Monday, January 7, 2013

W10_Reginald Nwachukwu_Performance Measurement Using Earned Value Management



1. Problem Definition or Opportunity Statement:


To measure individual performance on key project deliverables for AACE Certification Prep Course 2012 using earned value analysis/calculations.

Data are collected and recorded using weekly timecards and blog postings approved by Dr. PDG 




Figure 1 Record data collect from weekly timecards and approved blog postings


2. Development of Feasible Alternatives:


There are three methods used to measure performance in earned value analysis and calculations. Its an integrated management system that combines scope, schedule and cost together to determine and evaluate the progress and performance of any enterprise. These methods are feasible alternatives that can be used to compute and measure performance of individual, project or program efforts. Only the discrete effort is considered

Performance Measurement Methods:    
                                                                                                                                                                                   
(A) Discreet Effort:     
                                                                                                                                                                                  
 1. Start/Finish (Fixed formula) Method        20/80, 35/55, 0/100 
                                                                                                            
 2. Unit CompleteMethod                             physical quantity count 
                                                                                                                 
 3. Increamental Milstone Mthod                   % complete based on             
                                                                       milestone complete   
                                                                                                          
 4. Percent Complete                                    based on detailed steps  
                                                                     or hrs necessary to 
                                                                     complete the task    
                                                                                                                                                                                       
 (B) Apportioned Effort
                                                                                                                                                                       
 (C) Level Of Effort (LOE)




3. Development of Outcome for Each Alternative:
The outcome for each alternatives is to measure performances using key performance indicators KPI - CPI & SPI for each of the key deliverables.
(i)  CPI
(ii) SPI



4. Selection of Acceptable Criteria:
Selection of the best criteria will be based on DoD TRIPWIRE METRICS

Cost Efficiency CPI = BCWP/ACWP      Favourable is > 1.0, Unfavourable < 1.0

Schedule Efficiency SPI = BCWP/BCWS      Favourable is > 1.0, Unfavourable < 1.0



5. Analysis and Comparison of Each Alternative:



1. Blog Posting:

Data 
Contract period = 26 weeks
Billing rate, 1hr = $200
Approved weekly work hour  = 2 hrs
Week No. 25, Blog posted 10, Reject = Nil
Earned (Unit complete method) =  (10/25)*100 = 40%

 Budget At Completion BAC = 2*$200*26 = $10,400

 BCWS    =  2*$200*10 = $4,000

 BCWP    =  40%*$10,400 = $4,160

 ACWP    =  $200*(2+2+2+2+2) = $2,000

 SV           =   BCWP- BCWS   =  $4,160 - $4,000 = $160

 CV          =   BCWP - ACWP  =  $4,160 - $2,000 = $2,160

 CPI         =   BCWP/ACWP    =  $4,160/$2,000   =  2.08

 SPI         =    BCWP / BCWS   =  $4,160/$4,000  =  1.04


2. Paper writing






Data 
Contract period = 14 weeks
Total work hour = 61 hrs
Billing rate, 1hr = $200
Approved weekly work hour  = 4.357142857 hrs
Week No. 10, 

                                                           Planned           Earned
(i) Select & submit topic                        10%                10%
(ii) Literature review                               5%                  5%
(iii) Ist Draft                                            40%                40%
(iv) Submit Ist Draft                                 2%                  2%
(v) 2nd Draft                                           16%                 16%
(vi) 3rd Draft                                           14%                  -     
(vii) Final Draft                                       10%                  -         
(viii) Run Plagiarism Check                      2%                  -         
(ix) Submit to AACE                                 1%                  -       

                                                Total         100%             73%


Earned (Incremental milestone method) =  (73/61)*100 = 120%

Budget At Completion BAC = 4.3571*200*14 = $12,200

BCWS    =  4.3571*$200*10 = $8,714

BCWP    =  120%*$12,200 = $14,600

ACWP    =  $200*(3+3+3+3+3) = $3,000

SV           =   BCWP- BCWS   =  $14,600 - $8,714 = $5,886

CV          =   BCWP - ACWP  =  $14,600 - $3,000 = $11,600

CPI         =   BCWP/ACWP    =  $14,600/$3,000   =  4.86

SPI         =    BCWP / BCWS   =  $14,600/$8,714  =  1.68



6. Selection of Preferred Alternative:

Only two methods of performance measurement using earned value was used and their results are specific to the type of effort required to be measured. Hence, both the unit complete method and the incremental                 milestone methods are valuable tools for measuring performance.



7. Performance Monitoring and Post Evaluation of Results:

My individual performance will constantly be checked and monitored using CPI & SPI as key performance index (KPI) in Earned Value Management for this project - AACE Certification Prep Course.



References:

1. Humphreys G.C. (2002) Project Management Using Earned Value (2nd Edition) pp. 545-559
    Orange CA Humphreys & Associates

2. DAU (2006) Earned Value Management 'Gold Card' Retrieved from

    http://projstream.com/images/GoldCard.pdf


3. Drucker E., Demangos D., Hamilton B.A., Coleman .R, Performing Statistical Analysis on Earned    
    Value Data  Retrieved from

    http://www.iceaaonline.org/awards/papers/2009_%20evm_schedule.pdf












Posted by at

1 comment:

  1. Dr. PDGJanuary 8, 2013 at 2:55 AM

    Hi Reginald,
    Nice try but unless I've misunderstood what you've done, you've got some MAJOR mistakes in your calculations it looks like to me.....

    BAC = 26 weeks X $200/hour X 2 hours per week = $10,400. OK, so far so good.

    You have finished and had accepted 10/26 or 38.5% physically completed yes?

    Therefore, you have EARNED 38.5% X $10,400 = $4,004 agreed?

    And according to the PLAN, you should have spent 10 weeks X 2 hours X $200 = $4,000.

    What surprises me is your ACWP. Did you take EXACTLY 1 hours per week for each of your blogs? I seriously doubt it. So your ACWP looks to me to be WAY low...... Especially until the learning curve is over, most people take 2.5 to 3.0 hours in the beginning. When calculating your ACWP you need to keep track of EXACTLY how many hours it REALLY took you to do the work. So if you are not honest (or are careless) in tracking your ACWP then it throws off all the rest of the calculations.

    To summarize, using my calculations:
    SV = 4004-4000 = +4 which is rounding error
    SPI = 4004/4000 = 1.001

    This makes sense by just looking at the excel spreadsheet. You are exactly on schedule against the early dates.

    It is your CV and CPI which I question. IF your CPI really is 2.08, then it means you grossly over estimated the cost of doing your blogs and when we rebaseline, you need to reduce your budget by close to half. But as noted above, I cannot believe you are doing a blog in only one hour. Towards the end, maybe but certainly not the same time each week, every week.

    Now, we get to the Paper. As noted in one of my weekly comments, I have no idea how this 4.3571 hours got into the picture.

    Here are my calculations:
    BAC = 61 hours X $200 = $12,200

    Physical Percent Complete = 73%

    BCWP = 73% X $12,200 = $8,906

    BCWS (at the end of W10) = 87% X $12,200 = $10,614

    SV = $8,906- $10,614 = ($1,708)
    SPI = $8,906/$10,614 = 0.84

    Again, your ACWP numbers look very suspect to me. Your time card should have contained the ACTUAL HOURS BILLED against each of the milestones. So how is it you have exactly the same charges? See what I mean?

    But let's use your numbers, understanding I think you need to go back and revise them.

    CV = $8,906 - $3,000 = $5,905
    CPI = $8,906/$3000 = 2.97

    Again, this is an incredible value which means IF your ACWP is correct then when you rebaseline, you need to reduce your budget by almost 300%??? I don't think so.....

    Also, on your Acceptable Criteria, remember that according to our contract, the target was an SPI and CPI of 0.90 to 1.10? And that the MINIMUM acceptable standard for a graduate level course was a grade of "B" or an SPI and CPI of 0.80 on the down side?

    Bottom line- GREAT that we found out now that you are struggling with this, so I will have to reject it and ask that you go back and FIX the mistakes and then repost again with the corrections as W10.1. If you get stuck send out an email or consult with Lucky as I am pretty confident he understands what we are doing.

    Suggest you go back and review the EVM workshop we did on Day 5?

    Keep up the good work- when I know what you don't understand, only then am I able to help you.....

    BR,
    Dr. PDG, Jakarta

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