During execution you need to know how much work was planned, how much has been done and what cost you have recorded to achieve it. KOSAN brings together planned value, earned value and actual expenses in its S-curve module, with indicators that help review the performance of the project.
A comparison with the three references allows us to detect important questions: does the expense correspond to the progress? Is there less work executed than expected? What would happen if the current efficiency continued until finished?
What does an S-curve represent?
A cumulative advance curve shows how an amount is distributed over time. It can represent budgeted amount, recorded cost or value of work performed. The name S-curve refers to a common form of accumulation; The actual shape depends on the programming and data of each project.
To interpret it you must identify what each line measures and the cut-off date. A collections curve, for example, answers a different question than a valued physical progress curve.
The three values that should be distinguished
- PV, planned value: budgeted amount of the project planned until the cutoff.
- EV, earned value: budgeted amount of work actually performed.
- AC, actual cost: recorded cost of the project considered in the analysis.
The earned value uses the budget as a reference to evaluate the work performed. Therefore, it allows progress and expenditure to be compared on a common economic basis. PMI methodological reference on earned value.
The total budget of that base is called BAC. To work with these indicators, define the same scope and economic criteria in BAC, PV, EV and AC. Also check the tax treatment and overhead costs.
Example: spending less than planned can hide less progress
Let us assume a budgeted cost basis of $1,000,000, before VAT. At the outage, work was expected to be executed for $500,000; Work has been performed whose budgeted value is $400,000 and costs of $460,000 have been recorded. These are hypothetical figures, not data from a KOSAN client.
| Indicator at reporting cut-off | Example amount |
|---|---|
| BAC: total budget | $1,000,000 |
| PV: planned work, valued at the budget | $500,000 |
| EV: work executed, valued at budget | $400,000 |
| AC: actual cost of the project considered | $460,000 |
If you looked only at PV and AC, you would find an expense $40,000 less than the programmed reference. By including EV you see that this expense corresponds to work budgeted in $400,000.
Two relationships help to interpret the case:
SPI = EV ÷ PV = $400,000 ÷ $500,000 = 0.80.
80% of the value of the project planned at the cutoff has been executed. This indicator needs to be complemented with the review of activities and critical path to assess the effect on termination.
CPI = EV ÷ AC = $400,000 ÷ $460,000 ≈ 0.870.
For each peso of cost recorded, approximately $0.87 of work valued at the budget has been generated. The cost variation is EV − AC = −$60,000 and the scheduled work variance is EV − PV = −$100,000.
What a final cost projection can say
If we assume that the observed cost performance continues for the entire scope, we can use:
EAC = BAC ÷ CPI = $1,150,000.
EAC represents an estimate at the end. The projection gives an outstanding cost, or ETC, of $1,150,000 − $460,000 = $690,000, and a variation to the term, or VAC, of $1,000,000 − $1,150,000 = −$150,000.
Results use unrounded CPI. They are a projection under the indicated assumption; A change in method, scope or productivity requires revising the estimate. The PMI describes this use of BAC/CPI conditional on the continuity of observed performance. Projection method and its assumptions.
How KOSAN organizes the information
The module S-curve — planned value, earned value and actual cost takes the budget from the catalog, the construction schedule, the progress captured and the recorded expenses. Presents the three series and shows SPI, CPI, EAC, ETC and VAC.
To build a useful comparison, review the catalog amounts that you use as a reference: the system starts from those values. A catalog to selling price and a record to direct costs have different bases; defines a comparable basis before interpreting CPI as cost efficiency.
In Comprehensive administration You can record expenses, dates, type and associated activity. This information feeds the economic analysis of the project. The practical advantage is to relate budget, programming, progress and expense within the same work environment.
How to prepare a reviewable reporting cut-off
- Defines the catalog and the economic scope of reference.
- Complete the program and match line items with activities.
- Capture progress supported by executed quantities.
- Record expenses with consistent dates and classifications.
- Review PV, EV, and AC before interpreting their ratios.
- Investigate the activities that explain the differences and propose actions.
Keep the reporting cut-off used documented. When there are major changes, it preserves the previous reference and records which scope was added or removed.
Frequently asked questions
Does an SPI of 0.80 mean that the job will finish 20% late?
The index compares the value of the project executed and planned. To estimate a completion delay you need to review sequence, durations, clearances and critical path.
Can a CPI be interpreted without recorded costs?
A valid actual cost base is required. A partial capture may produce a relationship that does not represent the performance of the scope analyzed.
Does the S-curve replace the field review?
The graph organizes data and indicates differences. Measurements, causes and actions are reviewed with execution information.
KOSAN connects the necessary references to analyze progress and cost, and helps you turn a cumulative report into decisions you can explain.
Complement the reading of the indicators with the critical path and schedule crashing guide.