Project Data Analysis

A Performance Measurement System provides data and reports required for effective analysis of variances. Performance Measurement variances result from comparison of Scheduled Work (SW), Performed (P), Actuals (A), Budget at Completion (BAC) and Estimate at Completion (EAC).

Comparison of Scheduled Work (SW) and Performed (P) provide an indication of aggregate schedule performance. The comparison, however, may not clearly represent the performance of work associated with specific milestones. Some work may have been accomplished out of sequence or ahead of schedule. Therefore, the formal time-phased scheduling system needs to be used to determine the status of specific activities and milestones.

Comparison of Performed (P) and Actuals (A) clearly indicates whether the work completed has cost more or less than was planned for that work. Analysis of these variances should reveal the factors which are causing the deviation from plan.

Comparison of BAC and EAC provides an estimated variance at the completion, of the planned element of work.

At the Task Manager level, the Task Managers analyzes variances which result from comparison of these five basic data elements, SW, P, A, BAC and EAC. Summarized data is used to provide contract status at the various levels of the Contract Work Breakdown Structure (CWBS) and organizational (OBS) performance data at all levels of management. This is why the Responsibility Assignment Matrix (RAM) is such an important tool. Back to Top

The data available from the Performance Management System (SW, P, A, BAC, EAC, Schedule Variance (SV), Cost Variance (CV) and Variance at Completion (VAC)) provides the current period and the cumulative to date performance status information for each CWBS and OBS element and level. If a significant variance is identified, then this data provides an indication of the magnitude of the potential contract impact in the future. Cost variances, schedule variances, and at completion variances are reviewed and reported at the Task Plan level to:

Variances will always exist, unless there is perfect execution of the Project Plan. Variances are not always a bad omen, or cause of concern, or an indicator of poor management. Significant variances are those variances that break predetermined thresholds, require management attention, and corrective action. Significant variance may mean the original plan was inappropriate, or the EVT was not appropriate, or the actuals (ACWP) were incorrect. Significant variances inform management that something needs to be examined, analyzed and proper corrective action instituted.

Comparing the value of work performed with the value of work scheduled determines Schedule Variance (SV). SV is a subjective indicator. It does not reveal the critical path. SV is an aggregate dollarized value of events ahead or behind schedule. Arithmetically, SV is expressed as:

Commercial ProjectsSV = P - SW

Government ProjectsSV = BCWP - BCWS

A positive schedule variance is an indication that in-process work is ahead of schedule. A negative schedule variance indicates that the in-process work is behind schedule.

Comparing the value of work performed with the actual cost of work performed determines Cost Variance (CV). CV is an objective indicator. CV is a dollarized value of what was accomplished for the resources expended. Arithmetically, this is expressed as:

Commercial ProjectsCV = P - A

Government ProjectsCV = BCWP - ACWP

A positive cost variance indicates that work was accomplished for less resource expenditure than planned. A negative cost variance indicates that work accomplished cost more than planned resource value.

Comparing the Budget at Completion (BAC) with the latest Estimate of Completion (EAC) determines the Variance at Completion (VAC). The VAC formula is arithmetically expressed as:

Commercial ProjectsVAC = BAC – EAC

Government ProjectsVAC = BAC - EAC

PERFORMANCE INDICES

Performance indices show the percentage of variation, between planned and actual performance, for the current period, cumulative to data time span, and at the completion of the task.

The Schedule Performance Index (SPI) and Cost Performance Index (CPI) are calculated in order to provide an efficiency factor for work accomplished during the current period and for cumulative data. The To-Complete-Performance-Index (TCPI) calculates an efficiency factor which must be attained, if the remaining work scope in order to complete the Cost Account within the forecasted EAC. The following paragraph discusses the analysis techniques that produce these performance indices.

Examples of SPI, CPI and TCPI are calculated using the following cumulative-to-date data:

Scheduled$45,600

Performed$50,800

Actual$42,900

BAC$200,000

EAC$180,000

The ratio of work accomplished versus work planned, for a specified period of time, defines the SPI. The SPI is an efficiency rating for work accomplishment. The SPI compares work accomplished to what should have been accomplished.

Commercial ProjectsSPI = P/SW

Government ProjectsSPI = BCWP/BCWS

ExampleSPI = 50,800/45,600

SPI1.11%

This formula produces a SPI which is referred to as SPIe. The e is an efficiency designation. The inverse of the formula, SW/P = SPIp. The p is a performance designation. The analyst should designate which SPI is being used in the Schedule Variance discussion.

The calculated SPI indicates that 1.11% of the work scheduled to be completed, has been completed through the current period. An favorable or ahead schedule indication exists. The analyst needs to keep in mind and be aware that a SPI of 100% indicates an on schedule condition. However, this performance indication may not necessarily provide the true status of the work accomplished, since some work may have been performed out of sequence or ahead of schedule. The Task Plan and program schedules must be used in conjunction with the SPI to provide valid Work In Process (WIP) status information.

The CPI is defined as the ratio work accomplished versus work cost incurred for a specified period of time. The CPI is an efficiency rating for work accomplished for resources expended.

Commercial ProjectsCPI = P/A

Government ProjectsCPI = BCWP/ACWP

ExampleCPI = 50,800/42,900

CPI1.18%

This formula produces a CPI which is referred to as CPIe. The e is an efficiency designation. The inverse of the formula, A/P = CPIp. The p is a performance designation. The analysis required to designate which CPI is being used in the Cost Variance discussion.

The calculated CPI indicates that for each actual $1.00 of resource expended $1.18 in earned value was received. A cost underrun or higher than planned efficiency indication exists for the period analyzed.

To arrive at a meaningful indication of schedule performance, the Schedule Variance (SV) must be related to the amount of work planned to have been accomplished. This is accomplished by converting the SV stated in dollars into a Schedule Variance Percent (SV%).

Commercial ProjectsSV(%) = P - SW / SW
or
SV(%) = SV/S

Government ProjectsSV(%) = BCWP-BCWS / BCWS
or
SV(%) = SV/BCWS

ExampleSV(%) = 50,800 - 45,600 / 45,600

SV(%)+.114
or
+11.4%

The example indicates that the Task Plan is 11.4% ahead of schedule. This cumulative calculated index data provides results consistent with the cumulative calculated SPI.

To arrive at a meaningful indication of cost performance the Cost Variance (CV) must be related to the amount of work accomplished. This can be accomplished by converting the CV stated in dollars into a CV stated as a percentage.

Commercial ProjectsCV(%) = P - A / P
or
CV(%) = CV/P

Government ProjectsCV(%) = BCWP-ACWP / BCWP
or
CV(%) = CV/BCWP

ExampleCV(%) = 50,800 - 42,900 / 50,800

CV(%)+.155
or
+15.5%

The example indicates that the Cost Account is 15.5% under target cost. The cumulative CV calculated index data provides results consistent with the previous cumulative calculated CPI.

The percent complete is the budget percent complete. Sometimes the Project Manager or PMO use time percent complete. Time percent complete is based on duration or time spans from a Network Logic Schedule (NLS) and normally does not equal budget percent complete. The criteria for a Performance Measurement system uses budget percent complete - - - not time percent complete. The Project Management Office (PMO) should perform analysis using all available data in the management information system.

Percent Complete

Percent complete is the relationship of the amount of work performed to date (P) to the amount of work scheduled (SW) for a specific element of the CWBS or the OBS. The base used to determine percent complete is the Budget at Completion (BAC).

The percent of work complete should then be analyzed by comparing it to the percent of work planned or scheduled to have been accomplished through the reporting period being analyzed.

By comparing the value of the work completed (25%) to the value of the work schedule for completion (23%) the conclusion of this comparison should yield results compatible with the calculated SV% (+10.2). The results in this example indicate that the effort is 2% (25% - 23%) ahead schedule at this time.

Analysis to determine realization of the EAC is performed by comparing the percent complete to percent spent. By using the data from the example provides an indication that the current EAC (180,000) may be understated and mathematically may be closer to $192,000 (25% of the work has been accomplished utilizing 21% of the budget instead of 24% of the budget as indicated by the EAC). This indicator points to the need for further review, of the remaining work scope value. This will help to determine the accuracy of the projected EAC.

The analysis techniques discussed above are used for activities which have already taken place. The analysis data is based on past performance and the results cannot be changed; however, the footprints left by these activities and events can be used to project future performance trends.

The To Complete Performance Index (TCPI), also known as the verification factor, is defined as the ratio of remaining work to remaining budget. The TCPI is calculated using cumulative-to-date information only.

TCPI DefinitionPlanned value of the work remaining / The estimated cost to complete

TCPI FormulaTCPI = BAC - P / EAC - A

ExampleTCPI = 200,000 - 50,800 / 180,000 - 42,900

TCPI(%)109%

The TCPI when compared to the cumulative-to-date CPI provides a meaningful data analysis tools which can be used to determine the accuracy of the remaining or - to complete - effort. A difference between the TCPI and cumulative-to-date CPI of more than ± 20% indicates that the EAC will probably not relate to the past performance. Using the cumulative-to-date CPI and TCPI calculations from the example:

The TCPI indicates that the Task Manager is projecting the performance on the remaining work will be accomplished at a decreased efficiency. For each budget dollar spent to date, $1.18 in value was received. Based on the TCPI of 109%, for each budget dollar of work remaining, $1.09 in value will be achieved. The efficiency factor for the remaining work scope is forecasted to decrease by 9%.

“Earned Value", Management by Objectives", and "Performance Management" are interchangeable.
"Cost Account Manager"(CAM), "Cost Account Leader"(CAL), and "Task Manager" (TM) are interchangeable.
"Cost Account Plan"(CAP), ", and "Task Plan" (TP) are interchangeable.
"Budgeted Cost of Work Scheduled" (BCWS) and "Scheduled Work" (SW) are interchangeable.
"Budgeted Cost of Work Preformed" (BCWP) and "Performed" (P) are interchangeable.
"Actual Cost of Work Preformed" (ACWP) and "Actuals" (A) are interchangeable.
"Project" as in Project Master Schedule and " Program" as in Program Master Schedule are interchangeable.