project controls expo - 31st oct 2012 - applying earned value on small and large projects by david...

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Session A5

Applying Earned Value on Small and Large projects

Project Controls Expo -‐ 31st Oct 2012 Twickenham Stadium, London

Speaker – David Birch


About the Speaker

§ David Birch -‐ 35 years experience in the delivery of high profile UK and interna@onal projects and Programmes for world leading Engineering/Construc@on contractors.

§  25 years of Project Controls and Opera@onal Management experience §  Since 2008 responsible for the London 2012 Programme Controls group

for CLM, the delivery partner to the Olympic Delivery Authority (ODA). §  Previously, delivered projects numerous industry sectors including:

ü  UK & Interna@onal Oil and Gas ü  UK Nuclear decommissioning and clean-‐up ü  Conven@onal and Nuclear Energy ü  Water ü  Telecoms ü  Industrial and Infrastructure


Small and Large Projects

£400m+

£200m+ £90m+

£25m+


1.  Organisa@on (1-‐5) 2.  Planning, Scheduling and Budge@ng (6-‐15) 3.  Actual Costs (16-‐21) 4.  Analysis and Repor@ng (22-‐27) 5.  Change Management (28-‐32)

EVM System (32 Criteria)

Ge_ng the system right leads to: Informed, effec-ve management and decision making by knowing:

•  What has been achieved of the plan •  What it has cost to achieve the planned work •  If the work achieved is cos@ng more or less than was planned •  If the project is ahead of or behind the planned schedule


1.  Define authorised work and resources via WBS/CWBS 2.  Establish organisa@onal responsibility for work achievement via

OBS 3.  Ensure management subsystems support each other, the CWBS

and the OBS 4.  Who is responsible for overhead cost control 5.  Integrate CWBS with OBS

1 -‐ OrganisaSon

Project Value Level 2 WBS Elements£400m+ 45£200m+ 30£90m+ 25£25m+ 15


6.  Schedule all Authorised Work logically 7.  Iden@fy interim goals (milestones) by which to measure work

achievement 8.  Establish/Maintain at the Control Account Level, a Performance

Measurement Baseline (PMB) 9.  Establish budgets by element of cost 10.  Establish budgets at the Work/Planning Package level 11.  Sum of all Work Package + Planning Package Budgets = Control Account

Budget 12.  Separately iden@fy and control the use of LOE 13.  Establish budgets for overhead costs 14.  Iden@fy Management Reserves and Undistributed Budget separately 15.  CBB = Budget at Complete + Management Reserves

2 – Planning, Scheduling and BudgeSng


2 – Planning, Scheduling and BudgeSng

Project Value Schedule Activities Key Milestones Duration£400m+ 25,000 60 4 years£200m+ 25,000 60 4 years£90m+ 10,000 40 3 years£25m+ 2,500 20 18 months


3 – Actual Costs

16.  Formally record all direct costs and establish budgets in a consistent and thus comparable manner

17.  Prohibit mul@ple accoun@ng as direct costs are summarised through the WBS

18.  Prohibit mul@ple accoun@ng as direct costs are summarised through the OBS

19.  Record all allocable indirect costs 20.  Iden@fy applicable unit costs 21.  Establish an acceptable material accoun@ng system

Project Value Project codes Purchase Orders£400m+ 48 152£200m+ 34 88£90m+ 70 144£25m+ 55 34


22.  Iden@fy performance measurement data elements at the C/A level on a monthly basis

23.  Iden@fy schedule and cost devia@ons on at least a monthly basis 24.  Iden@fy overhead performance measurement data as needed 25.  Sum performance measurement data elements through the CWBS and

OBS 26.  Iden@fy management response to variances 27.  Develop EACs and compare to staffing plans, and the CBB

4 – Analysis and ReporSng

Project Value Report Pages£400m+ 15£200m+ 15£90m+ 12£25m+ 6


28.  Incorporate all authorised changes in a @mely manner 29.  Reconcile original budgets with current budgets 30.  Control retroac@ve changes to records 31.  Only the Senior Manager or the Customer may revise the CBB 32.  Document PMB changes

5 – Change Management

Project Value Approved Changes£400m+ 290£200m+ 234£90m+ 119£25m+ 105


Baseline• Fixed• Controlled through Change

Management• Reflected current delivery strategies• Aligned with contract s• High Level – Project Milestones and

summarised Cost Loaded activities

Forecast• Dynamic• Reflects contractor current status &

progress • Includes mitigation strategies and

trends• Takes account of integration impacts• Forecasts outturn

Change ControlFed from Trending process

Trending ProcessFed from forecast data and enabler for Risk mitigation

Compare Inform

Change

Drive

Dynamics of Cost and Schedule Data


Small and Large Projects Summary

•  EV system can be relevant for both large and small projects •  Keep the data detail appropriate to the size •  Smaller projects will have less data but may be more

complex to manage (e.g. More part @me involvement from central func@onal groups, same skilled trades but smaller numbers of people)

•  Complexity and schedule dura@on will determine the amount of data/reports generated

•  Change happens in all projects •  Be prepared, always integrate Risk Management within your

processes and ensure the appropriate Project Con@ngency is included within the Original Budget


Flexibility Systems adjusted to suit the phase and

nature of construc4on

Simplicity Clear, concise and graphic repor4ng Data analy4cs but report on the issues

‘No Surprises’ Culture Comprehensive Baseline Spot and mi4gate risks and issues early Leading to effec4ve management of scope, cost & schedule

DifferenSators of a World Class EVM System


1.  ANSI/EIA Standard 748-‐A: Earned Value Management Systems 2.  APM Knowledge: Earned Value Management, APM Guidelines 3.  Na@onal Defence Industrial Associa@on (NDIA), Program

Management Systems Commihee (PMSC), ANSI/EIA-‐748-‐A Standard for Earned Value Management Systems Intent Guide

4.  USA Department of Defense – Earned Value Management Implementa@on Guide

EVM Reference Documents


QuesSons

Thank You

project controls expo - 31st oct 2012 - applying earned value on small and large projects by david...

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