Chapter 14: Using (Web site counters) Earned Value Management in Software
Chapter 14: Using Earned Value Management in Software Projects 289 keep in mind is that you want to figure out how much your cost and schedule vary from what you had originally planned. Determining the estimate to complete the project When you determine the estimate to complete (ETC) your project, you estimate how much more you should expect to spend for the rest of the project activities based on your performance thus far. You can do this mathematically without a lot of swanky formulas. Say you already know that your actual costs are $25,000, and that you know that your EAC is $125,000. So you can expect that to complete the project activities you will have to spend $125,000 $25,000, which is $100,000. You expected to spend $125,000 and you ve actually spent $25,000 thus far, so you have $100,000 more costs to completion if the variances you ve had thus far can be considered typical and you expect future variances to also be typical. Knowing that you have $100,000 left in your budget to spend is not enough information to tell you whether you re over- or underbudget. But you need to know where your project stands at this moment if you want to determine whether you re within your budget. We explain what to do with these numbers in the following sections. Uh-oh! What s your variance? Of course, there s no point in calculating all these formulas unless you determine how much the values vary from your project estimates. You use variance analysis to start figuring out if your variance is significant, what the reason for the variance is, and what, if anything, you should do about it. First you should determine your cost variance (CV). You perform a variance analysis to determine whether you re over- or underbudget and ahead of or behind schedule. This analysis provides you with the information you need to proactively make changes to get your project back on the right path. Usually, variance analysis is performed on the cost and the schedule, but you could also perform a variance analysis on project scope, risks, quality, or other measurable areas of your project. In this chapter, we focus primarily on variance analysis for costs and schedule. Table 14-3 summarizes the variance formulas we discuss in the next couple of sections.
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