kat8of10 said:Hi Everyone
I know this sounds crazy; however, I have a custom that wants to
perform earned value management in their plan without entering any
work hours in the project plan.
Can this be done?
thank you
kat8of10,
Actually you can but I'm not sure how meaningful it will be. Of course
none of the built-in earned value fields will have any values, unless of
course all the resources are material resources in which case no work is
involved.
All you will really be able to "measure" is the expected percent
complete versus the actual percent complete. For example, let's say you
have a task with a duration of 20 days. By the end of the 10th day, the
task should be 50% complete but if consensus is that at the end of day
10 the task is only 40% complete, then you could say that the SPI is 0.8
(i.e. 40%/50%).
But, you might remind your custom(er) that effort (work) gets stuff
done, not the passage of time (duration).
John
Project MVP
You need some measure of "cost" be it hours, dollars, euros, or
fortnights to get a CPI. Without that all you can get is an SPI.
Ray, EVP, PMP
I don't see how it's possible to doearned valueat all without assigning
resources and tracking work hours. I say 'assigning resources' because work
doesn't exist without an instrument doing it. The SPI is defined as the
ratio between BCWP and BCWS, Budgeted Cost of WORK Performed to the Budgeted
Cost of WORK Scheduled. If you don't really need to track costs you can
still calculate the SPI by arbitrarily assigning a rate of $1.00 per hour
and calculateEarned Valuebased on what is really Work Hours rather than
Work Dollars but without considering the amount of work hours you simply
have nothing to calculate with. Duration doesn't do it sinceEarned Value
is a measure of how much work you got accomplished within a given duration
compared to the amount of work you should have done within the same
duration. So unless there is either unscheduled non-working time where no
activity takes place once the project is underway or the original duration
was overestimated, SPI calculated using duration will always be 1.0 at all
status dates. Using duration you could end up with a SPI < 1 even when
you're ahead of schedule or even worse, an SPI > 1 when you're really behind
schedule!
--
Steve House [Project MVP]
MS Project Trainer & Consultant
Visithttp://www.mvps.org/project/faqs.htmfor the FAQs
- Show quoted text -
John..
The important thing to remember is that EVM is a project management
tool, not a financial or schedule tool. EVM can (and is) done entirely
with staff-hours as a unit of cost. Staff-hours is a measure of cost,
not of time. (Fifty staff-hours could be a day, week, or month of
time.) Of course using staff-hours does not capture indirect costs,
material costs, or ODC, but for a labor intensive project staff-hours
works fine. Recall that the CPI is EV/AC, or BCWP/ACWP. The units
cancel! An estimate at complete from BAC/CPI can be staff-hours if
the project budget is staff-hours. Likewise the BCWS (PV) for tasks
and products can be in staff-hours. So staff-hours work in all cases.
The ANSI 748 EVM standard even cites "manhours" as a possible measure.
Most project managers in IT feel responsible for doing the work to a
budget of staff-hours. What the bosses and HR decides to pay people is
outside the PMs control. I think MSP has made this more confusing by
its apprach to the cost elements of a project.
I don't see how it's possible to doearned valueat all without assigning
resources and tracking work hours. I say 'assigning resources' because work
doesn't exist without an instrument doing it. The SPI is defined as the
ratio between BCWP and BCWS, Budgeted Cost of WORK Performed to the Budgeted
Cost of WORK Scheduled. If you don't really need to track costs you can
still calculate the SPI by arbitrarily assigning a rate of $1.00 per hour
and calculateEarned Valuebased on what is really Work Hours rather than
Work Dollars but without considering the amount of work hours you simply
have nothing to calculate with. Duration doesn't do it sinceEarned Value
is a measure of how much work you got accomplished within a given duration
compared to the amount of work you should have done within the same
duration. So unless there is either unscheduled non-working time where no
activity takes place once the project is underway or the original duration
was overestimated, SPI calculated using duration will always be 1.0 at all
status dates. Using duration you could end up with a SPI < 1 even when
you're ahead of schedule or even worse, an SPI > 1 when you're really behind
schedule!
--
Steve House [Project MVP]
MS Project Trainer & Consultant
Visithttp://www.mvps.org/project/faqs.htmfor the FAQs
John..
The important thing to remember is that EVM is a project management
tool, not a financial or schedule tool. EVM can (and is) done entirely
with staff-hours as a unit of cost. Staff-hours is a measure of cost,
not of time. (Fifty staff-hours could be a day, week, or month of
time.) Of course using staff-hours does not capture indirect costs,
material costs, or ODC, but for a labor intensive project staff-hours
works fine. Recall that the CPI is EV/AC, or BCWP/ACWP. The units
cancel! An estimate at complete from BAC/CPI can be staff-hours if
the project budget is staff-hours. Likewise the BCWS (PV) for tasks
and products can be in staff-hours. So staff-hours work in all cases.
The ANSI 748 EVM standard even cites "manhours" as a possible measure.
Most project managers in IT feel responsible for doing the work to a
budget of staff-hours. What the bosses and HR decides to pay people is
outside the PMs control. I think MSP has made this more confusing by
its apprach to the cost elements of a project.
Ray,
All I'm saying is that hours, whether staff or otherwise, do not produce
cost. Hours only produce a cost when there is a rate associated with
those hours. And yes it is true that CPI is dimensionless but to get CPI
the classical method of earned value uses BCWP/ACWP and both of those
metrics are in terms of cost. Let's not forget what CPI is - it is the
COST performance index, so without cost, CPI doesn't exist.
John
Project MVP
I don't see how it's possible to doearned valueat all without assigning
resources and tracking work hours. I say 'assigning resources' because work
doesn't exist without an instrument doing it. The SPI is defined as the
ratio between BCWP and BCWS, Budgeted Cost of WORK Performed to the Budgeted
Cost of WORK Scheduled. If you don't really need to track costs you can
still calculate the SPI by arbitrarily assigning a rate of $1.00 per hour
and calculateEarned Valuebased on what is really Work Hours rather than
Work Dollars but without considering the amount of work hours you simply
have nothing to calculate with. Duration doesn't do it sinceEarned Value
is a measure of how much work you got accomplished within a given duration
compared to the amount of work you should have done within the same
duration. So unless there is either unscheduled non-working time where no
activity takes place once the project is underway or the original duration
was overestimated, SPI calculated using duration will always be 1.0 at all
status dates. Using duration you could end up with a SPI < 1 even when
you're ahead of schedule or even worse, an SPI > 1 when you're really behind
schedule!
--
Steve House [Project MVP]
MS Project Trainer & Consultant
Visithttp://www.mvps.org/project/faqs.htmforthe FAQs
Ray,
All I'm saying is that hours, whether staff or otherwise, do not produce
cost. Hours only produce a cost when there is a rate associated with
those hours. And yes it is true that CPI is dimensionless but to get CPI
the classical method of earned value uses BCWP/ACWP and both of those
metrics are in terms of cost. Let's not forget what CPI is - it is the
COST performance index, so without cost, CPI doesn't exist.
John
Project MVP- Hide quoted text -
- Show quoted text -
Hi Everyone - Thank you so much for the time you took to help me out
on this. It has been my experiencing trying to do this that I need
work and that what you posted it absolutely true. What has been
happening with the customer is that they are entering actuals and thus
taking control from what MSP does best. This has created a lot of
issues in the plan and reporting. i will need to consult with the
customer and see how we can minimally get generic resoruces assigned
with a standard rate and then assign work based on an 8 hour day.
Hopefully they will see the light in this and your comments will
help.
I also am considering inputting standard rates in my global that are
not based on firm data (ie, assign all resources at a $50/hour
standard rate). This will allow me to get the EV into the system and
start to show mgmt how it works. has anyone had any experience trying
to get EV into the organization in this manner?
Thank you ALL again - most helpful
K
kat8of10 said:Hi Everyone - Thank you so much for the time you took to help me out
on this. It has been my experiencing trying to do this that I need
work and that what you posted it absolutely true. What has been
happening with the customer is that they are entering actuals and thus
taking control from what MSP does best. This has created a lot of
issues in the plan and reporting. i will need to consult with the
customer and see how we can minimally get generic resoruces assigned
with a standard rate and then assign work based on an 8 hour day.
Hopefully they will see the light in this and your comments will
help.
I also am considering inputting standard rates in my global that are
not based on firm data (ie, assign all resources at a $50/hour
standard rate). This will allow me to get the EV into the system and
start to show mgmt how it works. has anyone had any experience trying
to get EV into the organization in this manner?
Thank you ALL again - most helpful
K
Ray,
First of all, you're welcome and thanks for the feedback.
Here's a little history behind my initial response. At the company where
I worked, we used Project as the planning and schedule tracking tool but
another system (MPM) to calculate earned value (EV) metrics. For our
needs, the plan was developed and baselined in Project and that data was
then uploaded to MPM. Each month, cost account managers entered
completion data for each task into their Project plan. That data was
then uploaded and used to calculate EV metrics using ACWP from our
financial system. So there are a couple of ways to look at what your
customer is doing. On the surface it appears they don't understand how
Project works and are basically defeating Project's EV functionality. On
the other hand, if they are really using a more precise method of
measuring actuals (i.e. ACWP from the company financial system), then
perhaps they are doing something similar to what we did.
You can use a generic rate of $50 per hour but $1 per hour works just as
well. Some users use this method to "hide" their true rate data from
customers, vendors, etc. while still being able to calculate EV metrics.
Hope this helps.
John
Project MVP
kat8of10 said:On Mar 25, 2:07 pm, "Steve House" <[email protected]>
wrote:
I don't see how it's possible to doearned valueat all without assigning
resources and tracking work hours. I say 'assigning resources' because
work
doesn't exist without an instrument doing it. The SPI is defined as
the
ratio between BCWP and BCWS, Budgeted Cost of WORK Performed to the
Budgeted
Cost of WORK Scheduled. If you don't really need to track costs you
can
still calculate the SPI by arbitrarily assigning a rate of $1.00 per
hour
and calculateEarned Valuebased on what is really Work Hours rather than
Work Dollars but without considering the amount of work hours you
simply
have nothing to calculate with. Duration doesn't do it sinceEarned
Value
is a measure of how much work you got accomplished within a given
duration
compared to the amount of work you should have done within the same
duration. So unless there is either unscheduled non-working time where
no
activity takes place once the project is underway or the original
duration
was overestimated, SPI calculated using duration will always be 1.0 at
all
status dates. Using duration you could end up with a SPI < 1 even when
you're ahead of schedule or even worse, an SPI > 1 when you're really
behind
schedule!
--
Steve House [Project MVP]
MS Project Trainer & Consultant
Visithttp://www.mvps.org/project/faqs.htmfortheFAQs
Hi Everyone - Thank you so much for the time you took to help me out
on this. It has been my experiencing trying to do this that I need
work and that what you posted it absolutely true. What has been
happening with the customer is that they are entering actuals and thus
taking control from what MSP does best. This has created a lot of
issues in the plan and reporting. i will need to consult with the
customer and see how we can minimally get generic resoruces assigned
with a standard rate and then assign work based on an 8 hour day.
Hopefully they will see the light in this and your comments will
help.I also am considering inputting standard rates in my global that are
not based on firm data (ie, assign all resources at a $50/hour
standard rate). This will allow me to get the EV into the system and
start to show mgmt how it works. has anyone had any experience trying
to get EV into the organization in this manner?Thank you ALL again - most helpful
K
Ray,
First of all, you're welcome and thanks for the feedback.
Here's a little history behind my initial response. At the company where
I worked, we used Project as the planning and schedule tracking tool but
another system (MPM) to calculateearned value(EV) metrics. For our
needs, the plan was developed and baselined in Project and that data was
then uploaded to MPM. Each month, cost account managers entered
completion data for each task into their Project plan. That data was
then uploaded and used to calculate EV metrics using ACWP from our
financial system. So there are a couple of ways to look at what your
customer is doing. On the surface it appears they don't understand how
Project works and are basically defeating Project's EV functionality. On
the other hand, if they are really using a more precise method of
measuring actuals (i.e. ACWP from the company financial system), then
perhaps they are doing something similar to what we did.
You can use a generic rate of $50 per hour but $1 per hour works just as
well. Some users use this method to "hide" their true rate data from
customers, vendors, etc. while still being able to calculate EV metrics.
Hope this helps.
John
Project MVP- Hide quoted text -
- Show quoted text -
John..others...
The MOST important aspect of EVM is the work completed needs to be
determined INDEPENDENT of time or money or staff-hours spent!.
Therefore common MSP approaches to "work completed" that depend on
hours recorded against task budget, or days since the task was started
against task timeline, defeat the idea of EVM. You've got to walk the
"factory floor" and see what was accomplished. You can not determine
EV by sharing your cubicle with a {computer} mouse.
Ray
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