Earned value for a new hospital software project is calculated

Earned Value Management (EVM) is a project management technique used to measure project performance and progress. In the context of a new hospital software project, EVM can be used to calculate the earned value of the project. Here's a step-by-step guide to calculate earned value for a new hospital software project:

Step 1: Define the project scope and schedule

• Identify the project scope, including the features and functionalities to be developed.
• Create a project schedule, including the start and end dates for each task or activity.

Step 2: Estimate the planned value (PV)

• Estimate the total value of the project, including the cost of development, testing, and deployment.
• Break down the project into smaller tasks or activities, and estimate the planned value (PV) for each task.
• Calculate the total planned value (PV) by summing up the PV for each task.

Step 3: Estimate the earned value (EV)

• Track the progress of the project, and estimate the earned value (EV) for each task or activity.
• Earned value is the value of the work that has been completed, as measured against the planned value.
• Calculate the earned value (EV) by multiplying the percentage of completion for each task by the planned value (PV) for that task.

Step 4: Calculate the schedule performance index (SPI)

• Calculate the schedule performance index (SPI) by dividing the earned value (EV) by the planned value (PV).
• SPI = EV / PV

Step 5: Calculate the cost performance index (CPI)

• Calculate the cost performance index (CPI) by dividing the earned value (EV) by the actual cost (AC) of the project.
• CPI = EV / AC

Step 6: Calculate the variance (V)

• Calculate the variance (V) by subtracting the earned value (EV) from the planned value (PV).
• V = PV - EV

Step 7: Calculate the schedule variance (SV)

• Calculate the schedule variance (SV) by subtracting the earned value (EV) from the planned value (PV), and then multiplying the result by the SPI.
• SV = (PV - EV) x SPI

Step 8: Calculate the cost variance (CV)

• Calculate the cost variance (CV) by subtracting the earned value (EV) from the actual cost (AC), and then multiplying the result by the CPI.
• CV = (EV - AC) x CPI

Example:

Suppose we have a new hospital software project with a planned value (PV) of $1,000,000, and we have completed 60% of the project. The actual cost (AC) of the project is $600,000.

Step 1: Define the project scope and schedule

• Project scope: Develop a new hospital software system with features for patient registration, scheduling, and billing.
• Project schedule: The project is scheduled to take 12 months, with milestones at the end of each quarter.

Step 2: Estimate the planned value (PV)

• Planned value (PV) = $1,000,000

Step 3: Estimate the earned value (EV)

• Earned value (EV) = 60% x $1,000,000 = $600,000

Step 4: Calculate the schedule performance index (SPI)

• SPI = $600,000 / $1,000,000 = 0.6

Step 5: Calculate the cost performance index (CPI)

• CPI = $600,000 / $600,000 = 1.0

Step 6: Calculate the variance (V)

• V = $1,000,000 - $600,000 = $400,000

Step 7: Calculate the schedule variance (SV)

• SV = ($1,000,000 - $600,000) x 0.6 = $240,000

Step 8: Calculate the cost variance (CV)

• CV = ($600,000 - $600,000) x 1.0 = $0

In this example, the earned value (EV) is $600,000, which is 60% of the planned value (PV). The schedule performance index (SPI) is 0.6, indicating that the project is behind schedule. The cost performance index (CPI) is 1.0, indicating that the project is on track in terms of cost. The variance (V) is $400,000, indicating that the project is behind schedule and over budget. The schedule variance (SV) is $240,000, indicating that the project is behind schedule. The cost variance (CV) is $0, indicating that the project is on track in terms of cost.