Budgeted Costs or Planned Costs (What is best practice for updating planned Work?)
I have a question/suggestion regarding best practice of updating the planned Work as a project progresses. It seems to me Budgeted Costs is better thought of as 'Planned Costs' since this value is changing as the project plan changes (i.e. remaining work is updated).
I am struggling with this because of the following relationships:
- Work --> Budgeted Costs
- Budgeted Costs --> Earned Value
- Earned Value --> CPI
What I am seeing because of these relationships, is that as I update my Work based on lets say a better understanding of how much time it will take for us to complete a task, my CPI remains at 1. While this may look good to anyone just looking at KPI's of a project, its not the real story. The Earned Value field, it seems to me, should look at either Baseline Cost or Budgeted Amount (which are not calculated fields, thus should remain constant throughout the project unless manually and intentionally changed). This in effect would result in the proper calculation of Earned Value, which is to be based off an original budget, not planned costs (updated as the project plan progresses). This of course would then result in the proper CPI KPI which is to be based on how efficient our costs at completing the work are, based on the baseline budget.
Is there a better way to manage this I am somehow overlooking?
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