Schedule Variance (SV) is a time deviation (formula: SV = EV-PV). $142.00 – $160.00 = – $18.00. Negative value means that estimated deadlines are due, while positive one means that the deadlines have been outpaced. We are behind schedule.
Cost Performance Index (CPI) is a cost performance index (formula: CPI = EV / AC). If the index is greater than 1 the budget is saved, if it is less than 1, the budget has been exceeded. In our case, $142.00 / $160.00 = 0.89. The budget over expenditure is 11%.
Schedule Performance Index (SPI) is a deadline index (formula: SPI = EV / PV). If the index is more than 1 the schedule is overtaken, if it is less than 1, the base schedule is outpaced. In our case: SPI = $142.00/$160.00 = 0,89. The schedule is 11% outpaced.
Estimate at Completion (EAC) represents the expected total cost of the project after the completion of the remaining work (Formula: EAC = BAC / CPI). In our case: $160.00 / 0.89 = $180.00. The current estimated cost of the project task is $ 180.00.
Estimate to Complete (ETC) calculates how much more money is required to complete a project (Formula: ETC = EAC-AC). In our case: ETC = EAC-AC = $180.00 – $160.00 = $20.00 are still required to complete the task.
Variance at Completion (VAC) indicates expectations for cost over expenditure or budget savings (formula: VAC = BAC-EAC). In our case: VAC = BAC-EAC = $160.00 – $180.00 = – $20.00. The budget over expenditure is $20.
Formulas for calculating the project status: EAC = AC + Button-up ETC, EAC = AC + BAC – EV, EAC = BAC / Cumulative CPI, EAC = AC + [(BAC – EV) / Cumulative CPI x Cumulative SPI], EMV = probability x impact, EV = BAC /% of completion, TCPI = (BAC – EV) / (BAC – AC).
Cost trend analysis
Cost trend analysis is a method of monitoring a project and the distribution of its costs. It is to align the budget for milestones, the entire project and the timely control of cost increases. Permanently monitored values are:
• Planned costs – what was originally planned for implementation.
• Actual expenses – what was actually spent on the work done.
• The cost of the work done is what was planned and actually spent on the work done. This includes the cost of work, materials, and external services.
• Space remaining is what is left to do and calculated as the difference between the amount of work planned and what was actually made by a certain time. Space remaining = planned costs – the cost of the work done.
• Additional expenses are the difference between actual and planned costs. Additional expenses = actual expenses – planned expenses.
“Cost trend analysis” diagram
V-fact is preliminary actual cost and a signal of overspending. V-fact = budget + additional expenses + space remaining.
Milestone trend analysis
Milestone trend analysis is a method of project monitoring, as well as its backlog or proceeding ahead of schedule. The method allows detecting deviations in the early stages and responding appropriately to improve the situation. The method is based on the analysis of current and planned milestones status. Each milestone has an estimated deadline, which is planned at the project planning stage. This time is the starting point of regular reconciliation. Upon the milestones completion those responsible report to the project manager on the work done. The report should answer the following questions:
• What has been done?
• What should be done to complete the milestone?
• Is the work due?
“MILESTONE TREND ANALYSIS” Diagram
The visual trend analysis is often displayed graphically.
Horizontal: reporting periods, for example, every week.
Vertical: the same scale with milestones marked. The milestones mark at X = 0, corresponds to the planned milestone indicators at the stage of project start.
The bisector indicates the position of the milestones reached.
During the reporting period, the chart is updated and analyzed. The chart indicates new forecast dates for milestones completion. Each milestone has a trend line (curve). When it reaches the bisector, it finishes.
The ideal state is when the line is clear and unchanged along the Y axis.
Vertical deviations (deviation of the predicted period from the originally planned):
Up: due deadline
Down: ahead of schedule.
Project Management Triangle
The Three Constraints are:
• Time required carrying out the project;
• Cost (money, people, budget);
• Scope (goals, tasks, quality).
An example of a good project development – The scope of work is met and even exceeded at lower costs and deadlines.
“PROJECT MANAGEMENT TRIANGLE” Diagram
An equilateral triangle with equal sides indicates the planned values for cost, time, and scope. The picture changes depending on the deviation from the baseline values.
Project results are measured at regular intervals.
Time is measured by the time spent on the project.
Actual expenses measure costs.
Scope is measured as a percentage of the planned and completed work.
Measured values on the reporting date are applied to the axes and generate a new triangle, which is different from the original equilateral triangle. Project Management Triangle is applicable to demonstrate intermediate and general project results.
Other Methods and Techniques
Assumptions Analysis is a method used for the accuracy analysis of the assumptions and the identification of project risks, caused by inaccuracy, incompleteness or contradictory assumptions. Any project and any specific project risk is initiated and executed based on a number of hypotheses, scenarios and assumptions. Assumptions analysis explores the validity of the assumptions applied to the project. This analysis allows identifying project risks arising from inaccuracies, instabilities, inconsistencies or incompleteness of assumptions.
Expected Monetary Value (EMV) Analysis is a statistical method that calculates the average result with future scenarios that might occur. Typically, this method is used as a part of decision tree analysis.
Variance Analysis is an analysis of total variance of content variables, cost, and schedule as variance of individual elements linked to certain factors and affecting the variables of content, cost, and schedule.
Schedule Network Analysis or Network Analysis is a method for determining early and late starts and early and late finishes for incomplete project operations. See also Critical Path Method, Critical Chain Method, analysis of available scenarios and resource leveling.
Trend Analysis is an analytical method using mathematical models to predict future results based on historical data. This method allows determining the variance from the base plan by cost, time or content using data from previous reporting periods and predicting the variance of this parameter at a certain point in the future, if no changes are made to the project.
Reserve Analysis combines analysis methods to identify the essential characteristics and interrelationships of the elements in a project management plan for establishing a reserve for the duration of the schedule, budget, estimated cost or project funds.
Sensitivity Analysis is a method of quantitative risk analysis and modeling used to determine the risks with the greatest likelihood to affect the project. The analysis establishes the impact of uncertainty of each project element within the studied project objective, if the remaining indefinite elements have basic values. Usually these results are presented as a tornado diagram.
Fast tracking is a special method for compressing a project schedule that changes the network logic by overlaying phases that would have been performed sequentially, for example, the design and construction phases, or parallel performance of planned operations.