Earned Value Management Glossary – Accredited Training Provider
Glossary of Key Terms:
|ACWP||Actual Cost of Work Performed.||The total costs incurred in accomplishing the work completed (usually cumulative to date, or any selected time period).|
|Apportioned Effort.||Support tasks whose effort is planned and estimated as being directly proportional to the direct tasks being supported, e.g. Quality Assurance / inspection.|
|BAC||Budget at Completion||The total value of budget (distributed) within the Performance Measurement Baseline (PMB). Equals sum of Control Account plans plus Planning packages where these are used. Where Fee is involved, this is usually outside of the PMB and therefore BAC.|
|BCWP||Budget Cost of Work Performed (aka Earned Value)||The total budget value of the work performed (in any given time period). This is calculated by adding the sum of the budgets for completed work plus the completed portion of open work packages together with planned budgets for level of effort. This calculation can be made far simpler and more importantly far accurate (i.e. less prone to manipulation) by only including completed activities (or milestones).|
|BCWS||Budget Cost of Work Scheduled (aka ‘planned value’)||The sum of the authorised budgets for work planned to be have been completed plus the level of effort scheduled to be accomplished, usually to date, or any other given time period. Also referred to as ‘planned value‘.|
|CA||Control Account||A discrete WBS element of work extracted from the contract work breakdown structure with an agreed budget and schedule for the achievement of all tasks and objectives of the subject WBS element, which is assigned to a single person or party for execution and management – the Control Account Manager.|
|CAM||Control Account Manager||Responsible for planning, co-ordination and achievement of all work within a control account (CA) work statement; he/she provides a single managerial focal point through which all schedule and cost issues pertaining can be addressed. The responsibilities of a CAM include:- Definition and agreement with the Project Manager the cost account work scope, schedule and budget.- Flowing down CA work scope to supporting departments, and tasking contributors via the agreement of work packages.|
– Monitoring of all CA activities through the review of work packages and network reporting data, and providing status reports.
Conducting formal cost and schedule variance analysis and in the development of any recovery plans required to recover schedule or cost variances.
|CPI||Cost Performance Index||The cost performance index is the performance ratio comparing BCWP and ACWP, for any given period of time. (BCWP/ACWP)|
|CV||Cost Variance||The difference between BCWP and ACWP for any given period of time. (BCWP-ACWP)|
|CWBS||Contract Work Breakdown Structure||The WBS for a specific contract (see WBS below).|
|Distributable Budget||The sum of money, which is approved by Finance, and with which the functional areas finance the scope of work specified in their CAs.|
|EAC||Estimated Cost at Completion||This is the statistical estimate of all costs at complete based upon current performance, calculated by taking actual direct costs allocated to the contract plus a forecast for costs of authorised work remaining based on cumulative performance to date. The most common method for developing EAC is:|
EAC=ACWP+((BCWP-BAC)/ CPI), or BAC/CPI.
Other methods are also used including non-statistical Control Account Manager developed EACs.
|EVA||Earned Value Analysis||Measuring and analysing performance by calculating Earned Value. This is the practice of determining how much of the contract budget has been ‘earned’ on the basis of the actual progress which has been made to date (regardless of the resources deployed to achieve this) and comparing this to the amount of cost incurred and to the planned value.|
|LoE||Level of effort||Effort (tasks) that is supportive (or managerial), which does not produce definitive end products. It is time oriented rather than output oriented, e.g. project management.|
|Master Schedule||A high level timetable of events (usually project milestones), which is agreed between the contractor and the customer for the schedule of deliverables within a programme. The master schedule is a summary plan which must be traceable to lower level schedule plans, i.e. at Work Package and Activity level.|
|Network (Critical path network)||A logic flow diagram in a prescribed format consisting of activities and events which must be accomplished to reach programme objectives. It shows the planned sequence and interrelationships between work in the network.|
|LRE||Latest Revised Estimate||The contractors latest revised estimate of total costs at complete. This is the sum of the forecast of costs for all Control Accounts across the contract, as determined by the Control Account Managers.|
|OBS||Organisation Breakdown Structure||A hierarchical structure for the project organisation detailing lines of responsibility through successive levels from senior managers to work package managers.|
|Planning Packages||Far term work and budget held in high level WBS elements to be planned in detail later downstream – only to be used where absolutely necessary.|
|PMB||Performance Measurement Baseline||A stable time-phased budget plan, aggregated from the resources required to perform the schedule of work, against which cost and schedule performance is measured through the project life-cycle. The PMB excludes Fee and Management Reserve where these are used. The PMB should be maintained under formal change control.|
|RAM||Responsibility Assignment Matrix||A matrix formed by the allocation of cost accounts an OBS element, determining responsibilities for all work across the contract.|
|The Schedule||A timetable of start and finish dates for a list of activities. It is usually calculated from a network plan by a time analysis process, which uses the activity durations in conjunction with the specified logical constraints, resource allocations and availability.|
|To Schedule||The process of calculating the optimum timeline using a critical path network plan including resource constraints and all major dependencies.|
|SoW||Statement of Work||A description of the tasks to be carried out and the deliverables to be produced for any piece of work, e.g. Work Package or Control Account.|
|SPI||Schedule Performance Index||The schedule performance index is the performance ratio comparing BCWP and BCWS for any given time period. (BCWP/BCWS)|
|SV||Schedule Variance||The difference between the BCWP and the BCWS for any given period of time (i.e. BCWP less BCWS).|
|TAB||Total Allocated Budget||The sum of the PMB + reserves, e.g., Management Reserve.|
|WBS||Work Breakdown Structure||A hierarchical structure which breaks down the work required to develop the main deliverable in the contract (and discharge all other contractual obligations) into successive levels of detail until the lowest level consists of readily manageable group of tasks, often referred to as Work Packages.|
|WP||Work Package||A unit of work at the level where the work is performed and managed. A work package should have a relatively short time period, a budget expressed in money or labour units, a scheduled start and finish. It will, wherever possible, have a set of interim milestones that represent measurable points of physical accomplishment.|
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