QSO-420 5-2 Milestone 3
docx
keyboard_arrow_up
School
Southern New Hampshire University *
*We aren’t endorsed by this school
Course
QSO-420
Subject
Industrial Engineering
Date
Jun 12, 2024
Type
docx
Pages
6
Uploaded by GeneralExploration7689
5-2 Final Project Milestone Three
QSO-420 Integrated Cost and Schedule Control
SNHU
Amanda Young
June 5, 2024
EVM Statistical Use
Earned value management utilizes data to track and measure project schedule performance, project budget, and project technical performance. Live data is taken from the baseline data utilizing several EVM formulas for project trends throughout the project timeline. Cost performance index (CPI), schedule and performance index (SPI) are run for index related statistics while cost variance (CV), schedule variance (SV), and variance at completion (VAC) are performance-based statistics. Actual cost (AC), budget at completion (BAC), earned value (EV), estimate at completion (EAC), estimate to complete (ETC) and planned value (PV) are budget related statistics. The statistics is an accurate way to track trends with project budget and timelines. For example, the CPI can show if the project is trending over-budget or under-budget and SPI can show if the project is on time, behind or ahead of schedule. The project manager can then allocate more or less resources or budget depending on critical path items. Interpretation of EVM Statistics – Case Study
Currently, the project is well over budget for the month of June and July for both GUI and product management as seen in Figure 1 below. The timeline for the project seems to be on track except for some minor fallbacks like the GUI POS and GUI consulting company roll up which started in the month of July. The project seems to be over budget due to trying to hit the project timelines as the schedule impact seems to hit 100 percent even though the cost impact in the 80 percentile for both GUI and Product Manager. This is reflected in the ABC Consulting Company as they went over budget by $1,764,280 just in the month of July but their schedule impact was
still at 100%. This is also reflected in the control ratio which is determine by the SPI multiplied by the CPI. This gives an overall aspect of the portions of the project and how it’s performing. The desired control ratio is 1 with less than 1 meaning over budget and behind in the timeline. Over 1 means the project is ahead of schedule and the budget is underspent. EVM Figure 1: Example of GUI Project Schedule and Cost Impact – IT Staff
EVM statistics provides an accurate and objective view of the project is doing with budget and schedule. (Lockhart, 2023) As you can clearly see in Figure 1 above that the budget is going over but the project schedule is on track showing that possibly that more money is being
spent to hit project deadlines. The statistics can give accurate progress of the project throughout the project and can adjust funds and time where the project needs it most in order to hit both cost and schedule. (Breuker, n.d.)
Role of EVM Principles
EVM statistics provides objective measurements to the project by providing a percentage of progress completed and can help assess risk within the project. (Breuker, n.d.) In particular,
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
the role of integrates cost and schedule can help compare planned costs with the progress of the project and break down the project into smaller sections to enable easy tracking. (Sparrow, 2002)
In Figure 2 below, it shows the EVMS variances of time verses cost and how the two are measured within the project. This is measured by taking the planned value of work (BCWP) verses what has actually been done (ACWP) showing the what the project has accomplished. (Sparrow, 2002) Accurately accessing work that is performed from the planned work can mitigate risks, evaluate changes within the project, forecast any risk impacts, and estimate schedule and costs for future workload.
Figure 2: Interpretation of Integration of Cost and Schedule Control – Case Study
The case study calculations for integration of cost and schedule control are successful as they have included BCWS, ACWP, SV, SPI, CV, CPI, and CR. The project manager can see that as of June and July that the project has overspent on budget but are still hitting timelines. An adjustment is needed and will have to do additional project shifts to accommodate the over budget costs that the project has already spent. There were a few portions of the project where
the schedule was behind, and the amount can be calculated by taking the schedule variance and dividing that into the average monthly BCWS. Even though the integration of cost and schedule control were successful, to truly get the full picture, the project manager would need to compare this with the WBS to fully understand if the project is running successful or not. The WBS can show more information and what tasks are on critical path where the integrated costs and schedule control just shows the variance from planned to actual work being performed. (Sparrow, 2002)
Recommendations for Improvement
As stated above, integration of cost and schedule control is only one aspect of earn value management. To really get the full picture of the project schedule and cost, it would need to be compared to the WBS. The SPI and CPI can alarm the project manager to certain activities within the project so the risk can be dealt with immediately and not cost the project more time and money. Additional calculations may be needed to help the project on track with budget and schedule like future resource requirements (planned duration/SPI), forecast of remaining time (planned duration/SPI – time already elapsed), confirmation of schedule performance (project length
time ahead or behind/project length), and amount of time behind or ahead (schedule variance/average monthly BCWS). (Sparrow, 2002)
Resources:
Lockhart, Liz (2023) Earned Value Management: A useful Way to Measure Project Performance, Float, https://www.float.com/resources/earned-value-
management#:~:text=Using%20EVM%2C%20you%20can%20identify,on%20track
%20and%20within%20budget
.
Breuker, Michael (n.d.) 5 Benefits of Earned Value Management, Pinnacle, https://www.pinnaclemanagement.com/blog/5-benefits-of-earned-value-management-evm
Sparrow, H. (2002). Integrating scheduling and earned value management (EVM) metrics. Paper presented at Project Management Institute Annual Seminars & Symposium, San Antonio, TX. Newtown Square, PA: Project Management Institute, https://www.pmi.org/learning/library/integrating-scheduling-evm-metrics-8516
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help