Exotic EVM

Now that we have our “Earned Value” the next two indicators are most often used in a project portfolio reporting situation where program managers or senior project managers need some key KPI on a range of projects. These KPI are best displayed in a dashboard manner using an online reporting or collaboration tool such as Windows SharePoint Services™ (more on that later)

The values of these KPI's would provide a risk grading so that at a glance you could see if you had a problem (i.e. an SPI of < .8 is Red, .8 to 1.2 is orange and SPI of > 1.2 is Green)

The key benefit to using these measurement rather than raw dollars or hours is that its relative to the size of the initial budget. For example $10000 over budget might be a small or large depending on the size of the project but .5 as a cost performance index gives a relative measure regardless of the size of the budget that can be used to benchmark either against a corporate standard or against like projects.

The Key two Earned Value KPI that we will look at are:

SPI – Schedule Performance Index
Are we are accruing ‘earned’ costs faster or slower than budgeted (are we ahead or behind schedule) and by how much?
The formula for this is
SPI = EV / PV
A value of Less than one is behind schedule and a value of more than one is ahead of schedule.

Cost Performance Index
Are we under or over budget from an ‘earned’ perspective and by how much?
The formula for this is
CPI = EV / AC
A value of less than one is over budget and value of greater than one is under budget

Looking at our Sample Scenario the Dashboard entry on our Microsoft SharePoint Site for our on the second week would look like.





This concludes the series of articles on Earned Value, next series of articles we will look at using Windows SharePoint Services to help manage your projects.