Progress Analysis 

Purpose

You use progress analysis to monitor planned and actual project earned value based on the actual work performed. The system evaluates the work using the total planned costs independently from the costs that are scheduled or posted on an accrual basis.

You can use progress analysis:

·        Internally, to identify schedule variances and cost variances on time

·        Externally, to provide the ordering party with the necessary reports about the execution of the project on time and to cost, for example, for the purpose of milestone billing

You preferably use progress analysis for projects that meet the following criteria:

·        The project is large, meaning you have planned a lot of work packages

·        The project is resource-intensive

Resources can include, for example, the development hours of an R&D project.

·        The project earned value is not subject to the costs incurred

You usually plan the work to be scheduled on activities in the Project System. Therefore, you should carry out the determination of project earned value on activity level.

As your project progresses, you can use progress analysis on an accrual basis to answer the following questions:

·        What has been achieved by the cutoff date, and what is the value of this work?

·        Which work was scheduled?

·        Have schedule variances and cost variances arisen?

The following table contains an overview of the values and key figures that you need to assess the project earned value in progress analysis:

Value or Key Figure	Answers Following Question	Comments
Percentage of completion (POC)	How far has my project progressed by a particular date (cutoff date)?	The POC is either estimated, or determined using rules based on the project data. A distinction is drawn between the planned POC, which describes the share of scheduled work in relation to the total work, and the actual POC, which describes the share of the actual work in relation to the total work.
Earned value (EV)	Which value corresponds to the POC?	The EV arises from the valuation of the POC and the base (for example, the cumulated planned costs or the total budget). The planned EV or  Budgeted Cost of Work Scheduled (BCWS) provides the value of the scheduled work.  The actual EV or Budgeted Cost of Work Performed (BCWP) provides the value of the work performed.
Actual Cost of Work Performed (ACWP)	Which costs have been incurred by a certain date (cutoff date)?	The actual costs incurred to perform the work are shown in the actual costs in progress analysis.
Cost variance (CV) = BCWP - ACWP	Are there any cost variances?	The CV consists of costs arising from schedule variances and costs arising from usage variances.
Schedule variance (SV) = BCWP - BCWS	Are there any schedule variances?	The SV specifies the proportion of the cost variance that has been caused by schedule variances. A positive value means that more work was performed than scheduled,  resulting in higher costs.
Cost performance index (CPI) = BCWP / ACWP	How accurate was my planning?	The CPI specifies the value variance.
Estimated costs at completion (EAC)	Which total costs can arise due to project processing changes?	The expected  cost calculation is EAC = ACWP + (BCWS – BCWP) / CPI. Alternately, you determine the expected costs based on the data in the system by using the cost forecast.

For more information, see Progress Analysis Versus Plan/Actual Comparison.

Process Flow

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       1.      To monitor the project earned value, you carry out periodic progress analysis.

       2.      In progress determination, the system

¡        Determines the POC based on the defined rules or estimated values

¡        Calculates the earned value subject to the base (accumulated planned costs, budget)

       3.      You analyze project progression.

In the Information System you can evaluate the determined data together with other project key figures. In both the plan and the actual, you get an overview of the project earned value over time.

For more information, see Evaluation of Project Earned Value.

Result

Progress analysis provides you with precise information about project earned value (work actually performed), as well as information about costs and schedules. As the system calculates the earned value in relation to the total planned costs, you can see the tendencies independent of the planned and posted costs on an accrual basis, and therefore implement the relevant controls.