Struggling to keep your project on budget and on schedule? The To-Complete Performance Index (TCPI) in Earned Value Analysis is your key to staying on track. This powerful metric reveals the cost efficiency—building on the Cost Performance Index (CPI)—your team must achieve to complete the project within its financial targets. Simple to calculate and easy to … [Read more...]
In earned value analysis, the Estimate at Completion (EAC) is your forecast of the final project price tag, built on how the project has performed so far. More than just a number, it gives project managers a critical glimpse into what the total cost will likely be when the dust settles. The Bigger Picture The EAC is one of four calculations in the Earned Value … [Read more...]
In earned value analysis, the Estimate to Complete (ETC) is your crystal ball for what’s left to spend. It’s not the total project cost—that’s the Estimate at Completion (EAC)—but rather the expected cost from this moment to the finish line, excluding what’s already been spent. For project managers, the ETC is a vital tool, offering a clear view of remaining funding … [Read more...]
Want to unlock the secret to delivering projects on time and within budget? Earned Value Management (EVM) might just be your key. This powerful project control technique gives project managers a clear, data-driven snapshot of where a project stands—tracking both budget and schedule performance in real time. But more than that, it forecasts how those variables will … [Read more...]
When a patient is first wheeled into the emergency room, the first priority of any doctor is their vital signs, that is, pulse, breathing, body temperature, and blood pressure. Regardless of the injury, if the vital signs are not stable the patient is dying and all efforts must be directed toward stabilizing them prior to treating the original injury. Project management … [Read more...]
Everybody has heard of a project whose cost spiralled out of control. Even big megaprojects where the difference measures in the billions are not immune to cost pressures. In fact, they are even more likely to go over budget. What is the official project management methodology for controlling project costs? To answer this question, we consult the … [Read more...]
The earned value method is the project management standard for cost control during a project. Whether you are a practicing project manager or studying for the PMP exam, you need to know how to calculate earned value. Fortunately, it involves nothing more than basic high school math. The more difficult part is knowing what each of the variables means and how … [Read more...]
Earned Value is a method used by project managers to calculate the current project status and predict future project performance. In this post we will outline each earned value formula. Planned Value (PV) Earned Value (EV) Actual Cost (AC) Schedule Variance (SV) Schedule Performance Index (SPI) Cost Variance (CV) Cost Performance Index (CPI) … [Read more...]
Poor project cost management is one of the easiest ways to make a project go awry. Hence, good project management requires a firm grasp on the concepts and techniques in project budgeting and cost control. Thankfully, the Project Management Body of Knowledge (PMBOK) gives us a strong foundation in this area. Project Cost Management is the fourth of 10 project … [Read more...]
The real benefit of the earned value method is in the early warning signal it provides. In my previous life at a large engineering company, I saw many project managers get to a monthly billing cycle before they realized the project was behind, and even then they would rationalize it by deciding their project team was going to be more efficient in the next cycle. … [Read more...]
