September 13, 2010

Earned Value Analysis - V (Quantifying the project schedule delays and cost variance)

Analytical parameters to the rescue:

When an CEO/Vice President/Delivery Head asks any project manager/project in-charge the following questions they are supposed to have answers for the following questions?

a. How much we are delayed?
b. How much we have earned till now in this project?
c. Whether our earnings till date are as per our budget or beyond our budgets?
d. Are we inline with our project schedule ?
e. How much effecient our resources are ?
f. How would you rate our project interms of Cost and Schedule?

In this blog we will discuss on the parameters which are necessary to answer these questions. I suggest to read my previous blog if you have not gone  across to know the fundamental parameters which are required to understand this blog.

1. CV - Cost Variance
Helps to determine whether your project has execeeded your project or its under budget. Its the variance between Earned Value(EV) and Planned Value (PV). (EV-PV)

2. SV - Schedule Variance
Helps to determine whether your project is as per the schedule or behind the schedule or ahead of schedule. Its determined with the help of the variance betwen the Earned Value and the Actual Cost. (EV-AC)

3. CPI - Cost Performance Index
Cost performance index (CPI) is a measure of cost efficiency. CPI is calculated as EV divided by AC. This would be indicating the cost for every single rupee spent.(EV/AC)

4. SPI - Schedule Performance Index
The rate at which the project scheduled deadlines are met as per the original plan. (EV/PV)

Please find the attached excel sheet which provides you an additional information on the CV,SV,CPI and SPI parameters.

Reference file for download:

1 comment:

Chellaiah said...
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