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Rikdev Bhattacharya

OPIM 5668: Project Risk and Cost Management - Homework #1

PeopleSoft ID: 2381320
Ariba Implementation at MED-X: Managing Earned Value

a. Which of the two components are underperforming according to the plan? How do you know

Answer: The Technical Infrastructure Plan is underperforming based on the estimated Cost Baseline and
Schedule estimates. This can be confirmed based on a detailed Earned Value analysis.

Both CPI (Cost Performance Index) and SPI (Schedule Performance Index) have been below the desired level
of 1 and has had a negative downward trend spread across the last 6 Months.

From this we can infer that the Technical Infrastructure Plan is both behind the schedule and over the
estimated budget.

b. Are the components of the project within budget? How do you know?

Answer: Software Customization Plan is within budget. It can be estimated by the below calculations of EAC
and VAC. The component is currently within the budget and making a saving of $ 150,020.20.

Software Customization Plan

BAC $ 948,000.00
CPI 1.188
EAC BAC/CPI $ 797,979.80
BAC-EAC $ 150,020.20

Technical Infrastructure Plan is over budget. It can be estimated by the below calculations of EAC and VAC.
The component is currently over budget and making a loss of $ 85,467.79.

Technical Infrastructure Plan

BAC $ 948,000.00
CPI 0.917
EAC BAC/CPI $ 1,033,467.79
BAC-EAC $ (85,467.79)

c. What can you conclude by looking at the combined earned value data for the entire project?

Answer: Based on a detailed combined Earned Value analysis we can conclude that both CPI (Cost
Performance Index) and SPI (Schedule Performance Index) have been above the desired the desired level of 1
and the overall project is on track to be finished before schedule and under budget.

The project seems to be $ 86,148.91 under budget.

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Combined Plan
$ 1,896,000.00
CPI 1.048
EAC BAC/CPI $ 1,809,851.09
C EAC 86,148.91

The project seems to be 6 days before schedule.

Combined Plan
Schedule 184.00
SPI 1.0379
Estimated Schedule Schedule/SPI 177.28
Variance Schedule-ES 6.72

d. Why did Terry Baker think that the project was going according to plan the entire time?

Answer: The Technical and Software components of the projects when combined appeared to be on track and
be completed $86,148 under budget and 6 days early.

Viewing the project as a consolidate one can completely distort the true status of the project. This information
would have led Terry Baker to believe the project was going according to the plan the entire time with minor
hiccups in June.

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e. How much longer will the project take?

Answer: The Technical Infrastructure Plan appears to be delayed and can be safely assumed to be on the
Critical Path. Thus, the combined project completion date would correspond to the time taken for the
Technical Infrastructure Plan.

Below are the calculations:

Technical Infrastructure Plan

SPI 0.944
Estimated Schedule/SP
Schedule I
Variance Schedule-ES -11.0

The project would take 11 additional days to be completed. Thus, the project would take 31+11 i.e. 42
more days to be completed. The total project duration would be 195 Days.

f. What should Martin have done earlier in the project timeline to prevent delays?


A detailed Work Breakdown structure to keep a tab on the various tasks and identify the critical path.

Monitoring and periodic reviewing the tasks on critical path for the combined project tasks and
prioritizing resources based on the criticality of the problem.

Analyzing Earned Value metrics for individual components of the project to determine if the project is
going over budget and behind schedule in some specific components.

A better visibility on some of the problems in the key tasks would have helped him to reallocate
resources to balance the project.

g. What should Martin do when managing future projects to prevent similar problems from


Martin should define a more granular work breakdown structure and identify tasks which are on the
Critical Path.

Implement earned value analysis in the early stages of the project and compute individual and
combined analysis to determine the health of the project.

Stricter and regular monitoring and control of the project should be done.

Better resource planning and enabling a smooth communication plan to reach out to various key
stakeholders in the organization.

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