RAMBOTICS New Generation Robot Project EV Analysis

Project Overview

RAMBOTICS Corporation is working on an exciting new initiative referred to as the "New Generation Robot Project." The project charter scheduled the project kickoff for January 1, 2016. This analysis presents an overview of the project's status report after approximately eight months of execution, fast-forwarding to August 2016.

The project encompasses activities that fall within one of nine different categories. Work progresses through the robot's electronics, components, and software before moving into body design and overall design finalization. The activity dependencies are structured as follows:

Earned value management (EVM) is the analytical framework used throughout this report to assess the project's cost and schedule performance against the approved baseline.

Projected Baseline Costs

The table below presents the projected baseline costs and cumulative work estimates for each task in the New Generation Robot Project. The grand total budget at completion (BAC) is $680,000, corresponding to 68 cumulative months of work.

Electrical Design represents the single largest cost item at $240,000, reflecting its 24-month cumulative work allocation. Robot Body Design is the second largest at $80,000. All remaining tasks are budgeted at $40,000 each, with the exception of Assemble Boards at $120,000.

Earned Value Analysis

The following table presents the EV analysis task data at the eight-month mark, showing baseline work, baseline duration, percent work complete, actual duration, and actual work for each activity.

Several key observations emerge from this data. Electrical Design and Software Design are the only tasks reported as 100% complete. Assemble Boards and Robot Body Design are each 75% complete. Programming stands at 80% complete. Test Boards, Software Testing, Robot Construction, and Final Assembly have not yet begun, each showing 0% completion. At the project level, overall work is 68% complete against a planned 12-month baseline duration, while the revised duration forecast has extended to 15 months, with an actual duration elapsed of approximately 8.91 months.

EV Calculations and Key Metrics

The core EVM performance metrics calculated at the end of the eight-month period are summarized below:

A CPI of 0.81 indicates that for every dollar spent, only $0.81 of budgeted work has been accomplished. An SPI of 0.79 indicates that the project is progressing at approximately 79% of the planned rate. Both indices falling below 1.0 confirm that the project is simultaneously over budget and behind schedule. The estimate at completion (EAC) of $838,961 represents a projected cost overrun of approximately $158,961 relative to the original BAC of $680,000.

Conclusion

Unfortunately, the project is both behind schedule and over budget. This is common among many technology projects, and RAMBOTICS does have some options given that the project has only achieved 68% progress. For example, many of the project's activities could potentially be crashed — that is, accelerated by adding resources — if the deadline is critical to the organization's strategy. If the deadline is not the key constraining factor, the company could proceed with activity durations as previously planned; however, it is likely that the project will exceed its budget regardless. At this stage, the primary management question is not whether a cost overrun will occur, but rather the extent to which it can be controlled.