Monitoring progress

Earned value analysis is a sophisticated version of the planned progress monitoring technique, utilising planned and actual progress curves. As well as measuring and comparing the work planned with the work carried out, it also utilises measures of budgeted costs and actual costs.

Figure 20: Earned Value Analysis

The base line is the 'planned cost' curve produced by loading the planned programme activities with the expected costs or budget, referred to in 'earned value' terminology as the budgeted cost of work scheduled (BCWS).

In same way as the planned progress monitoring technique, the programme is updated with progress and an 'S' curved is produced. Rather than 'activity weeks' this curve will represent the 'earned value' or the budgeted cost of works performed (BCWP).

In the example the actual expenditure can be monitored and plotted referred to as the actual cost of work performed (ACWP).

This provides a comparison of planned progress and cost against actual progress, measured as earned value and actual cost. By continuously comparing progress and budgetary data the project team can ascertain whether value is being earned. As with planned progress, earned value is a continuous review of trends. It provides a forecast of the final project outcome in respect of both time and cost based on historical project performance.

Earned value is dependent on and particularly sensitive to the accuracy of the utilised base data - the planned programme and planned budget. Together with this the project progress and cost reporting need to be realistic.

Milestones

Rather than reporting progress against all of the programme activities, specific 'milestones' can be selected and reported against. A milestone chart or schedule of key dates can be created based on elected project 'milestones' such as commencement of structural steel, completion of roofing and weathertight; start of services, power on etc. Such charts or schedules provide a useful 'high level' illustration of the project programme which can be monitored and reported against.

The milestone chart is really limited to this high level reporting and monitoring role and the progress of the works between these milestones requires a more detailed 'day-to-day' planning and monitoring approach.