Project metrics Archives

Summer reposts: Project metrics: earned value management with a 6-function calculator

Background on the posts

I wrote these two posts because I got tired of reading how complicated it was to compute project metrics. Project metrics are NOT complicated, it’s simple math! So I thought if I wrote my understanding of those metrics, it might help some people.

It turns out these two posts are the most popular ones on the blog!

I hope you enjoy them 🙂

Project metrics: earned value management with a 6-function calculator

Project metrics have a bad reputation. Things like Earned Value and Schedule Performance Index are presented as complex calculations that only experts can master.

Nothing could be further from the truth

Actually, most project metric calculations can be done by anyone with grade-school math skills. The challenge in project metrics calculations is not in the formulas themselves, but in mixing project management concepts with mathematical operators.

Still, these concepts are basic to project management. Every good project manager should understand them.

Start with the basics: Earned Value, Planned Value, Actual Cost

These three are not really formulas. They are the three figures project metrics use to create all the other ones, like the Cost Performance Index […]

Project metrics: earned value management with a 6-function calculator, part 2

Last time, we focused on how to get the basic project metrics without so much as a basic calculator. On the second part of this post, we’ll focus on estimates.

Estimates seem even trickier than variances and indexes. Because a lot of the original estimating process is fuzzy, it’s easy to assume figures like Estimate to Complete and Estimate at Completion would be hard to understand and hard to believe that – Gasp! – they can be computed with a pen and paper.

Just like last time, we’ll work with a 6-month fictional project with a 50 000$ budget. In order to compute Estimate to Complete and Estimate at Completion, we need the following figures:

Budget at Completion is your project’s total budget. This is (usually) decided when the project is approved
- With our project example, the Budget at Completion is 50 000$.
Earned Value is how much you’ve really accomplished in the project.
- Working with our 6-month project. Let’s pretend that you’re
  only 40% done with the project. That portion of your project budget is
  the Earned Value.
Actual Cost […]