Viewing Earned Value Cost Indicators

The flip side of the question, “Is there enough time left to complete the project?” relates to cost: “Is there enough money available to complete the project?” Focusing on earned value cost indicators can help you answer this question. To calculate cost indicators, Project uses the actual cost of work performed, or ACWP, as derived from the actual work values recorded in a project plan.

In this exercise, you display earned value cost indicators for the project plan.

1. On the View menu, point to Table: Earned Value Schedule Indicators, and click More Tables.

The More Tables dialog box appears.

2. On the Tables list, select Earned Value Cost Indicators, and click Apply.

Project displays the Earned Value Cost Indicators table in the Task Sheet view.

Tip 

If any column displays pound signs (###) or the values are not fully visible, double-click the column heading’s right edge to widen it.

Here you can see the earned value cost indicators for the project plan, summary tasks, and subtasks. Because planned value and earned value are key values for both schedule and cost indicators, they appear in both tables and were described in the previous section. Note that the ACWP field (Actual Cost of Work Performed) does not appear on either the schedule indicators or cost indicators tables; it does appear on the Earned Value table, however. Note the project summary task (task 0) values in the following columns:

• CV The cost variance, or the difference between earned value and ACWP. The short film project has relatively low cost variance.

• CV% The ratio of cost variance to planned value, expressed as a percentage. This value tells you how close you are (under or over) to the budget plan per task. The short film project is below baseline cost performance.

• CPI The cost performance index. The short film project’s CPI (as of the status date) is 0.89. One way you can interpret this is that for every dollar’s worth of work you have paid for, 89 cents worth of work was actually accomplished.

• BAC The budget at completion. This is simply the total baseline cost of a task, summary task, or project. You evaluate this figure against the EAC to derive the VAC.

• EAC The estimate at completion. This value represents the forecasted cost to complete a task, summary task, or project based on performance so far (up to the status date).

• VAC The variance at completion, or the difference between the BAC and the EAC. The VAC represents the forecasted cost variance to complete a task, summary task, or project based on performance so far (up to the status date). The short film project has some variance at completion value.

• TCPI The to complete performance index. This index value demonstrates the ratio of remaining work to remaining budget as of the status date. The short film project’s TCPI value is 1.07, meaning remaining work and remaining budget are almost equal. Depending on your screen resolution, you might need to scroll right to see this column.

Important 

Although it might seem odd and even confusing to consider being ahead of or behind schedule in terms of dollars, remember that dollars buy work and work drives the completion of tasks.

From a pure cost variance analysis standpoint, the short film project appears to be in relatively good shape. Yet the schedule variance analysis suggests otherwise. The heart of the issue is that, as of the status date, quite a bit of work has started later than planned but has not cost more than planned. The true health of the project is often not obvious and requires a comparison of both cost and schedule variance based on past performance, as well as forecasts of future performance.

Now let’s all take a deep breath. Earned value analysis is one of the more complicated procedures you can do in Project, but the information it provides on project status is invaluable. Earned value analysis is also a great example of the benefits of entering task and resource cost information in a project plan.

Tip 

To quickly see the selected task’s earned value numbers in any task view, click the Task Earned Value button on the Custom Forms toolbar. To display this toolbar, on the View menu, point to Toolbars, and then click Custom Forms.

Changing How Project Calculates Earned Value Numbers

All of the earned value calculations shown in the previous exercises use the default calculation options in Project. However, you can change settings to give yourself more flexibility in how earned value is calculated. Some important settings you can change include the following:

• Rather than using the percent complete of tasks that is based on actuals recorded in a project plan, you can tell Project to use a percent complete value that you enter-regardless of a task’s calculated percent complete. The manual or override value is called physical percent complete.

• Rather than using the initial baseline values stored in the default Baseline fields for earned value comparisons, you can tell Project to use any baseline set you want-Baseline or Baseline 1 through Baseline 10.

You can set these options for an entire project plan or change only the calculation method for a specific task:

• To change these options for an entire project plan, on the Tools menu, click Options, and then in the Options dialog box, click the Calculation tab. Next, click the Earned Value button. In the Earned Value dialog box, choose the calculation method and baseline options you want.

• To change the earned value calculation method for a selected task, on the Project menu, click Task Information, and then in the Task Information dialog box, click the Advanced tab. In the Earned Value Method box, click the method you want.

If you choose to use the physical percent complete method for either an entire project plan or a specific task, you must enter a percent complete value manually. This field is displayed in the Tracking table, and you can insert it into any other task table.