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SPM lecture 25 -

The document discusses Project Tracking and Control and Earned Value Analysis (EVA) as essential concepts in project management. It outlines the processes involved in tracking project performance, managing changes, and assessing project health through key metrics such as Planned Value, Earned Value, and Actual Cost. The conclusion emphasizes the importance of these techniques for early issue identification and efficient resource utilization to achieve project objectives.

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3 views

SPM lecture 25 -

The document discusses Project Tracking and Control and Earned Value Analysis (EVA) as essential concepts in project management. It outlines the processes involved in tracking project performance, managing changes, and assessing project health through key metrics such as Planned Value, Earned Value, and Actual Cost. The conclusion emphasizes the importance of these techniques for early issue identification and efficient resource utilization to achieve project objectives.

Uploaded by

mediasales345
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Course Name: Software Project Management

Course Code: SESM-470

Semester: [BSCS-7] Credit hours: [3+0]

Presented by: Hina Mehjabeen

Week 15: Project tracking and control, earned value analysis

Project Tracking and Control and Earned Value Analysis (EVA) are crucial
concepts in project management used to ensure that a project is on track, within
scope, and meeting its objectives.

Project Tracking and Control


Project tracking and control are the activities that help a project manager ensure that
the project stays on course according to the project plan. These processes are
essential for identifying problems and making adjustments before issues become
significant.

The main components include:

 Monitoring Progress: Tracking the project’s actual performance against the


baseline plan. This includes regularly assessing the status of the project’s tasks,
milestones, timelines, and budgets.
 Identifying Variances: Comparing actual performance to planned
performance to spot any variances (differences).

For example:

o Schedule variance (Are we ahead or behind schedule?)


o Cost variance (Are we within budget?)
 Managing Changes: Projects often experience scope changes, resource
changes, or external influences that impact progress. Tracking and controlling
involves managing any changes and their impacts on the project.

This requires:

o Change requests and approvals.


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o Re-baselining schedules, costs, or scope if necessary.


 Risk Management: Proactively identifying risks, assessing their potential
impact, and developing mitigation strategies. This may involve tracking known
risks and implementing corrective actions if issues arise.
 Performance Reviews: Regular meetings with stakeholders and the project
team to review progress, resolve issues, and discuss corrective actions.
 Corrective Actions: If variances are identified or the project is off track,
corrective actions are implemented to bring the project back in line with the
plan. These actions may include reallocating resources, adjusting schedules, or
revising budgets.

Earned Value Analysis (EVA)


Earned Value Analysis (EVA) is a powerful technique used to assess project
performance in terms of both schedule and cost. It integrates project scope, schedule,
and cost to provide an objective measure of project health. EVA uses three key
metrics to evaluate performance:

 Planned Value (PV): The value of the work that was planned to be completed
by a specific time. It represents the budgeted amount for the work that was
scheduled to be done up to a certain point in the project.
 Earned Value (EV): The value of the work actually completed by a specific
time. It reflects the value of the work that has been completed in terms of the
original budget and scope.
 Actual Cost (AC): The actual cost incurred for the work completed by a
specific time. This includes all expenses incurred for the work performed.

Key Performance Indicators (KPIs) in EVA:

 Cost Variance (CV): Measures the difference between the earned value (EV)
and the actual cost (AC). It tells whether the project is under or over budget.

CV=EV−AC

o Positive CV indicates the project is under budget.


o Negative CV indicates the project is over budget.
 Schedule Variance (SV): Measures the difference between the earned value
(EV) and the planned value (PV). It tells whether the project is ahead or behind
schedule.

SV=EV−PV
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o Positive SV indicates the project is ahead of schedule.


o Negative SV indicates the project is behind schedule.
 Cost Performance Index (CPI): Measures the cost efficiency of the work
performed. It’s the ratio of earned value (EV) to actual cost (AC).

CPI=EV/AC

o CPI > 1 indicates that the project is under budget.


o CPI < 1 indicates that the project is over budget.
 Schedule Performance Index (SPI): Measures the efficiency of time
utilization on the project. It’s the ratio of earned value (EV) to planned value
(PV).

SPI=EV/PV

 SPI > 1 indicates the project is ahead of schedule.


 SPI < 1 indicates the project is behind schedule.

 Estimate at Completion (EAC): The expected total cost of the project based
on the current performance. It can be calculated in several ways, with the
simplest being:

EAC=BAC/CPI

where BAC is the Budget at Completion (total planned cost).

 Estimate to Complete (ETC): The expected cost to complete the remaining


work, given the current performance. It can be calculated as:

ETC=EAC−AC

Example of EVA in Practice:

Let’s say we have the following data for a project:

 Planned Value (PV): $100,000 (this is the value of the work planned to be
completed by a certain time)
 Earned Value (EV): $90,000 (this is the value of the work actually completed
by that time)
 Actual Cost (AC): $95,000 (this is the cost incurred for the work completed)

From this data, you can calculate:


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 Cost Variance (CV) = $90,000 - $95,000 = -$5,000 (The project is over


budget by $5,000).
 Schedule Variance (SV) = $90,000 - $100,000 = -$10,000 (The project is
behind schedule by $10,000).
 Cost Performance Index (CPI) = $90,000 / $95,000 = 0.947 (The project is
not performing well on cost; for every $1 spent, only $0.95 worth of work is
being completed).
 Schedule Performance Index (SPI) = $90,000 / $100,000 = 0.9 (The project
is behind schedule; for every $1 worth of work planned, only $0.90 worth is
completed).

In conclusion, Project Tracking and Control and Earned Value Analysis (EVA)
are vital for managing project performance, ensuring that any issues are identified
early and that resources are used efficiently to meet the project’s goals.

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