MAY 2019 EARNED VALUE MANAGEMENT IN PRIMAVERA P6

good morning or good afternoon wherever you may be joining us from today thank you for taking time out of your schedule to join us for today's technical webinar series we're going to get started in just a couple minutes on the presentation but I want to go over a couple of housekeeping items first and foremost all : phones are automatically muted in order to preserve the quality of the audio for all of our attendees as we are recording this webinar for distribution if at any time you have any questions there is a questions box in your GoToWebinar that you can submit those questions and time permitting we're going to try to answer as many as possible if we cannot get to all the questions we will be putting together a follow-up email and then this follow-up we're going to have all questions that come in both online and offline we're going to also include a copy of today's presentation and we're going to include a link to record the webinar that you may want to share with colleagues or clients we're going to get ready to get started for the presentation I'm going to bring our Cosentino in he is one of our senior Primavera consultants and he's going to be talking about our value management in Primavera p6 today Eric the floor is all yours thank you dan beck good morning everybody my name is Eric Costantino I'm a senior consultant here with air McNally for the past twelve years currently I'm actually a staff consultant on-site with a utility company and I've been a Primavera instructor for p6 as well as contract management and my goal is to really just spread this information to as many people as I can because obviously our environments work at anywhere that you're working in these environments it helps when you have a lot of these things in place clean databases and things like that so it really kind of brings a good joy to me actually spreading this information so today's webinar again it is going to be on earned value management in p6 but before we do go into the webinar I did just want to go to a safe harbor statement that everything that I'm going to be going over today is really based on my opinion and the software and how it works and how I'm using it for my instance and again I've set up demonstrations that are merely just for your knowledge and I'm hoping that you don't construe it as any other way as to just my opinion so I just make your own judgments as to the application and the information that I do provide I've been doing it for a long time and other people have been doing it longer I don't know everything about the software but I am intrigued to the point that I do want to learn every nook and cranny of it because it's considered one of my video games so just it can convey that message some of the products and services that we do here at garment daddy I'll go over so we do a lot of consulting services we do hosting services so if you have an instance of pieces that you need brought into the cloud we are a p6 hosting company as well we do integration and analytics and custom dashboards so we do have custom programmers here on staff we do provide product services and support and we are ASB dvbe project staffing resource so a disabled veterans company and proud of it a lot of the tools that we provide here are in this matrix so obviously it's a lot to pull into one little screenshot but this will be included in the slides if you wanted to see the different types of applications that we do sell and support and host ok so let's get right into it I know it's middle of the workday so earned value management this is a technique to measure performance and progress for the project one of my mentors had asked me a really good question what's the difference between you know total slope performance versus earned value management performance and there's a great question I'll give into that later once I kind of explain it but this will provide us an even more in-depth type of measurement for performance and progress so the basic premise of our in value is that the cost is relative to the work and the assessment can be done at any given time to see if the work or costs are not relative it's as simple as that you just have to set up your layouts appropriately that way you can pull it up at any given time what I do recommend is that you align your analysis with some type of frequency time base which might be your schedule day to date updates or whether weekly or reporting periods I wouldn't just start doing earn value every single day off of everything because there's decision points based off of that so earn value it does require three basic elements we need the plan value the earn value and the actual costs so p6 actually simplifies this whole technique by allowing all of the data that we put into the schedule in our cost loaded resource loaded schedules to essentially be earned value ready the result is we can now assess all of our health via scheduled performance index and cost performance indexing now I'll get into what those are in a little later in this webinar so the gist is if we set up our our schedule and our information correctly in the beginning of the project and we set all of our settings to be earned value ready it's as simple as opening up a layout and looking at the health of our schedule I brought this slide in to show the life cycles in P 6 because again this is my opinion on how you should be managing your project statuses in P 6 and how it's relative to your schedule the way that I recommend everybody set it up is that your planned project status would go for more projects that are being created information gathering and getting everything built up unto the point that you get it approved by a project manager or your boss or team lead or whoever and you baseline the schedule the reason that I say that is people don't realize that the p6 project status that that's built into the program actually has implications based on features of the program whether it be on the p6 website or in the projects inside of the client so I do recommend that you have strict processes set up for how you manage your statuses especially when it comes to filtering for specific projects or portfolios and the web that you might want to look at your earned value projects on so that's why it's important to have this major main fundamental set up active projects should be for scheduled maintenance period and the phase so that's when you're actually obtaining those detailed updates and applying progress and reporting that progress to the team and then your inactive should be reserved for any projects that are being closed out and completed so earn value basics we have three values that I've mentioned in the beginning with our plan values so the cost and schedule information comes from your baseline the actual cost that comes from your actual cost and the earned value which is what has physically been built I'm going to tap on how you achieve your actual cost in a little bit because p6 has settings all over the place that either allow us to update it manually or allow the program to update it based on the duration percent complete so we want to think about that as well when we're doing our in value to start off with the basics I am going to use a simplified example of earn value and obviously we have much more complex projects than this but I've got to start with the basics so I'm going to start with this where we have a plan to just ten concrete forms over ten days pretty simple hundred bucks of form over ten days okay so that's my original baseline plan value I'm going to say at the end of day five that we should have five forms completed at a rate of five hundred dollars of my actual cost so my plan value should be five hundred dollars at the end of day five but I'm going to say that at the end of day five I've only completed two and a half forms so I've had some delays whatever it might be my earned value is going to be 250 okay I'm also going to say that we have a cost overrun so on day five I've only completed two and a half forms but I'm going to say that it cost $200 per form to build so two and a half forms gives me $500 this is pretty simple you'll notice that I've marked this area as the estimate to complete keep that in mind towards the end of this webinar when I begin reviewing how we can calculate the estimate to completion is it going to be $700 probably not but primavera gives us that option to calculate based on our performance so just based on those few simple slides we now have our variables for earned value on day five my planned value is five hundred five forms five hundred dollars my earned value is two hundred and fifty dollars each form cost two hundred dollars and I only completed two and a half of them and my actual cost was five hundred dollars I spent five hundred dollars to achieve two and a half forms to be completed over five days so everything now is ready to be measured so my schedule variance is my plan value from my earned value which gives me minus 250 I'm behind schedule my cost variance is my actual cost subtracted from my earned value which also gives me 250 sum over budget now the requirements for p6 to do earned value you have to do a couple things in advance and this is where I hope that you've set up standards for your database in your environment so that way you have these requirements already in place because these are actually what we consider as good scheduling habits now you'll notice that some of these requirements require a lot more detailed updating so if I split my percent complete in my duration and I use physical percent complete well that now that means I need to get an update for both I need to get an update for the number of days remaining on my activity or I can use an expected finish and I need to know what the percent complete of the activity is so we're going to want to set it to physical because that's how we actually perform earn value we split the duration percent complete from our activity percent complete bottom line as simple as that earned value can only be calculated when the duration of the activity is separated for them from the percent of the work completed you're going to want to build the activities at the appropriate level of detail if I just have 50 day activities in the entire schedule and there's zero detail and it's one big schedule that just says work we're not going to be able to do one value online it's best to really align it with your cost estimate but not go to the level of detail the price of a nut and a bolt so you have to find that happy medium as to the appropriate level of detail and that may be based on project basis it must be cost and resource loaded as well so that way you have some type of costs to analyze you do want to ensure a tight logic path to your schedule because your schedule percent complete is based on the entire schedule being logically correct and it's also good scheduling methods you only want to open ends in your schedule standardize your data date progress updates that's just a given everybody should be doing that on a standardized basis you must create and assign a baseline to schedule for your plan value obviously without a baseline there's nothing to go against a target file on so we can't do anything it's going to use your current project as your planned value and that just doesn't make sense so you need to have a baseline and you need to assign it to the project now whether you assign baselines throughout your project to calculate based on approved baselines every environment is different so again it's you need to identify when you plan to baseline and analyze that variance off of that baseline target our layout so this right here is actually an extremely important screen where I'm showing you all of the columns that you're going to want to set up for your layouts to automate earn value so the first layout to do earn value analysis is just going to have all of our ID our name duration but we're going to bring in our plan value actual cost earned value cost be a fee schedule Atkin percent complete performance percent complete and then our start and finish columns for our our activity the second one is going to be our estimate to complete layout where you're going to want to bring in these following columns again I'll be posting this on our web site and after this webinar so that way you can go back and build the layouts based on this screen here you'll also see an example when I actually pull up those screens in this webinar so again the first step baseline the project I'm going to go ahead and maintain baselines create the baseline and then assign it to the project one thing to note is when you look your plan value cost column in your activities window that's only going to populate after you've applied progress it's not going to show you what your plan value is until you have progress applied and here's what I mean so here's the layout that I had mentioned for earned value analysis in the columns that are representing what I'm trying to look at so based on that example you'll notice that I've got the two and a half forms completed on day five okay in my Gantt chart I've also brought in my baseline bars just to show an example in representation of what the original plan was so you can see then the variance between the original plan and our current plan so it's at the end of day five you'll notice that I've got all of my values rolling up to the summary level which is fantastic I've got my planned value cost that populated after day five and I moved my dad a day to plant it gave me how much I planned to be at day five notice the rest is zeroed out because I have not applied progress yet my actual cost shows that I spent five hundred dollars because I went into the resource tab and I applied my project or my units complete to say this is actually going to take me two days in 16 hours instead of the one day and eight hours so I've gone in and I've applied my progress to my resource and it's given me my $500 actual cost my earned value cost is rolled up based on what we've earned from this project so obviously I've got my values here for earned value my planned my actual cost and my earned value automatically calculating my budget at completion shows a thousand dollars that's what I've budgeted my schedule percent complete shows that I'm at fifty percent complete that's a five out of ten days but my performance percent complete is only 25 percent not good so we're looking at this and we can see that our planned value of five hundred to finish five forms on day five is five hundred only two-and-a-half forms completed an actual cost of $200 per form is five hundred actual cost and this should be 250 my apologies for not catching that I'm sorry that should be 250 in that screw me up I apologize so only earned 250 of the work based on the original plan I've earned two hundred and fifty dollars so right here this gives us our variables to calculate our estimate to complete whether we want to just use the remaining budgeted at completion costs or if we're going to use the performance of our project to dictate the estimate to complete so the conclusions are my schedule performance the baseline indicated that 50% of the work should be completed with only 25 percent complete actual labor units this shows that the project is behind schedule same thing with the cost performance the baseline indicated that I should have had five hundred dollars worth of work completed and as of my data date I've only achieved two hundred and fifty dollars worth of work and that's my earned value cost I'm over budget so now we need to start getting this into an index level so I can gauge on a varmints level on the plus one minus one level or basis so we have schedule index which we call spi schedule performance index and it's a ratio of what was earned versus what was planned at the scheduled level an index less than one is behind and an index greater than one is ahead so look at our one being our power okay less than one you're shooting bogeys greater than one you're shooting birdies so this calculation the SPI is based on my earned value divided my by my planned value so 250 divided by 500 gives us half point five my cost index my CPI cost Performance Index is a ratio of what we've earned versus the actual cost in index of one over budget index greater than one under budget so this is my earned value divided by my actual cost equals my performance index so 250 divided by 500 is half 0.5 pretty simple so now using that second layout that I've showed will see that my cost performance index is showing me that point five value so my earned value divided by my actual cost gives me my schedule my cost index I'm sorry of 0.5 take note of these other columns here next my schedule performance index I've got earned value of 250 but my plan value is 500 well that's simple because that's half also so my schedule performance index is 0.5 so now we're going to use my FB I and my CPI 0.5 and 0.5 to calculate the estimate to completion this is done in our wvf tab so when you open your project navigate to the WBS window and look at the tabs in the bottom it's the Earned value tab is not there you can simply right-click in this gray area and customize the the columns or the tabs here and this will be available so you pull open the Earned value tab and you'll notice that you have two different windows one is the technique for computing our performance percent complete remember that was 25 percent should have been 50 I'm simply using the activity percent complete but you can also use WPF milestones you can use the zero to a hundred method 50/50 method started or finished or you can do a custom percent complete but for here I just simply use the activity percent complete to give me my performance the technique for computing the estimate to complete value this is where this is where I believe is most important so we can either use the remaining cost for the activity which would have given me $700 and that's not really accurate if we've already gotten off to a bad start and it costs 250 to build those forms and we had planned that spend 500 at the end of day of 5 and each form was only going to be $100 we're already bad off the gate so probably not good to use this one but what we do want to use is this type of formula where we can allow the SPI in the CPI or the CPI to give us our estimate to completion costs so those 4 methods that I showed in the window we have our performance factor equaling one which is just simply an optimistic result so it's using my performance factor times my budget at completion - my earned value cost and that's going to be my 700 - my earned value cost of 250 and that's a pretty optimistic result saying we're going to get everything back on track and ignore what happened up until this point going forward we're going to do exactly as my cost estimate had planned we fixed the problem the performance factor equals 1 divided by my CPI this is more of a likely result because it's going to be using my CPI which was 0.5 times my budget at completion 700 minus my earned value cost this is a more likely result but I want to say the actual most likely realistic result is this one here the performance factor of 1 I'm sorry / CPI times my FB I so it's using both as the most pessimistic result but that's the most realistic result in my in my book so it's using both factors of 0.5 times my budget at completion subtracting my earned value cost to give me my total estimate to completion or I can I can customize my own performance factor but that's if you've got it down if you really have it set to a set level that maybe you always want to increase productivity as you go through you can adjust your own performance factor so showing you the result of the performance factor you'll notice that I've got my 10 forms here and I'm going to go with just using my right out of the gate estimate at completion that first one here which was using my performance factor of 1 times my I'm sorry 1 times my budget at completion minus my earned value and that's gonna give me my 1250 remaining cost so I'm using a performance factor of one ignoring the fact that I've only really had a performance of 0.5 this entire project halfway through so it's going to say well your estimate to complete then based on what you've done is 1,250 bucks another thousand dollars now if I use the other one where it's a not an optimistic it's using my CPI and my SPI and it's giving me the most testament pessimistic result just by switching that little radio button sorry it's a tongue twister here you'll notice that my estimate to completion is at $2,000 because it's assuming now that since we've started out the gate at 200 bucks perform it's going to continue down that downward spiral and we're never going to make it up and it's always going to be 200 bucks for every project out the gate so you'll notice that that estimate to completion is based on your performance factor that you select in that WBS window okay so a couple of the key concepts are you can perform earned value analysis to compare the budgeted cost of the work to the actual cost you can calculate the pv the evey in the AC to determine how much work will be completed or should have been completed how much work was completed and how much the completed work cost to build and then you can use the estimate to completion to calculate what the remaining cost of the activity in progress will be so those are a couple of the key concepts and what I do want to do is just simply I'm going to actually back out now and I didn't anticipate going live but I do want to just show that the audience one thing you'll notice that we have this checkbox at the project window under my calculations to calculate the actual units in cost when the duration percent complete changes that means that the duration percent complete in the activity percent complete are linked because remember our performance percent complete was using the activity percent complete at the WVS tab so I'm going to need to uncheck this and track my actual cost in units very intimately just as intimate as you plan on tracking the scheduled activities and their dates that means that if you want to do earn value you're going to really want to keep it unchecked and get the same level of detailed updates for your scheduled dates as your resource units and costs because that's how you're able to really measure accurately your project's performance that's number one the next thing that I wanted to do was just simply show you a pretty neat example of our dashboard windows that we have available in p6 web I would I would definitely get more familiar with how p6 web really operates because this is really going to be the future user interface view of p6 ten years from now we might not even recognize the client for what it is but that's a what-if obviously there's always a question in the future but as things are evolving the user interface views are becoming more of a web-based looking interview view so what I did want to show you guys though is these dashboards that we have available that show us our earned value performance automatically so whatever projects I might have in a specific portfolio you'll see that I have the automatic calculations coming right into my dashboards so if I'm a project manager or I'm a director and I just might want take a look at a portfolio of projects to see if they're ahead or behind I'll be able to easily just get a quick overview thousand foot view of my projects and their performance take note that my earned value webinar demo project have the CPI and the SPI that we had mentioned I can set thresholds for these indicators if it's good or bad so pretty much that wraps up the webinar and I do want to thank everybody for their attendance now I'm going to open it back up to Dan to take a to go through some of the questions and comments that may have been asked during the presentation all right there yeah that was a very good presentation we did have a few questions that were submitted so the first question the requirements that you mentioned for e IBM can those be by project or is that a setting for all projects in your database great question that is on a per project basis what I would recommend is that if you have templates that you generate your projects from that those templates have those standard settings applied to that so that way when you copy that template as a project to make it a new project and then go and edit it and add resources or cost or however it will retain those same settings but it is a per project basis correct into actually some of them are actually at the activity level so for your percent complete you can change obviously from the duration percent complete on the activity to physical percent complete on the activity all right the next question would setting up evm require additional rights in p6 and they explained my user profile is project manager and that it has some restrictions on what I can do with the projects that I am assigned to so absolutely and that's a great question because the security breakdown structure and p6 the OBS absolutely does restrict people I mean there's so many different options that you can allow to customize a person's user profile to and one of them might even be resource assignments if they even have the right to create their own or not one really neat thing that we can do in p6 is assign a specific resource hierarchy to an individual so you can alter the securities to actually allow people to do earn value on their projects but that would have to go through their administration but great question the answer is yes you there might be some things that your database administrators might not want you to be doing that those security profiles may be restrictive of what you can do and can't do yeah just add a little note on that Eric too it also depends on the program that we're using within p6 whether it be pro or EPP M bppm actually has more restrictions that you can assign to each user than Pro and I've encountered them in the last couple of versions but last time I did I think p6 Pro only had 125 user restrictions and rights and EB p.m. was over 2/3 so that could make a difference as well - yeah and that's a great point because p6 web actually has user interface views okay and user interface views are actually even more restrictive it allows us more capability to restrict a user in what they see in piece web so user interface view is it even further level of control over what a user can and can't do over the client but even in the client there are things that the admin can restrict to not allow you to do those things even down to the point of adding resources to a project alright and the last question that was submitted is when you change the settings in the calculations tab in the EPS does that change the settings just for a specific project or for all projects in your EPS okay that is so as soon as you click on an EPS band all those details go away because those details are project details that are only specific to the project and which are highlighted on so it will be on a per project basis and it will take effect as soon as you do make that change to that project so once you make the change and then you open it it will automatically have taken effect now what you might have to do is something where you know if you do a change to any resources or add resources and cost to an existing schedule you would have to update resources and costs for that specific project that's that's on a separate topic all right that's all the questions that we had Eric thanks a lot for the presentation a I hope it was very informative to our audience we're going to work on getting the follow up information together to send it out to all attendees and registrants as we did have quite a few people register that couldn't make it and we'll get that out to you the next couple of days just does note as Eric shows on the screen there is an upcoming event it's about three plus weeks from now the AACE international meeting down in New Orleans if you're going to be attending it we'll be having a booth there so stop on by and say hello but again we thank you for taking time out of your day to do it on the webinar and we look forward to seeing you on our future webinars thanks a lot with Prestidge there hey thank you everybody and I appreciate your time

Channel: DRMcNattyAssociates

Views: 3,313

Rating: 4.9166665 out of 5

Keywords: Earned Value Management, Primavera P6, Oracle, Earned Value Technique, Schedule Performance Index, Cost Performance Index

Id: rYbS3fxwVkA

Length: 37min 11sec (2231 seconds)

Published: Fri May 24 2019