Ariba Implementation Implementation at MED-X: Managing Earned Value
Project Management MGT 8803 March 2, 2011
Why is the Proj ect Underperf ormi ng?
The Ariba implementation at MED-X had gotten off track early in the project timeline. As illustrated in the earned value analysis, the project was over budget and behind schedule by the end of June; only two short months after the project had kicked off. Isolating the earned value analysis to investigate the software customization and technical infrastructure portions of the project individually, it can easily be seen that the technical infrastructure portion of the project had caused the delay .
The schedule performance indicator (SPI) for the technical infrastructure segment of the proj ect was 0.929 at the end of June and 0.919 at the end of July, indicating a schedule delay. However, the SPI maintained an upward trend through August and September, suggesting t hat the project was making up some of the ground it lost during the earlier months. Therefore, the primary cause of the delay must have occurred in late June (after the CRP) and/or July during the early part of the “Build” phase.
This delay could have been caused by an array of events. First, it is stated that early in the project a MEDX staffer had been repeatedly pulled from the project to tend to other duties. This may have created a delay providing information to the implementation team early in the build phase. This could have also created delays in providing the team with the required network access and permissions to effectively do their job. Further, some of the server equipment was received late. This delay of equipment would certainly affect the overall project schedule, but it would most likely impact the technical infrastructure segment the most. Lastly, it is mentioned that testing was scheduled late in July and that uncovered more issues than were anticipated.
Why did T err y Baker thi nk th e proj ect was going accordin g to plan the enti re time?
Terry Baker did a poor job of following the project. She did not have proper controls in place that would keep her informed. Also, it seems that Martin realized that there were issues early on in the project, but he did not communicate these issues to Terry. In the future, Terry needs to have the consultants give her regular reports, with detailed analysis and projections of where they are, and when they will finish.
H ow much l onger wil l the project take and how much wi ll it cost when completed if no adjustments are made?
Due to the delays in the development of the Technical Infrastructure, the project will run 11 days over if no adjustments are made. This can be calculated by dividing the number of planned days, 184, by the schedule performance index, which is .944 at the end of September. Combining the Software Customization and T echnical Infrastructure projected costs shows that the project will actually come in under budget by $64,770.05, at a total projected cost of $1,831,229.95. This is due to Software Customization being under budget by a great deal. This projection was found by dividing the original cost by the cost performance index, which is 1.188 for the Software Customization and is 0.917 for Technical Infrastructure. These numbers can be seen in the attached spreadsheet.
I s there anything M arti n can do at thi s point to help the project f in ish according to pl an? I f so, please elaborate and show your an alysis.
The project is currently running 10 days late but is over budget by over $60,000. The ETC is 10 days over for the Technical portion but about 15 under for software customization. Martin can allocate some of the staff from the software customization side of the project to help with the Technical side which is running behind schedule. If there is not enough people that could help, since he is still under budget, he can use some of the remaining budget to hire on some part time staff to also speed up the project. He can also align incentives of finishing the project faster by creating a n extrinsic motivation of finishing t he allocating some of the budget to give bonuses for finishing t he Technical infrastructure ahead of schedule.
What should M arti n do in f utur e projects to prevent simil ar problems fr om happenin g?
Martin should pay closer attention to the Earned Value Analysis and have it as a constantly updated document so he can spot problems like this ahead of time. He should also have higher visibility and transparency so that this delay is not a surprise to Terry when it happens. If he spots a problem like this early he can reallocate resources to put the project back on time. Martin should make sure to order the hardware required for the project ahead of when it i s required, to make sure a delay in shipping will not
delay the project. Martin should also use more testing and milestones for the tasks so that there are not large sections of work that come back with errors.
Exhibit 1. Earned Value Analysis. Earned Value Analysis Software Customization
Monthly Plan
Software
May
Jun
Jul
Aug
Sep
Oct
Monthly Status
Plan Actual Burn Actual Performa nc e
BCWS ACWP B CWP
$120,000 $119,000 $133,250
$192,000 $ 187,000 $197,000
$192,000 $ 165,000 $220,000
$192,000 $189,000 $215,000
$192,000 $186,000 $240,000
$60,000
Rolling Status
Plan Actual Burn Ac tua l Perf orma nc e
BCWS ACWP B CWP
$120,000 $119,000 $ 13 3, 25 0
$312,000 $ 306,000 $ 330 ,2 50
$504,000 $ 471,000 $ 550 ,2 50
$696,000 $660,000 $ 76 5, 25 0
$888,000 $846,000 $ 1, 00 5, 25 0
$948,000
R ol li ng R ati os
Sc hedul e Impa ct
SV = BC WP - B CWS SPI = BCWP/BCWS
$13,250 1.110
$18,250 1.058
$46,250 1.092
$69,250 1.099
$117,250 1.132
Cos t Impac t
C V = B CWP - AC WP CPI = BCWP/ACWP
$14,250 1.120
$24,250 1.079
$79,250 1.168
$105,250 1.159
$159,250 1.188
Control Ratio
CR = SPI x CPI
1.243
1.142
1.275
1.275
1.345
BTC: ETC: Technical Infastructure
154 136.037802
BAC: EAC:
$948,000 $797,819.45 -$150,180.55
Monthly Plan
Technical
May
Jun
Jul
Aug
Sep
Oct
Monthly Status
Plan Actual Burn Actual Performa nc e
BCWS ACWP B CWP
$120,000 $120,000 $120,000
$192,000 $ 215,000 $170,000
$192,000 $ 192,000 $173,000
$192,000 $216,500 $190,000
$192,000 $170,000 $185,000
$60,000
Rolling Status
Plan Actual Burn Actual Performa nc e
BCWS ACWP B CWP
$120,000 $120,000 $120,000
$312,000 $ 335,000 $290,000
$504,000 $ 527,000 $463,000
$696,000 $743,500 $653,000
$888,000 $913,500 $838,000
$948,000
R ol li ng R ati os
Sc he dul e I mpa ct
SV = B CWP - B CWS SPI = BCWP/BCWS
$0 1.000
- $2 2, 00 0 0.929
- $4 1, 00 0 0.919
- $43 ,0 00 0.938
- $50 ,0 00 0.944
C V = B CWP - AC WP CPI = BCWP/ACWP
$0 1.000
- $4 5, 00 0 0.866
- $6 4, 00 0 0.879
- $90 ,5 00 0.878
- $75 ,5 00 0.917
CR = SPI x CPI
1.000
0.805
0.807
0.824
0.866
$948,000 $1,033,410.50
$85,410.50
Cos t Impac t
Control Ratio
BTC: ETC: Combined Projects
154 163.188544
Monthly Plan
BAC: EAC:
May
Jun
Jul
Aug
Sep
Oct
Monthly Status
Plan Actual Burn Actual Performa nc e
BCWS ACWP B CWP
$240,000 $239,000 $253,250
$384,000 $ 402,000 $367,000
$384,000 $ 357,000 $393,000
$384,000 $405,500 $405,000
$384,000 $356,000 $425,000
$120,000
Rolling Status
Plan Actual Burn Actual Performance
BCWS ACWP BCWP
$240,000 $239,000 $253,250
$624,000 $641,000 $620,250
$1,008,000 $998,000 $1,013,250
$1,392,000 $1,403,500 $1,418,250
$ 1,776,000 $1,759,500 $1,843,250
$1,896,000
Rolling Ratios
Schedule Impact
SV = BCWP - BCWS SPI = BCWP/BCWS
$13,250 1.055
-$3,750 0.994
$5,250 1.005
$26,250 1.019
$67,250 1.038
Cost Impact
CV = BCWP - ACWP CPI = BCWP/ACWP
$14,250 -$20,750 1.060 0.968
$15,250 1.015
$14,750 1.011
$83,750 1.048
Control Ratio
CR = SPI x CPI
1.021
1.030
1.087
1.118
0.962
Total Projected Cost: $1,831,229.95 Difference: -$64,770.05
