Earned schedule: principles and practice - Association for Project ...

Introduction• What is Earned Schedule?– History and background• What are the benefits of using Earned Schedule?• How does Earned Schedule work?• What are the similarities and differences betweenEarned Value and Earned Schedule?• How can Earned Schedule be integrated with otherProject Management techniques?• Sanitised examples:

Playing Devil‟s Advocate• Why do I need another project management tool?• I‟ve already got a link between cost and schedule!• Does this technique REALLY provide better decisionmaking?• I‟ve heard this technique is used on developmentprojects…but does it work for ongoing operations?• Are you saying that Earned Value doesn‟t work!?

Playing Devil‟s Advocate (2)• It‟s good as a Project management technique…however…– „Classical‟ schedule indicators are not accurate for late finish projects– Schedule performance analysis is limited in some areas– Some EVM practitioners pay attention to Cost – not always theschedule– EVM has, in some areas, become focused in financial management– Indicators are not directly connected to deliverables– EV is not required to be synchronous with the schedule– EVM offers a limited decision-making guidance for project schedulecontrol

Earned Schedule – a brief history• The original phrase “Time is money” was first posed by Antiphon– Greek writer and educator– Around 430 BC– “The most costly outlay is time”• This statement was ahead of its time!• In 2006, Dr. Steve Gumley, CEO Defence Materiel Organisation(Australia) stated…“We need to maintain our attention on schedule delivery. Datatells us that since July 2003, real cost increase in projectsaccounted for less than 3 percent of the total cost growth.…Therefore, our problem is not cost, it is SCHEDULE.”

Earned Schedule – a brief history• Earned Schedule papers first published in USA– in 2003• “Schedule is different”, Measurable News• Concept was verified with actual project data• Continued development from 2003 to present

Benefits of using Earned Schedule (1)• You only need PV, EV and AT to perform calculations!• Improves decision making – part of Project, Programmeand Enterprise Management toolset• Integrates and supports risk management activities• Connects EVM to the project schedule• Project Managers have a schedule analysis tool thatimproves the confidence in forecasting delivery dates• Adds to trend analysis

Benefits of using Earned Schedule (2)• ES can be applied to any level of the WBS, to include taskgroupings such as the Critical Path– Requires creating PMB for the area of interest– EV for the area of interest is used to determine its ES• Enables comparison of forecasts, total project duration (TP)to Critical Path (CP) duration– Desired result: forecasts are equal– When TP forecast > CP forecast, CP has changed– When CP > TP, possibility of future problems

Benefits of using Earned Schedule (3)• Earned Schedule works!• How do we know?• Evidence from a number of projects• IEAC(t) & SPI(t) studies by K. Henderson, Dr.Vanhoucke & S. Vandevoorde (2003 – present)– Henderson & Vandevoorde validated ES concept with real data– Using simulation Vanhoucke & Vandevoorde showed ES to be abetter schedule predictor than other EVM-based methods• “The results ..confirm ..that the ES method outperforms, on average,the other forecasting methods” - Vanhoucke & Vandevoorde• Takes Earned Value Management into a new dimension

Why use Earned Schedule?• Schedule Variance (SV) and Schedule PerformanceIndicator (SPI) behave erratically – especially forprojects behind schedule• SPI improves and concludes at 1.00 at end of project• Why is this?• EV=BAC at completion• PV=BAC at completion• Hence SPI(£)=1 and SV(£) = 0• Classical Schedule Variance is measured in money –not time!

Dollars (,000)WeeksComparison of Schedule VariancesCommercial IT Infrastructure Expansion Project Phase 1Cost and Schedule Variancesat Project Projection: Week Starting 15th July xxCV cum SV cum Target SV & CV SV (t) cum200-20-4020-2-4-60-6-80-100-120-140-1601 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34Elapsed Weeks-8-10-12-14-16Copyright Lipke 2008

Earned Schedule Calculation• ES (cumulative) is the:Number of complete PV time increments EVequals or exceeds PV + the fraction of theincomplete PV increment• ES = C + I where:C = number of time increments for EV(BCWP BCWS)PVI = (EV – PV C ) / (PV C+1 – PV C )

EVM & ES Duration ForecastingThe ES idea is to determine thetime at which the EV accruedshould have occurred.ActualTimePVcumEV cum£SV cSV tEarnedSchedule1 2 3 4 5 6 7 8 9 10Time PeriodsTime based schedule performance efficiency: SPI(t) = ES / ATCopyright Lipke 2008

Calculating the Increment IPV CPV C+1MONEY (£)PV C+1 – PV CEV – PV C5 6I - expressed as a fraction of timeTime PeriodsCopyright Lipke 2008

Calculating Earned Schedule (1)1st value EV < PVDenominator is difference betweentwo successive PV data points

180>105Hence number ofperiods =1Calculating Earned Schedule (2)

Calculating Earned Schedule (3)

Money (£)SV (t) monthsVariances – which would you believe?Cost & Schedule Variances00.0000-50-0.5000-100-1.0000-150-200-250Note how the “Classical”SV tends to zero!-1.5000-2.0000SV(£) cumtarget SVSV(t) cum-300-2.5000-350-400Earned Schedule variancetells a different story!-3.0000-450Time-3.5000

Money (£)SV (t) monthsVariances – which would you believe?Cost & Schedule Variances018.0000-50-10016.000014.000012.0000-15010.0000-2008.0000SV(£) cumtarget SVSV(t) cum-250-300Independent Estimate AtComplete (IEAC)6.00004.0000IECD(t)Delivery Date2.0000-3500.0000-400-2.0000-450Time-4.0000

To Complete Performance Index (time)The change inManagementthe level of efficiencyReport using ESneeded to meet the milestone completiondate as contractedThis is the estimatedcompletion dateIF PERFORMANCE DOESNOT CHANGESPI and SPI(t) trend linesThis is the milestonecompletion date ascontracted

Prediction of Project Completion (1)Equivalent to an errortolerance

Milestone tracking – ES and PM‟s estimatesIndependent Estimate ofCompletion Date – EarnedScheduleIndependent Estimate ofCompletion Date – PM‟sestimate

Integration of ES, risk and deadlinesTrend analysis: is thedelivery affected by:Schedule?Risks?Both?Risk ManagementConfidence DatesContract Deadline DateEarned SchedulePredicted Delivery Date

Potential rework?Schedule Adherence12734Introduces the use ofthe “p-factor”£ES helps identifySCHEDULEADHERENCE issues56EVSV(t)8PVBACTimeES AT PDFigure 3. Earned Schedule - Bridges EVM to Schedule (Actual)Copyright Lipke 2008

Index ValueReal Data Results1.2CPI SPI(t) P- Factor P Curve Fit1.1SPI(t) is good ~0.98CPI is good ~1.051.00.9P increases to 1.0P @ 20% ~0.93 – high early0.810% 20% 30% 40% 50% 60% 70% 80% 90% 100%Percent Complete

Earned Schedule research work…

Thank you to…• Walt Lipke and Kym Henderson– for use of Earned Schedule training material• Project FALCON and Special Projects Team– For use of sanitized dataEnergy and persistence conquer all thingsBenjamin Franklin

Available Resources• PMI-Sydney http://sydney.pmichaptersaustralia.org.au/– Repository for ES Papers and Presentations• Earned Schedule Website• http://www.earnedschedule.com/– Established February 2006– Contains News, Papers, Presentations, ESTerminology, ES Calculators– Identifies Contacts & Training to assist with application• Wikipedia references Earned Schedule• http://en.wikipedia.org/wiki/Earned_Schedule