PMP Formula: Earned Schedule
In the project management profession, there is a movement in support of the Earned Schedule (ES) tool to provide performance metrics in terms of time instead of cost. ES is considered an alternative tool and as such, has not been fully adopted by the Project Management Institute (PMI) as of this writing nor is it included in the Project Management Professional (PMP)® certification exam. Project Managers should know Earned Schedule (ES) is a way to transform Earned Value Management (EVM) metrics into time or duration measurements. Additional study is needed to determine if it brings value to a particular project or group.
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Earned Schedule (ES) Defined
The proponents of the Earned Schedule tool and tool kit provide detailed information on the website: Earned Schedule.com. Earned Schedule, not to be referred to as “Earned Schedule PMP,” is not included on the PMP® certification exam and does not replace the Earned Value Management (EVM) tool kit which is focused on cost performance.
|Earned Schedule Concept|
Identify the time at which the amount of earned value (EV) accrued should have been earned; by determining this time, time-based indicators can be formed to provide schedule variance and performance efficiency management information.
– Source Earned Schedule.com Concept Description
As noted in the PMI conference paper Earned Schedule, “…Earned Value Management works well for measuring cost performance, but the classic metric for schedule, SPI = EV / PV is lousy for tracking schedule.” EVM can, in certain scenarios, indicate a project is on schedule when in fact the work has continued past the original target completion date. That conundrum is the driver behind what has become Earned Schedule.
|Earned Schedule (ES)|
Identify the time at which the amount of Earned Value (EV) accrued should have been earned
— Source https://www.apm.org.uk/media/1233/earned-schedule.pdf
Earned Schedule Calculation
Earned Schedule is, as the name implies, focused on schedule. ES gives project managers insight into units of time or duration. The formula, incorrectly referenced as “earned schedule formula PMP” in some circles, uses common metrics but with units of time not cost. To calculate ES, the formula uses these inputs expressed in units of cost (money or time): Earned Value (EV), Actual Time (AT), and Planned Duration (PD). As included in the PMI conference paper The Earned Schedule: “… PV, AC, and EV can be calculated for any element of work to determine progress and status of that element of work.”
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Earned Value (EV)
Formerly known as Budgeted Cost of Work Performed (BCWP), the EV is determined by multiplying the planned cost by percentage complete. It is provided in cost units.
|Earned Value (EV)||amount of work completed as of the status date|
Actual Time (AT)
Previously known as Actual Cost of Work Performed (ACWP), the AT is the sum of all costs for all work done to date. Like EV, it is expressed in cost units.
|Actual Time (AT)||Actual time as of the status date|
Planned Duration (PD)
The duration is, of course, measured in units of time. It is the time originally planned to complete all work.
|Planned Duration (PD)|
The original duration of the project schedule
Earned Schedule Visual Representation
The same values used in traditional EVM work, EV, AT, and PD are used for ES. From the Earned Schedule.com site, here is a graph example showing the values:
Earned Schedule (ES) is an analytical technique providing time-based indicators, in contrast to the cost-based indicators from EVM. With the ES technique, the project manager has a status and predictive ability for schedule, analogous to the facility for cost using EVM.
What Earned Schedule Measures
Earned Schedule (ES) can be used in conjunction with traditional EVM tools because they use the same values but provide indicators for different project elements: schedule and cost respectively. According to the official site of the ES tool, “it can be used for detailed schedule analysis and that it has the potential to improve both cost and schedule prediction.”
Earned Schedule Benefits
PMP credential holders may find value in the PMI conference paper The Earned Schedule’s listing of the benefits realized with the ES tool:
- uses existing EVM metrics to enhance the evaluation of project schedule performance
- uses existing EVM metrics to forecast the duration needed to complete the project
- provides additional schedule insights without the need for additional data collection or related cost.
- uses the same underlying assumptions as EVM leading to consistent outcome forecasts
Note that Earned Schedule (ES) and the term earned schedule PMP, is not currently be found on the PMP Exam Content Outline (ECO). However, it is included in the PMBOK® Guide 6th edition with the heading “Trends and Emerging Practices in Project Cost Management.”
What to know for the PMP® certification exam
Earned Schedule is still deemed an “emerging practice” by PMI yet there are tools and research to support it. To better understand the concept, know these core things:
- It was introduced in 2003 in Walter Lipke’s article “Schedule is Different,” in the College of Performance Management’s magazine The Measurable News
- Earned Schedule is a measurement of performance against the project schedule and is an extension to Earned Value Management.
- Traditional EVM uses cost metrics to articulate performance, but Earned Schedule helps track project progress when insights into cost may not be readily available or if a stakeholder wants more reporting focused on schedule variables.
- ES does not replace EVM. In fact, when used in conjunction with EVM, ES provides additional insights into the project schedule for better outcomes.
As there is not an “earned schedule formula PMP,” no exam questions will reference the concept, even at a high level or in relation to other schedule forecasting tools that are officially part of PMI best practices.
Find the full ES toolset at www.earnedschedule.com. Stakeholders, including executives, sponsors, project managers, project team members, and customers, seek reliable tools for managing project work from concept to plan to execution. Earned Value Management (EVM) is a methodology providing insights into scheduling and costs. Earned Schedule, ES, can use the same values as EVM to provide an additional layer of insight specifically into scheduling. As it is not officially adopted by PMI for the purposes of the PMP exam, project managers must use their best judgment before incorporating it into their toolbox.
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