Effective Project Controls: Earned Value (EV) vs Earned Schedule (ES)

Conventional techniques for monitoring project progress, such as Earned Value Management (EVM), have been widely used to oversee and regulate project schedules. However, a new and innovative method called Earned Schedule (ES) has emerged as a formidable alternative in the field of time controls and indicators. ES offers significant advantages over traditional Earned Value Management, delivering deeper insights into project performance, schedule variance, and projected completion dates. This article explores the rising popularity and effectiveness of Earned Schedules as a valuable tool for project managers, aiming to enhance time control and improve forecasting accuracy.

Understanding Earned Value (EV):

Earned Value is an essential tool utilized by professionals in project controls, providing valuable information regarding cost performance. It comprises three main elements: Planned Value (PV), Earned Value (EV), and Actual Cost (AC). PV represents the planned budget for the work, EV represents the budgeted cost for the work that has been completed, and AC represents the actual cost incurred. By comparing these values, project managers can assess cost variances and evaluate the overall project performance.

To calculate PV, EV, and AC, specific formulas are applied. PV is determined by multiplying the planned percentage of work completed by the total budget. EV is obtained by multiplying the actual percentage of work completed by the total budget. AC represents the total cost incurred for the project. Cost Variance (CV) is calculated by subtracting AC from EV, while Schedule Variance (SV) is obtained by subtracting PV from EV. These formulas, seamlessly integrated within the P6 software, provide real-time insights into cost and schedule variances, enabling project managers to make informed decisions.

Earned Value (EV) Formulas:

• Planned Value (PV): Planned % Complete * Total Budget
• Earned Value (EV): Actual % Complete * Total Budget
• Actual Cost (AC): Total Cost Incurred
• Cost Variance (CV): EV – AC
• Schedule Variance (SV): EV – PV

Earned Schedule (ES):

Earned Schedule (ES) complements Earned Value (EV) by placing emphasis on schedule performance, offering project control professionals a comprehensive understanding of project progress. By incorporating the time factor, ES becomes an invaluable tool in project controls, enabling the identification of schedule deviations and facilitating project completion predictions.

The calculation of ES metrics involves several steps. Planned Duration (PD) is derived by dividing the total planned work by the planned productivity rate. Earned Duration (ED) is obtained by multiplying the actual percentage of work completed by PD. Actual Duration (AD) represents the total elapsed time. Schedule Performance Index (SPI) is computed by dividing ED by PD, while Schedule Variance (SV) is obtained by subtracting PD from ED. The integration of these calculations within the P6 scheduling system enhances schedule forecasting and improves the accuracy of project controls.

A well-managed construction schedule is crucial for tracking project progress and ensuring timely completion.

Earned Schedule (ES) Formulas:

• Planned Duration (PD): Total Planned Work / Planned Productivity Rate
• Earned Duration (ED): Actual % Complete * PD
• Actual Duration (AD): Total Elapsed Time
• Schedule Performance Index (SPI): ED / PD
• Schedule Variance (SV): ED – PD

Earned Value vs Earned Schedule: Key Differences

ES and EV are distinguished by their calculation methods and areas of focus. EV primarily concentrates on cost management, enabling project managers to track cost variances, predict project outcomes, and assess financial performance. It compares the budgeted cost of work performed (Earned Value) with the actual cost incurred (Actual Cost), calculated by multiplying the percentage of work completed by the total budgeted cost.

In contrast, ES emphasizes schedule performance and provides insights into project progress over time. It assists project managers in monitoring schedule variances, identifying delays or deviations from the planned timeline, and improving forecast accuracy for project completion dates. ES calculates project progress by determining the earned duration, obtained by multiplying the actual percentage of work completed by the planned duration.

By utilizing both EV and ES together, project managers can comprehensively assess project performance. They can evaluate cost adherence, track schedule variations, and make informed decisions regarding adjustments to schedules and resource allocation. This integrated approach ensures effective management of project timelines and budgets.

Integrating ES and EV in P6:

By aligning the metrics and calculations of ES and EV, project managers can compare the earned value (EV) with the earned duration (ED) to analyze cost and schedule performance simultaneously. This harmonization enables a holistic assessment of project efficiency and supports more informed decision-making. Moreover, integrating ES and EV enhances the accuracy of cost forecasting. By incorporating the earned duration (ED) into EV calculations, project managers can obtain more precise estimations of cost at specific time points. This integration facilitates the identification of potential cost overruns or savings based on the actual progress of the project against the planned schedule.

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Here are some steps to integrate ES with Primavera P6:

1. Enable Earned Value: Make sure the Earned Value functionality is enabled in Primavera P6 to capture and track project costs and progress.
2. Define activity progress: Assign planned durations to activities in Primavera P6 and regularly update their progress as work is completed.
3. Calculate Earned Value: Choose a suitable method (e.g., Percent Complete or Physical Percent Complete) in Primavera P6 to calculate Earned Value based on the updated progress.
4. Create ES fields: Since Primavera P6 may not have built-in ES fields, create custom fields to store ES metrics such as Planned Duration (PD), Earned Duration (ED), and Actual Duration (AD).
5. Calculate ES metrics: Utilize Primavera P6’s formulas or scripts to automatically calculate ES metrics based on the progress data. For example, calculate Earned Duration by multiplying the Percent Complete by the Planned Duration.
6. Analyze ES metrics: Utilize Primavera P6’s reporting and analysis features to generate reports and assess schedule variances using the ES metrics.
7. Monitor and adjust: Continuously update progress in Primavera P6 to reflect the actual work completed. Regularly monitor the ES metrics to identify any deviations from the planned schedule and make necessary adjustments.

By following these simple steps, schedulers can integrate Earned Schedule with Primavera P6, allowing them to effectively monitor and control project schedules while incorporating the benefits of ES for improved schedule performance analysis.

Examples of using ES along with ES Calculations:

Earned Value (EV) Example:

• Planned Value (PV): $50,000
• Earned Value (EV): $40,000
• Actual Cost (AC): $45,000
• Cost Variance (CV): EV – AC = $40,000 – $45,000 = -$5,000 (over budget)
• Schedule Variance (SV): EV – PV = $40,000 – $50,000 = -$10,000 (behind schedule)

Earned Schedule (ES) Example:

• Planned Duration (PD): 20 weeks
• Earned Duration (ED): 15 weeks
• Actual Duration (AD): 18 weeks
• Schedule Performance Index (SPI): ED / PD = 15 / 20 = 0.75 (75% of planned schedule)
• Schedule Variance (SV): ED – PD = 15 – 20 = -5 weeks (behind schedule)

CONCLUSION

Integrating Earned Schedule (ES) and Earned Value (EV) techniques within P6 scheduling is instrumental in enhancing project control practices. By considering both cost and schedule performance, project managers can make well-informed decisions to ensure the success of their projects. At Leopard Projects Controls, we have accumulated experience in providing comprehensive project control services. We invite readers to take advantage of our services and discover how we can effectively assist in managing the challenges of ES, EV, and P6 scheduling. Get in touch with us today to unlock the full potential of project controls within your organization.

For more insights on how to effectively measure performance in your construction business using Key Performance Indicators (KPIs), check out our detailed guide here.