Category Archives: Project Management

Earned Value Management (EVM) Primer

As mentioned in the previous post, I will give you just a “Readers Digest” version of Earned Value Management (EVM).  Earned Value Management is a series of metrics that can be applied against a project schedule to determine the overall project “health”.    There have been studies done by the U.S. Government Accountability Office (GAO) that state that if EVM is applied to a project , at the 16 – 18% mark of project completion, it can be forecasted if the project will come in on time and on budget.


In this Primer, I will focus on just two of the standard metrics of EVM: the Schedule Performance Index (SPI) and the Cost Performance Index (CPI).  There are other forecasting metrics that I will cover in a future blog entry.


What is Earned Value Management?  Earned Value Management (EVM) is a project management technique for measuring the project progress.   EVM combines the measurements of scope, schedule, and cost in a single integrated system.  EVM can provide an early warning of performance problems within the project.   EVM promises to improve the definition of project scope, prevent scope creep, communicate objective progress to stakeholders, and keep the project team focused on achieving progress.


What are the basic features of an EVM implementation?

  • Project Plan that identifies work to be accomplished
  • Valuation of planned work, called Planned Value (PV) or Budgeted Costs of Work Scheduled (BCWS)
  • Pre-defined “earning rules” to quantify the accomplishment of work, called Earned Value (EV) or Budgeted Costs of Worked Performed (BCWP)
  • Actual Costs (AC), also known as the Actual Cost of Worked Performed (ACWP), is used to record the actual worked performed to date


A project well suited to EVM has some or all of the following attributes:

  • A clearly defined objective
  • Work taking place over an extended period of time
  • A high labor content
  • Easily attained cost forecasts
  • A formalized management structure
  • Cost and time limitations
  • A timely and proper accrual accounting system


Basic Earned Value Formulas:

  • Components
    • Planned Value (PV) : The summation of planned expenditure over time 
    • Earned Value (EV): The actual percentage completed of planned expenditure over time
    • Actual Costs (AC): The summation of actual costs expended over time 
    • Budget at Completion (BAC): The original project budget
  • Variances:
    • Schedule Variance (SV) = (EV) – (PV)
    • Cost Variance (CV) = (EV) – (AC)
    • Variance at Completion (VAC) = (BAC) – (EAC)
  • Indices:
    • Schedule Performance Index (SPI) = (EV)/(PV)
    • Cost Performance Index (CPI) = (EV)/(AC)
    • To Complete Performance Index (TCPI) = (BAC-EV)/(BAC-AC)
  • Forecasts:
    • Time Estimate at Completion (EACt) = (BAC/SPI)/BAC/months)
    • Estimate at Completion (EAC) = (BAC)/(CPI)
    • Estimate to Complete (ETC) = (BAC –EV)/(CPI)


We will focus on just 2 of the formulas SPI & CPI.  It is based on these 2 formulas and the understanding of each that helps us build the rest.  We will discuss the others in a future article.


Now for a quick example:


Here is an simple example of a 4 task project over a period of 7 months.  The illustration shows the budget allocated per task each month.

This illustration shows how the Planned Value (PV) is calculated at the beginning of the project.

Now let us take a look as of April 30th :

This illustration shows what the Project looks like as of April 30th.  For task #2 in the month of April, we did not fully finish what we had planned, but we did incur 8 units of costs against our budget.  There are different methods of applying the effort, for the purposes of calculating Earned Value (EV), of a started task but not completed task: Fixed Formula, Weighted Milestone, Percent Complete (Duration-based), and Apportioned Effort (Physical Percent Complete).  For this example, we will state that the task shows 0% unless 100% complete for the period.


Planned Value (PV) is calculated to be 60 at the end of April

Earned Value (EV) is calculated to be 44 at the end of April

Actual Value (AV) is calculated to be 52 at the end of April


So now let’s apply the formulas:

Schedule Performance Index (SPI) = EV/PV  44/60 = 73.3

Cost Performance Index (CPI) = EV/AV  44/52 = 84.6

So what does this mean?  According to our metrics we are approximately 26.7% behind schedule and from a Cost perspective, for every $1.00 that we spend, we are getting $0.85 worth of productivity.   My suggestion is to use Physical Percent Complete to determine the effort.  Remember, in our example we took an “All or Nothing” approach to determine where we stood on our task.  If we had finished 8 of the 16 units of work and we recorded an additional 8 units in April, then our SPI would reflect  52/60 or 86.7 and we are only 13.3% behind schedule and our CPI would reflect 52/52 or 1.00 and we are getting full value for the effort extended.

In my next series of installments, I will further discuss the advanced features of EVM as well as how to implement such metrics into your project scheduling.

For further reference, please look at the following: (1) Practice Standard for Earned Value Management by the Project Management Institute and (2) Earned Value Management by Quentin W. Fleming.  This and future articles were/will be heavily influenced by these two excellent publications.


1 Comment

Filed under Earned Value Management, PM Tools, Project Management

Baseline the Project Plan – The Start of Project Metrics

It has been quite a while since I added posts to this Project Management Blog.  I felt it was time share some additional experiences within the community.  After all, the key to life is giving back and I felt it is due time to do so.  

I remember the fear of baselining a project.  It seemed so mystical.  As if there was a lock of all data once you did so.  My perception was there had to be so many steps in order to do so . . . not so.  In MS Project it is just a couple of steps.  But the real power of the baseline comes into the picture when you start applying Earned Value metrics to your plan, which of course, requires a baseline.  More on Earned Value in my next blog entry.

But having a baselined schedule allows so many other views to your Project plan.  A baselined schedule shows when and what was originally planned compared to where you are now.  I can create reports that will show late starts, based on the baseline start date and current start date of a task ( I usually will have a visual flag in a column to represent late starts).   The same is true with late finishes.  No project or project schedule runs perfectly, so it gives you insight into what really is going on with the work.  Interruptions, delays, failure to deliver on time, trying to keep your vendors honest on delivery times, all of these can play havoc to a project.  Lessons learned after the project can help future projects in planning tasks and the effort and/or duration for these tasks.  

The “Key” to working with baselines is to not rebaseline everytime there is a slight change to the schedule.  There are some industries that do not allow changes to a baseline schedule unless the scope, time, or budget drastically changes, then a rebaseline may be in order.  My recommendation is to have a Change Control Board (CCB) that monitors change requests and that it is their decision to do a rebaseline and at that I suggest only rebaselining those tasks and sub-tasks that change, otherwise you will end up “forgiving” potentially bad project management and team members that did not deliver as promised.

The Baselined Schedule can be one of the best tools in a  project manager’s toolbox.  Don’t be afraid, embrace it.  

1 Comment

Filed under PM Tips and Tricks, PM Tools, Project Management

Meeting Agendas – Perception of Professionalism

 I remember the first project that I managed.  It was an ERP project for a client and the existing project manager was leaving to take a position with another company.  At about 9:00 in the morning the PM said “Since I am leaving, why don’t you run the status meeting today?”  The meeting was for 10:00 and I said “sure, no problem”.  Well, the managing V.P. from my firm was in attendance that day.

 We had the usual 30 person status meeting.  I was a little nervous, but I felt the meeting went well.  After the meeting, the VP wanted to meet to go over how the meeting went and for me to get his feedback.  Well, it was a meeting I would not soon forget.  He read me the riot act!  He let me know, in no uncertain terms, that I NEVER conduct a meeting without a meeting agenda.  The perception was that I, and the firm, where unprepared.  He stated that there was not the FLOW of a properly prepared meeting.

 I learned my lesson that day, and he turned out to be one of my best mentors.  He was right, of course.  The next meeting, I had the Agenda prepped days in advance and ran it by him just to make sure that it was appropriate.

  • What is an agenda?
    • It is a list is a list of the individual items that need to be discussed to achieve the meeting’s broad aims
    • Agendas may be drawn up and circulated to all participants before the meeting, or they may be agreed at the actual meeting.


  • Why is an agenda important?
    • Helps you prepare
    • Communicates expectations for the meeting
    • Provides a mechanism for order and control
      • Limits the tasks and participants
    • Helps measure success/failure of a meeting
    • Describes your objective(s) for the meeting and creates an outline of the steps to get to the goal
      • Assigns time buckets and set time limits
      • Schedules items in order of importance

 Here is the Mind Map template that I use for any meeting:


My Meeting Agenda Template

My Meeting Agenda Template

 All this will fill out a standard  Meeting Agenda template:


Meeting Agenda

Meeting Agenda

I know this may seem simplistic, but this will make your meetings more efficient and will give the attendees a feeling of confidence in the meeting organizer.  As a PM, you represent not only yourself, but also the organization.  The perception of professionalism is built at the start and it is up to you to maintain it.


Filed under PM Tips and Tricks, PM Tools, Project Management

Preparing Project Charters

I come from a consulting background where you were paid proportionately to the volume of paperwork that you produced.  Half joking aside, I have produced Project Charters that were well over 30 pages in length.  This begs the question, who truly reads them and what value does it bring to the project, team members, project sponsor and the steering committee? 

When I was the PMO Director of a Fortune 500 company, I created a template for Project Charters that would produce a 2 page document (3 pages if there were a lot of signatures).  The concept was that the document truly had to mean something to all of the people involved.  It had to lay bare the scope of the project . . .

So here is the process:

After assembling the team (and preferably the project sponsor) I would attach my computer to the projector so that all could see.  I would start up my Mind Mapping software (more on that later).   

It came down to a filling out a 6 step process template in order to create the Project Charter:


Project Charter Template

Project Charter Template


  • Step 1: Project Name
    • Process
    • Code Name
  • Step 2: Overall Understanding of the project

Instead of one overall Charter and individual Charters per phase, put all into one.

  • Define Phases
  • Define stages within Phases
  • Sub-projects
    • Define
    • Assign Leaders
    • May need separate Charter
    • Time Targets
    • Org Changes
    • Process Changes
    • Software tool
      • Define all Systems
      • Define all Vendors
    • Project Admin
    • Communication
      • Marketing of Project
    • Metrics
    • Rollout
      • By System
      • By Geography
  • Step 3: Objectives
    • Answer the WHY?
      • Understand Why the Company is doing the Project
    • Metrics
      • Measure

Measurability is a characteristic of the Objectives

  • Delta may need to be determined
  • Standardization
    • Ease of Use
    • Speed
    • Cost Reduction
      • Overhead reduction
    • Process
      • Refine answers
      • Increase productivity of operations
  • Step 4: Scope
    • Answer the WHAT?
      • Deliverables

Tie Scope to Deliverables

  • Step 5: Assumptions, Concerns and Constraints
    • Assumptions
    • Concerns
    • Constraints
  • Step 6: Stakeholders
    • Include people for political purposes
    • Program vs Project (or sub-project)
    • Customers
      • BU Manager
      • Division Presidents
    • Sponsors
      • Director
      • IT Working Council
    • Project Manager

Program Leaders

  • Could be Project Leader

May not do the Admin part

  • Project Analysts

To do the Admin part

  • Team Members
    • Own the task

 The process at first may seem hard to follow for some of the team members, but after a while, they get it and they are enthusiastic to participate.  The mind mapping software that I use is Mindjet Mindmanager .  I will provide future articles of my use of mind mapping in project management.

I take the results of what is created and produce a 2 – 3 page document.  We all agree to the Charter, because we all had a hand in its creation.  The process takes between 1 – 3 hours depending on the participative mood of the team and the level of depth of the project scope.  Then while everyone is in the room, I get all the team members signature as well as that of the project sponsor.

I would like to add the Mindmanager file *.mmap file but WordPress does not recognize this as a file for upload.  If anyone knows how I can do so, please comment on this site.   Thank you, Greg Cimmarrusti, PMP


Filed under PM Tips and Tricks, PM Tools, Project Management

First Post

As my first post, I believe that it would be good to talk about my mission statement for this blog.  I would like to discuss first hand accounts of projects gone well as well as those that propose more of a challenge.  I want to bring the latest news in the world of Project Management, Program Management, and Portfolio Management (3PM).

I have had my PMP since 2003.  I remember the studying and rote memorization of the different aspects of the PMBOK.  I was fortunate enough to take a prep course (Chetah Learning) and would highly recommend this route for those seeking to take the PMP.  A good friend of mine, Cornelius Fitchner, hosts the PMP Prepcast and I would recommend that people access this also.  Cornelius is the owner and host of the Project Management podcast as well.  This is probably the most listened to podcast for Project Management.  With well over a 100 episodes of all phases of project management, he continues to push the knowledge envelope for PM’s.

I look forward to this journey with you and may we both be better because of it. 

All the best,

Greg Cimmarrusti, PMP


Filed under General, Project Management