Earned Value Management (Earned Value Analysis, EVA) is an interesting and useful project management technique that can be used to estimate project progress, its current status and also to forecast its future. This technique is included in PMBOK.

In this Case Study we describe how to perform EVA by means of Mindjet MindManager and Mind2Chart add-in v1.4.

Project Planning
Project Execution – Tips to make changes in the plan.
EVA data preparation
EVA Indicators calculation
   Execution “Live” Plan
   Initial Plan (Planned Project “As-It-Was”)
EVA Indices and Forecasts
Results

Project Planning

First we create the Plan of our project. We break tasks into smaller tasks; compose schedule by estimating time for the task implementation; allocate resources.

Pay attention on that correctly set dependencies between tasks create distinct scheme of the project, its inner structure. It’s easy to take in account changes in the project.

Dependencies can show that the implementation of some tasks needs the results of other ones; tasks are implemented by the same resources with full loading; task results should be agreed so their implementation is performed simultaneously etc.

As the example we consider Initial Phase and Phase 1 of the small IT project that will last from the 27th of November 2020 to the 4th of February 2021. As far as our project implementation period includes Christmas we include these holidays in our Master Schedule using Mind2Chart corresponding tool.

Resources here are the member of our project team. The cost of such resource item is corresponding hourly rate.

We obtain the Initial Plan mmap.

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Project Execution – Tips to make changes in the plan.

We save created and approved Initial Plan and start its execution. Execution “Live” Plan - that starts its existence as a copy of the Initial Plan - will be then edited rather frequently to reflect obtained progress. Mind2Chart gives us great options to take into account all changes.

Let’s suppose that during project implementation we faced to the following plan changes.

1. Task was finished earlier. 

In Initial Phase one task was performed earlier (GUI Prototype). But we were not able to start the next task earlier so the main plan didn’t changed.

To reflect this change in the plan we make the duration of the corresponding task shorter. Dependencies help to keep project structure unchanged.

2. Task was delayed.

In Phase 1 one task (Research for Feature 1) took much more time than it was planned. So all subsequent tasks started later.

To put this update into the plan we make the corresponding task longer. Due to the dependencies set all other tasks move in a proper way automatically.

3. Task was postponed.

After implementation of Feature 2 was started some problems occurred. We decided to postpone its implementation. After some time the developer finished it.

To take into account these changes in a proper way we transform the original task to the group task and include two new topics-tasks -  Start implementation and Continue of implementation . There is Finish-to-Start dependency between these two tasks. Start task has the same Start Date as the original task and finishes at the date it was decided to postpone the original task implementation. Its completeness percent is 100%. Continue of implementation task starts at the date it was decided to resume the implementation, its duration is estimated additionally. We assigned the same developer to this Continue task but it could be someone else.

4. Task attracted the additional resources.

Implementation of the Feature 3 wasn’t without problems either. It was important to finish it write on the planned time – so we added the new resource – Senior Developer 2 – to help Developer 2 to finish the task.

As far as Implementation of the Feature 3 is already a group task we don’t have to transform it. We just add the new topic-task inside the original group task – Help with Feature 3. Senior Developer 2 is assigned to this task. Task starts at the day when the second developer was attached and finishes in same day as the group task for Feature 3 is finished.

Some other small changes were also made.

Now we have the Execution mmap.

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As the result of all these changes the terms and the cost of our project were changed. But it’s still the running project. So how can we validate its status and progress, forecast the future? EVA gives us the corresponding tools.

EVA data preparation

Now we can start Earned Value Analysis. The first parameter we set is the Date of Analysis – all values will be counted from the beginning of the project till this date. Let it be the 25th of January, 2021.

First of all we have to calculate three main Indicators:

EV (Earned Value) – planned costs for actually completed work. In our terms it will be the actual completeness percent multiplied on the planned cost of the corresponding task. EV shows what part of the plan has been mastered till the moment.

AC (Actual Costs) – costs that were actually made till the current moment. For us it means the cost of actually worked hours for the tasks. AC it the cost of our project at the current moment.

PV (Planned Value) – planned cost of the work that should be completed till the current moment according to the plan. For us it means the planned completeness percent multiplied on the planned cost of the corresponding task.

We also need the Indicator BAC (Budget At Completion) – Planned Total Cost of the project.

To calculate these values we use Mind2Chart reports of two types: Total Cost Spreadsheet and Task Allocation Sheet for both mindmaps – Initial Plan and Execution “Live” Plan. To form the results of EVA we use MS Excel.

EVA Indicators calculation

Let’s combine data and add some calculations for both maps.

Execution “Live” Plan

Let’s take Task Allocation Sheet for Execution mmap. Here we can find Task Names, Start and Finish Dates, Duration, % Completed and some other values for tasks. We take this report as the base and add two more columns there – the first is the Cost column from the Total Cost Spreadsheet for Execution mmap (it represents actual costs for the completed tasks and re-estimated costs for the uncompleted ones); the second is Planned Cost values for the corresponding tasks from the Total Cost Spreadsheet for the Plan mmap. One should be attentive when transmitting these values: some of the tasks were not mentioned in the Plan, some changed their type (from single task to the group task).

Using these values we can count EV for each task:

EV (t) = %Completed (t)*Planned Cost(t).

The sum for this column represents the Earned Value for the project.

Here we can also count the Actual Cost. At the moment the calculation of this value (with taking into account holidays and working days as well as resources cost and load) is not automated in Mind2Chart. So yet we’ll try to calculate it ourselves.

We take the average value of the daily cost for the task

DCA (t) = Cost (t)/(Finish Date (t) – Start Date (t) +1)

and multiply it on the number of days the task has been performed. If the task is completed to the Date of Analysis then this number will be equal to (Finish Date (t) – Start Date (t) +1), if it’s not – it will be the number of days between Start Date (t) and Date of Analysis.

AC (t)=DCA(t)* Number of days t is being performed

The result is the Actual Cost for the task. This calculation can be inaccurate – it’s accurate within the last holidays.

The sum for all tasks gives us the resulting Actual Cost for the project to the Date of Analysis.

Initial Plan (Planned Project “As-It-Was”)

Here we take Task Allocation Sheet as the base as well. We just add the column Cost from the Total Cost Spreadsheet for the Plan mmap to this report. It will be planned costs for our project.

First indicator we get from here is BAC – it is equal to the Total Cost of the Plan (sum of the just added column).

Now let’s work with %Completed column. These values are all zeroes at the moment as soon as we haven’t work with this mmap – all data and all changes were performed on the Execution “Live” Plan. Our goal is to set the planned %Completed here. Actually it’s easy: it was planned that we would complete a 100% from Start Date to Finish Date. So if Finish Date is earlier than Date of Analysis then %Completed for the task is equal to 100%, if Date of Analysis is earlier than we resolve the proportion and obtain for the current task t:

Planned %Completeness (t) = 100%*(Date of Analysis – Start Date +1)/(Finish Date – Start Date +1).

As soon as we have Planned % Completed we can calculate Planned Value for each task as the product of its Planned %Completed and Cost (that is Planned Cost actually for our project). The sum of these values for all tasks is the Planned Value for the project to the Date of Analysis.

EVA Indices and Forecasts

It’s better to represent all obtained EVA Indicators on a separate Excel Sheet. There we have set the Date of Analysis too to use it in our calculations.

As soon as we have values for basic indicators we can calculate EVA Variations and Indices.

Cost Variation (CV) = EV – AC.

Cost Variation shows the variation between the plan and actual project status from Budget aspect. If this value is positive then our project is under the planned Budget, if negative – we are overrunning Budget. If it’s equal to zero then we are proceeding just in accordance to the planned budget of project.

In our example we’ve overrun budget due to all those task extensions and difficulties.

Schedule Variation (SV) = EV – BAC.

Schedule Variation represents the difference between plan and actual project status caused by Schedule variations (delays and/or earlier finishing). If this value is positive then our project is developing faster then it was planned. If it is negative then we are behind the planned schedule. If it is equal to zero then we work according to the plan.

In our example we are behindhand the planned schedule because of delays.

Cost Performance Index (CPI) = EV/AC.

CPI is similar to CV but it is relative value not absolute one. It is compared with 1 for analysis.

Schedule Performance Index (SPI) = EV/BAC.

SPI is relative analogue for SV. It’s value is compared with 1.

To-Complete-Performance Index (TCPI) = (BAC - EV)/(BAC - AC).

The TCPI projects what the CPI will be for the remainder of the project based on the manager's projection of subsequent performance. The TCPI should be compared to the CPI.

In our example they differ much so it’s not like the project will be finished in time and in budget. It can be successful only if the future tasks will be implemented much more effectively than the previous ones.

Using the obtained data we can calculate some forecasts about the actual cost of the whole project. In our analysis 3 forecasts are represented.

The first is Estimate At Completion counted according to the “Live” plan mmap (EAC (M)). It includes some re-estimated tasks so can serve as the source for such forecast. It is equal to Total Cost sum from the Total Cost Spreadsheet for Execution “Live” Plan.

The second forecast can be calculated with the assumption that the plan variations were untypical and they won’t occur again.

EAC (U) = AC + BAC – EV.

And the third forecast can be calculated with the assumption that the plan variations were typical and the same variations will take place in the future.

EAC (T) = AC + ((BAC - EV)/CPI).

The last mentioned forecast is the most pessimistic one in our example. And our own manual forecast made by means of task re-estimations is the most optimistic one although this actual cost is greater than the planned budget.

See the resulted Excel report.

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Results

EVA helps to observe the current project status, evaluate its past and future progress, detect risks and estimate their possible consequences.

It makes sense to perform such analysis rather often – it gives the vision of project dynamic. After we perform EVA once we obtain the scheme and ready Excel template for further analysis sessions. Thus we spend much less efforts to prepare the next analysis sessions.  

At the moment Mind2Chart Team works on the new version of Mind2Chart that will make described analysis process much more easier and quicker.