The last article concluded with the realization that the Schedule Performance Index (SPI) is a useful indicator for determining overall project duration but only at the earlier stages of the project. As the project progresses towards completion the SPI cannot be relied upon for determining total duration. The Earned Schedule approach is an extension to EVM and enables creating an index that is accurate not only at the early stages of the project but also towards the end of the project.

To understand Earned Schedule let’s re-examine the following table and focus, initially on the results reported at the end of week 5.

Accumulated Week 1 Week 2 Week 3 Week 4 Week 5
Actual Cost (AC)

$19,000

$38,000

$57,000

$76,000

$95,000

Planned Value (PV)

$20,000

$40,000

$60,000

$80,000

$100,000

Earned Value (EV)

$16,000

$32,000

$48,000

$64,000

$80,000

           
CPI = EV/AC

$0.84

$0.84

$0.84

$0.84

$0.84

SPI = EV/PV

0.80

0.80

0.80

0.80

0.80

           
EAC = BAC/CPI

$237,500

$237,500

$237,500

$237,500

$237,500

Estimated Duration

12.5

12.5

12.5

12.5

12.5

Analyzing the status of the project at the end of week 5 you are able to make the following conclusions:

  1. The value of project throughput (Earned Value) is lower than the planned output (Planned Value) and the project is behind schedule.
  2. The Earned Value achieved at the end of week 5 ($80,000) was planned to be accomplished at the end of week 4 (see Planned Value for Week 4).
  3. In Earned Schedule terminology, the Actual Time (AT) is 5 while the Earned Schedule (ES) is 4.

Armed with this information you can now construct a revised, time based, Schedule Performance Index, calculated as SPIt (i.e. SPI based on time as opposed to cost) = ES / AT =4 / 5 = 80%. With this revised SPI we can estimate the Expected Duration (ED) as the total Planned Duration (PD) divided by SPI. ED = PD/SPIt = 10 / 0.8 = 12.5 weeks.

Let’s compare the revised approach to the one we presented last week. With the old approach, based on the original SPI, we calculated the following:

Accumulated

Week 9

Week 10

Week 11

Week 12

Week 13

Actual Cost (AC)

$171,000

$190,000

$209,000

$228,000

$237,500

Planned Value (PV)

$180,000

$200,000

$200,000

$200,000

$200,000

Earned Value (EV)

$144,000

$160,000

$176,000

$192,000

$200,000

           
CPI = EV/AC

$0.84

$0.84

$0.84

$0.84

$0.84

SPI = EV/PV

0.80

0.80

0.88

0.96

1.00

           
EAC = BAC/CPI

$237,500

$237,500

$237,500

$237,500

$237,500

Estimated Duration

12.5

12.5

11.36

10.42

10

With the help of Earned Schedule we get a more accurate and continuously correct Estimated Duration, as presented below:

Accumulated

Week 9

Week 10

Week 11

Week 12

Week 13

Actual Cost (AC)

$171,000

$190,000

$209,000

$228,000

$237,500

Planned Value (PV)

$180,000

$200,000

$200,000

$200,000

$200,000

Earned Value (EV)

$144,000

$160,000

$176,000

$192,000

$200,000

           
Actual Time (AT)

9

10

11

12

12.5

Earned Schedule (ES)

7.2

8

8.8

9.6

10

           
SPI($) = EV/AC

0.80

0.80

0.88

0.96

1.00

SPI(t) = ES/AT

0.80

0.80

0.80

0.80

0.80

           
Expected Duration (ED)

12.5

12.5

12.5

12.5

12.5

It is clear from the above two tables that while the Estimated Duration in the first table (based on SPI$) gets progressively out of sync, the Expected Duration in the second table (based on SPIt) maintains its accuracy and correctly predicts the total project duration.

This concludes the fourth instalment in the Earned Value for Dummies series. If you wish to receive working copies of the tables provided above please drop me a line at blog@quantmleap.com and I will send you the relevant spreadsheets.

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