Author: Ibrahim Abdulnabi

Ibrahim Abdulnabi carries with him 10 years of project management experience within numerous segments, including government, NGOs, construction and banking. Ibrahim's mission is to help organizations take control of their programs, present their projects in a way that inspires and impresses and pushes them to build confidence in their abilities, products and services. Previous employers have included PwC, Consolidated Consultants and Method Corp. Contact Ibrahim at

Understanding Earned Value Fields

In the first article of this series, I discussed the importance of Earned Value Management, or EVM, which evaluates the performance of your project in terms of its schedule, cost, and work. Earned value lets you effectively compare baseline and actual values. In this article, we will discuss earned value fields in Microsoft Project and the meaning of each field. Earned Value Fields in MS Project In Microsoft Project, there are eight main fields (three basic and five advanced) for earned value analysis. These fields are the major keys for project managers to understand the project status from cost, time, and work perspectives. We will discuss each these fields below. Basic Earned Value Fields ACWP (Actual Cost of Work Performed): The actual cost of work performed fields show costs incurred for work already done on a task. Up to the project status date or today’s date, when a task is first created, the ACWP field contains 0.00. As progress (percentage of completion or actual work) is reported on the task, Microsoft Office Project calculates the actual cost of work performed (ACWP). This is the cost of actual work plus any fixed costs for the task to date. The best use for this field is to compare actual to budgeted assignment costs. Usually, we use Actual Cost (AC) as a common term in progress meetings to simplify the ACWP. BCWS (Budgeted Cost of work Scheduled): These fields contain the cumulative time-phased baseline costs up to the status date or today’s date. The time-phased versions of these fields show values distributed over time. To calculate BCWS for a task, Microsoft Office Project adds the time-phased baseline costs of the task up to the status date. The best use for this field is to review how much of the budget should have been spent on a task to date, according to the task’s baseline cost. Usually, we use Planned Value (PV) as a common term in progress meetings to simplify BCWS. BCWP (Budgeted Cost of Work Performed): These fields contain the cumulative value of the tasks, resources, or assignments’ percent complete multiplied by the time-phased baseline costs. BCWP is calculated up to the status date or today’s date. As soon as a baseline is saved and progress is reported for the task (as actual work, actual duration, or percentage of work complete), Microsoft Office Project calculates BCWP. The best use for this field is to review how much of the budget should have been spent on a task up to the status date or today’s date, in view of the amount of work done so far and the time-phased baseline cost for the task. Usually, we use Earned Value (EV) as a common term in progress meetings to simplify the BCWP. These are three basic fields/concepts for earned value, and they are the input for the advanced earned value concepts that we use for earned value analysis and will cover next. Advanced Earned Value Fields SV (Schedule Variance):This field shows the difference in cost terms between the current progress and the baseline plan of a task, all assigned tasks of a resource, or for an assignment up to the status date or today’s date. SV is the difference between the budgeted cost of work performed (BCWP) and the budgeted cost of work scheduled (BCWS). Microsoft Office Project calculates the SV as follows: SV = BCWP – BCWS The best use for this field is to determine whether the task is behind or ahead of its baseline schedule in cost terms. CV (Cost Variance): This field shows the difference between how much it should have cost and how much it has actually cost to achieve the current level of completion up to the status date or today’s date. CV is the difference between the task’s BCWP (budgeted cost of work performed) and ACWP (actual cost of work performed). Microsoft Office Project calculates the CV for a task as follows: CV = BCWP – ACWP The best use for this field is to determine whether the task is under, over, or exactly within your budget for a task. BAC (Budget at Completion): This field shows the total planned cost for a task, a resource for all assigned tasks, or for work to be performed by a resource on a task. Budget at completion (BAC) is also referred to as Baseline Cost. There are many ways to calculate BAC, such as expert judgment, parametric estimating, or analogous estimating, but in general MS Project calculates the BAC using the following formula: BAC= (Work * Standard Rate) + (Overtime Work * Overtime Rate) + Resource Per Use Cost + Task Fixed Cost CPI (Cost Performance Index): This field shows the ratio of budgeted (or baseline) costs of work performed to actual costs of work performed up to the project status date or today’s date. CPI is the ratio of BCWP (budgeted cost of work performed) to ACWP (actual cost of work performed): CPI = BCWP / ACWP The best use for CPI is to see the ratio of budgeted to actual costs. This value indicates whether you are over or under budget as of the status date. CPI >1 = under budget, CPI<1 = Over Budget SPI (Schedule Performance Index): This field shows the ratio of the budgeted cost of work performed to the budgeted cost of work scheduled (BCWP/BCWS). SPI is often used to estimate the project completion date. The time-phased version of this field shows values distributed over time. SPI = BCWP / BCWS SPI >1 = ahead of schedule SPI<1 = behind schedule These are the eight major keys for earned value, I know it’s a lot of information, but, as we said before, to track your project progress and forecast the future, you need to use the earned value analysis. In my next article, I’ll present a case study which will illustrate the implementation of these concepts in a real-life scenario. Comments or questions are welcome below.

Time is Money: The Importance of Earned Value Management

In my previous article, I discussed the importance of a baseline, and how, without one, a PM doesn’t have a yardstick, per se, to measure with. Project Management presents many tools and techniques for the management of a successful project. Today, I’d like to continue this conversation on how to achieve success in a project by going back to another basic concept: Earned Value Management (EVM). EVM as a tool that provides visibility into whether or not you’re on track to finish your project within the established cost and timeline baselines defined in the project plan. In other words, EVM helps you quantify the performance of a project. It compares costs and schedules to a baseline to determine if the project is on track.   Definitions Some basic terminologies are frequently used when considering EVM, and every PM needs to be aware of them. Let’s define such using PMI as our guide: Earned value (EV) is the measure of work performed, expressed in terms of the budget authorized for that work. EV can be reported cumulative to date or for a specific reporting period. Planned Value (PV) is the authorized budget assigned to scheduled work, the total budgeted cost of the planned work. At any point in time PV defines the work that should have been accomplished. PV can be reported for cumulative to date or for a specific reporting period. Actual Cost (AC) is the cost incurred while performing the activity or cost of work performed on an activity during a specific time period. This can be reported cumulative to date or for a specific reporting period (on a cash flow basis or an S-Curve). EVM Importance Earned Value Analysis is a project management technique for evaluating how a project performs against its budget and schedule, but to reap the benefits of it, project managers must spend a considerable amount of time determining a reasonable budget and setting realistic time frames. Spending time defining the scope statement, breaking down the scope into manageable components (WBS), creating a logically driven project schedule with a critical path, and preparing a performance measurement baseline (budget scope) will lead you, as a PM using EVM, to answer three key questions: where have we been, where are we now, and where are we going? EVM in Microsoft Project Microsoft Project as a tool can help project managers to perform Earned Value Analysis and Earned Value Management for their projects. MS Project 2019 Professional, as well as its earlier versions like MS Project 2016 and MS Project 2013, fully support EVM. Microsoft Project has built-in fields for all EVM measurements and can be calculated at any point of time in the project life cycle. We need to remember to check that we have a solid project schedule, baseline, resources rates, and updated accurate actual data to get the maximum from Microsoft Project’s EVM feature. I look forward to starting a series of articles on how to use EVM in Microsoft Project, including best practices. I intend to cover the following in upcoming publications on MPUG: Understanding Earned Value fields EVM Project Case Study EVM Reports To understand truly that ‘time is money,’ you need to use EVM in your projects. Comments or questions I might cover in my upcoming articles are welcome below.

Why Project Managers Should Care About a Project Baseline!

During the many years I have spent in the project management field, I have come across many project managers (PMs) wondering why they need a project baseline. Many know at the start of a project the dates of submittals, project budget, project scope, and who will work on the tasks. All of this information is in one’s head and updates are communicated, as needed. PMs have good intentions and work hard to reach project success, but the question lingers: how does one measure project success without having a project baseline? Let’s say a project will finish in five weeks. Is this good or bad? If your schedule baseline has a four-week completion, without it you can’t tell if there’s a problem, and subsequently figure out how to solve it. Definitions Let’s start with some definitions. A project’s baseline is a snapshot of the original plan. Its used to measure and compare your project’s progress against, as well as aiding in assessing project performance over time. A project baseline has three main components: Scope: breaks down all needed tasks to achieve project objectives and deliverables Schedule: contains start/finish dates, milestones, task dependencies, and resources Total cost: the total scheduled or projected cost for a task, resource, or assignment These components are the road to successful project outcomes. Having a project baseline allows you to monitor current project performance and improve the accuracy of future estimates. Setting project baseline is usually a straightforward process. Using Microsoft Project, we can create a project baseline and provide the project big picture for team members and stakeholders ensuring that everyone is aligned with project objectives. Capturing a project’s baseline usually follows these steps: Get clear on the deliverables and develop them into a work breakdown structure. A process that I recommend using is a deliverable-based Breakdown Structure that demonstrates the relationship between deliverables and the scope. Facilitate all work that needs to be done to create the deliverables. Estimate the resources and duration for each task. Estimate the cost for each task based on the resources and duration. As you can see, you now have a schedule that has the three components mentioned earlier (Scope, Time, and Cost), and you can easily set the baseline that will help you achieve a better project performance assessment by providing insight into where a project has under- or over-performed. Project baseline benefits are clearly seen during the project when a PM assesses the actual status versus the baseline that contains the approved estimation. Microsoft Project has many reports that may help PMs to track the project progress from time, cost, and resource perspectives. Even after the project completion, you can see the actual outcome against your projections. I believe baselining is a must for any PM or upper management professional who would like to know how a project is achieving its objectives and deliverables. Simply put, without a baseline you have no yardstick to measure against. Your comments are welcome below.

Unlocking the Power of Microsoft Project Online: How to Use the Strategy and Portfolio Analysis Feature

During Microsoft Project Online implementations, our clients and users often ask two questions: Using Strategy in Microsoft Project Online In this article, I address both. The main goal of portfolio analysis is to identify, select and deliver project portfolios that best correspond with the business strategy and helps in maximizing return on investment (ROI). The outcome of a portfolio analysis is influenced by business drivers, budgets and resources. Portfolio analysis process can be achieved with four simple straightforward steps. First, define your business drivers. In using portfolio analysis, best practice is to have a clear idea about the goals of an organization. Business drivers help in ranking the importance of your projects. Therefore, the drivers should be SMART: My advice Try to have at least three or four business drivers. In Project Web App, click Business Drivers in the left navigation, then click on New to enter the details for your business drivers. Complete the form as follows: Project impact statements refer to how each project affects a business driver. In this example, we have three drivers. Next, perform a pairwise comparison between each set of drivers to prioritize them in a way that will help the software “understand” the importance of your projects as they relate to your business goals. To do this, click on Driver prioritization on the left panel, and define the properties, then move next to Prioritize drivers. My advice: Consider conducting a workshop after defining your business drivers to develop a balanced scorecard that formalizes the importance of each business driver compared to the others. The result will look like this: My advice: If you have low consistency ratios and everything comes through as equally important, revisit the prioritization process again and make sure that the logic is there. In this next step, you can find the strategic impact on the project details page where you can rate each project against the business drivers. From the strategic impact, complete the form: My advice: If you don’t see the strategic impact in your project details page, go to PWA settings | EPTs and select the needed EPTs then add the Strategic Impact. Now it’s time to select the best projects based on the defined drivers and budget and resource “worthiness.” Click on Portfolio analysis on the left panel, select the projects to analyze, define the properties and move next to Prioritize projects. Then review the prioritization. This page indicates which project should be selected first. Taking the Analysis Further If you want further analysis, you can also examine cost. This is useful in planning the projects based on the size of your budget and the strategic value of each project. To learn more about this feature, read this TechNet article: After walking through the process of portfolio analysis in Microsoft Project Online, you need to decide if you can depend on the outcomes of the process. In general, the software is designed to help in automating portfolio analysis process. With every piece of information fed into the software about the project, the more accurate the results will be. Of course, the project selection will be made by the decision-makers. All you can do is try to persuade them with the data. How have you used the portfolio analysis features built into Microsoft Project? Share with the MPUG community in comments below. Image Source