Welcome back to our course on Project 2016 Advanced.
In this section I’m going to concentrate on an example of Earned Value Analysis and
reporting.
But first of all I need to cover some general points about Earned Value Analysis, very important
points in fact, and then I need to look at the key Project options that are relevant
to Earned Value Analysis.
The first important point is that Earned Value Analysis is done on the basis of comparing
progress with a baseline.
It therefore makes it absolutely essential that you have saved a baseline.
Also the fact that you are comparing progress means that you must have recorded some progress.
So you may be in the very early stages of a project, maybe you only have one task in
progress but until you have recorded some progress information then Earned Value Analysis
won’t tell you anything at all.
The second important point which is closely related to that one is that you should have
pretty much all of your tasks, resources, assignments, etcetera in place before you
save the baseline which you are going to use for Earned Value Analysis.
There is little point in say putting half a dozen tasks, saving the baseline and then
putting in another 20 tasks and expecting Earned Value Analysis to tell you anything
useful.
Now that’s not to say that you won’t have change during the life of a project.
Let’s take the Farm_Foods_Web_Site_16 as an example.
Earlier on in the course we added a task here, task 21 User Testing, and because it wasn’t
in the baseline that we saved earlier on if we now run Earned Value Analysis and the figures
for User Testing will be included we will get a slightly misleading set of results in
relation to User Testing, Testing and in fact the whole project due to the fact that in
the comparison between the project as it is now and the baseline that was saved earlier
on there is a difference of one task.
You may well accept discrepancies like this one on the grounds that they are relatively
small percentage of figures overall.
But if you really did discover that you’d missed a whole chunk of a project or perhaps
part of a project is de-scoped, a whole set of tasks are to be taken out, it would be
much more useful to save a new baseline or at least adapt the original baseline to take
those tasks out of the original baseline.
Now as I’ll show you in a little while by default Earned Value Analysis uses the progress
to the status date against baseline, that is the default saved baseline.
If you do need to save a different newer baseline because of a major change to the project such
as realizing you missed something or a de-scoping or whatever other main reason may cause that
to happen then it’s a straightforward job to tell Project to do Earned Value Analysis
against an alternative baseline.
So let’s deal with this User Testing task.
Now one option I have is to save a new baseline but in this case that’s not really the right
thing to do.
I’ve already recorded progress on this project, some of those dates, for instance for Tendering
process and Requirements may well have changed since the original baseline.
And what I really want to do is to just add a task to the original baseline and not save
a completely new one.
So all I need to do is to select User Testing and then update the existing default baseline.
So that’s the baseline that I want, the one that’s just called Baseline and it’s
selected tasks and I want to roll up the changes in the totals there.
So the amount of work, cost, etcetera will all be rolled up into summary tasks.
So click on OK.
Project 2016 asks me to confirm that I’m updating a baseline.
Yes.
And there we are.
Our baseline now includes the baseline figures for that User Testing task.
The next general point I need to look at relates to percent complete.
I’m looking here at task 21, User Testing.
It’s a 15 day task and by default if at some point in that task I say it is a certain
percentage of the way through its duration, let’s suppose that we are five days of duration
through the task, then by default for resources that are assigned to that task the assumption
will be that one-third of the work has been done, five days out of 15.
Or if you like one-third of the cost has been incurred or one-third of the value has been
earned.
If for a particular task or even if for every task in a project that’s not how it works
then you may need to change the Earned Value method.
And I’ll talk about the two alternatives in just a moment.
Before I do that I should however warn you that we’re talking here basically about
resources that are accrued pro rata throughout the life of a task.
For resources where the costs are accrued at the start of a task or for resources where
costs are accrued at the end or indeed for costs assigned to a task that are accrued
at the start or at the end then this is not the case.
They will be accrued at the start or the end.
But where they’re prorated you have two choices.
Let’s open up this User Testing task.
On the Advance tab there is an Earned Value method box and the two options are Percent
Complete in which case if you have that selected for a task then Project 2016 does the calculations
for you based on the percentage of the way you are through a task.
So if you’re a third of the way through the duration it will assume that for appropriate
costs and resources you have incurred a third of the cost and earned one-third of the value.
Whereas if you specify physical percent complete you would need to enter this each time you
do a status update.
So for example, it may be that after a week of working on a task 30% of the duration of
the task has passed but the task is only 20% complete.
You would enter physical percent complete as 20% and this effectively overrides the
percent complete value for a task whose Earned Value method is physical percent complete.
Next let’s look at two very important Project options related to Earned Value.
They’re on the Advanced page in the section Earned Value Options for this project.
The first of them is the default Task Earned Value method.
For most of my projects I have this set at Percent Complete because for the sort of work
that I do it’s almost always the case that percent complete is calculated by project.
Now there are occasions where for specific tasks or perhaps groups of tasks I need to
change the Earned Value method to Physical Percent Complete.
Very occasionally I get a project where I reset this default to Physical Percent Complete.
But obviously exactly what you need to have that set to will very much depend on the sort
of projects that you manage.
The second very important option here is which baseline to use for Earned Value Calculation.
Now if for some reason you need to save a completely new baseline then you’ll need
to change this from the default of Baseline to whichever baseline you currently need to
use for Earned Value Calculations.
So clearly those two options are very important for Earned Value Analysis and reporting.
Let’s now take a look at an Earned Value Report for the current situation with the
website project version 16.
In the Cost section Earned Value Report.
And there are actually three charts there.
There’s an Earned Value Over Time chart, a Variance Over Time chart and an Indices
Over Time Chart.
Now at the moment because the level of if you like discrepancy from the baseline is
not great, you have a situation where, for instance, with the first chart there are actually
three lines.
You may only be able to see two because one of them is behind another one.
But let’s just quickly go over what these three charts show.
The first chart should show ACWP, ECWP, BCWS over time and the text to the right there
tells you how to interpret this chart.
If actual cost, ACWP, that’s the blue line, is higher than earned value, that’s the
red line, then the project is over budget.
If planned value, BCWS, that’s the third line, is higher than earned value that again
is the red line, then the project is behind schedule.
Now both of those are above the red line.
They almost exactly coincide with each other at the moment but you can see that both of
them are doing rather badly.
Now we see the variance over time.
So this is CV and SV.
And as I mentioned earlier on negative values are not good.
One point to note here is that the text on the right there is actually wrong.
It’s actually wrong in the previous version of Microsoft Project.
I’m rather disappointed that Microsoft haven’t fixed this.
But the last sentence there, If SV if positive then the project is behind schedule.
That should say if SV is negative then the project is behind schedule.
And then at the bottom there we have Indices Over Time, so this is the SPI and the CPI.
And again as I mentioned in the course you really want those to be at one.
But here as you can see they were pretty poor early on and they’ve sort of slightly improved
which is maybe a good sign.
But this chart also illustrates something you need to be very careful about with these
charts and that is that the horizontal line in each case is the future.
And because Project doesn’t know what’s going to happen in the future you just get
a horizontal line there which is particularly unhelpful and can be somewhat baffling when
you first look at these charts.
These charts really only have relevance up to the status date.
And so in the case of this third chart it’s up to that point there.
Beyond that the chart just bombs down to zero and then means nothing.
The other thing that is also quite unhelpful here is the horizontal scale definitely needs
some attention because all you can see is two digits for the year, but you know how
to do that.
You could actually customize this earned value report yourself and perhaps show weeks or
every alternate week on the horizontal scale to make it a little bit easier to see what
the dates actually are.
So that’s the current situation.
So what I’m going to do now is to demonstrate a very straightforward update to this project
and the effect it has on earned value.
And in the next section I’m going to set you Exercise 07 which will involve a much
more complex update to the schedule.
And it will be a bit of a challenge for you if only on the grounds that there are quite
a few instructions.
But let’s do a straightforward update this time.
Let’s go to the Project tab and let’s suppose that for one reason or another we’re
moving the status date two weeks forward.
So from July the 8th to July the 22nd.
And in that time nothing has happened.
The project has ground to a halt.
Nobody has made any progress on anything.
What do you think that will do earned value?
Well let’s look at the Earned Value Report now.
And what you’ll see is the effect is quite sharp even though nothing has happened.
Let’s deal with that first chart.
Now that gray colored line, the third line, relates to schedule.
And because BCWS has now gone way above BCWP you can see that the project is more behind
schedule than it was.
Look at the second chart.
Variance over time, SV, the red line has taken quite a dive downwards.
So given that the explanation on the right there is wrong, it should say If SV is negative
then the project is behind schedule.
It’s even more behind schedule now.
And then rather confusingly the colors switch in the third chart and now schedule is blue
and cost is red.
That’s not me.
That’s Microsoft.
You can see again that at a point in time the CPI has kept going.
So there’s no indication things are going to cost more, although it’s leveled out.
But the blue, the SPI, has taken quite a dive downwards and currently round about the 0.65-ish
mark.
So you can see what effect that lack of activity for a couple of weeks has had on earned value.
So that’s it for this section.
I’ll see you in the next one.