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Understanding the Earned Value Table in MS Project

    What is Earned Value?

    Earned value lets you evaluate the performance of your project in terms of its schedule, its cost and its work. Earned value lets you effectively compare baseline and actual values.

    Before you can analyse earned value you need to set a baseline for your project.  You can, as you probably know, set more than one baseline for your project but earned value calculations can only be based on one of these.  To select a baseline for earned value calculations open the Project options dialog from the FILE tab and navigate to the advanced options: look for the section titled Earned Value Options for this project and select a baseline in the dropdown as indicated below.

    earned value defaults

    You will also notice an option for Default task Earned Value method.  By default earned value is based on the % Complete field – the percentage of task’s duration completed.  If you were say making a physical product you may want to measure completion not in terms of duration but in terms of how much of the product has been completed.  This is where the Physical % Complete field comes into play which can be used when you are tracking progress instead of the % Complete field.

    You can switch the default to Physical % Complete if you want to measure earned value for most of you tasks using this method or you can switch between the methods for individual tasks by opening the task information dialog on the advanced tab and changing the option for the task as shown below.

    earned value method

    Status Date

    The status date is a reporting date.  It is the date up to which you want earned value calculated.  By default the status date is today’s date, but it can be changed say if you want to analyse earned value up to the end of the month or year.  Also, because there is often a gap between gathering information and having time to enter it into MS Project, a status date allows you to specify the date on which you collected the data.

    The status date and time can be changed on the Ribbon’s PROJECT tab in the Status group.

    setting the status date

    Earned Value Tables

    There are three earned values tables titled: Earned Value, Earned Value Cost Indicators and Earned Value Schedule Indicators.  We are going to look at the Earned Value table as it contains the majority of information we need for our analysis.

    By default these tables don’t exist on the tables menu, so you will need to select More Tables…  to view them as shown below.

    earned value tables

    The Earned Value table uses abbreviated column headings which can appear quite daunting to start with, so here are some definitions for you.

    Planned Value (PV) or Budgeted Cost of Work Scheduled (BCWS)

    This is the cost of the task as originally planned for.  The cost is calculated up to the status date.  So for example if task x when completed costs £1000 and the status date is set at half way through the task then the PV would be £500.

    In the example below the status date has been set at exactly half way through the task Code Back End.  You can see that the PV value is exactly half of the Budgeted at Completion (BAC) value which is the baseline cost of the task when completed.

    earned value table 1

    You may notice that Earned Value (EV) and Actual Cost (AC) values are currently zero.  This indicates that no work has actually been performed – so we are behind on our schedule.

    Earned Value (EV) or Budgeted Cost of Work Performed (BCWP)

    Earned value looks at the percentage of the work actually completed and tells us how much that work costs according to the baseline.  The cost is calculated up to the status date. So if half of the work has been completed and the status date is set at halfway through the task then the PV, EV and Actual Cost (AC) values will all be the same assuming no additional costs have been incurred.

    EV = baseline cost of the task multiplied by the percentage of the task completed.

    In this example the status date is exactly half way through the task Code Back End.  Half the work has been recorded as being complete.  PV says that the value of the work completed up to the status date should be £3,000 (according to the baseline).  The EV field is also the same: 50% of the total cost of the task according to the baseline and so is actual cost (AC) – what we have actually recorded as being spent.

    earned value table 2

    In another scenario with the status date again set at half way through the task, say we had only completed half the work we should have – so 25% of the task.  This is how things would look.

    earned value table 3

    PV is the same as it is not interested in what work has actually been done – just what according to the baseline should have been completed.  Earned value calculates 25% of the total cost of the task according to the baseline and actual cost records what we have actually spent – so EV and AC are still the same.  Notice the Schedule Variance (SV) value is now minus £1500.  SV calculates the difference between PV and EV.  So a negative figure tells us we have spent less than we expected up to the status date and are behind schedule.  A positive number would tell us we are ahead of schedule.

    Let’s take yet another scenario.  This time the status date is still at exactly half way through the task and 50% of the task has been completed.  However, there has been an increase in resource cost from £75 to £100 an hour.  How does this look in our Earned Value table?

    earned value table 4

    Well again PV tells us that we should have spent £3000. EV is the same as we have not fallen behind on schedule but the actual cost is now £4000. The Cost Variance (CV) value tells us that we have overspent by £1000.  CV calculates the difference between EV and AC: a negative figure indicates an overspend.

    EAC – Estimated At Completion

    The EAC field tells us the estimated cost of the task at completion.  Put simply the calculation looks at the over or underspend up to the status date and projects forward to estimate what the task will cost on completion.  It assumes a constant rate of under or over expenditure based on what has been spent so far – so it is a fairly crude calculation.

    The formula used to calculate EAC is:
    EAC = AC + (BAC – EV) / CPI

    CPI  (Cost Performance Index) is not a field we have come across yet.  It can be inserted into the Earned Value table or seen in the Earned Value Cost Indicators table.  CPI is calculated by dividing EV by AC.

    CPI= EV/AC

    Let’s look at our scenario again – shown below but this time showing the CPI field in our Earned Values table.

    earned value table 5

    The CPI is calculated as 0.75

    CPI = EV/AC or 3000/4000 = 0.75

    A value less than 1 indicates an overspend.

    So now we understand the CPI value let’s look at the EAC calculation in more detail.

    EAC = AC +(BAC-EV)/CPI or 4000+(6000-3000)/0.75 in our example, which equals £8000

    Now we have our EAC value we can calculate the difference between it and our baseline cost.  This is what the Variance at Completion (VAC) field does for us.  A negative figure tells us we have a projected overspend. In our example the VAC is -£2000.

    VAC = BAC-EAC

    Check out our video on the Earned Value Table…

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