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1. Define the work using a WBS. This step involves developing documents that include the following information (see Chapters 4 and 5):a. Scope.b. Work packages.c. Deliverables.d. Organization units.e. Resources.f. Budgets for each work package.
2. Develop work and resource schedule.a. Schedule resources to activities (see Chapter 8).b. Time-phase work packages into a network.
3. Develop a time-phase budget using work packages included in an activity. The cumulative values of these budgets will become the baseline and will be called the planned budgeted cost of the work scheduled (PV). The sum should equal the budgeted amounts for all the work packages in the cost accounts (see Chapter 8).
4. At the work package level, collect the actual costs for the work performed. These costs will be called the actual cost of the work completed (AC). Collect percent complete and multiply this times the original budget amount for the value of the work actually completed. These values will be called earned value (EV).
5. Compute the schedule variance (SV = EV - PV) and cost variance (CV = EV -AC). Prepare hierarchical status reports for each level of management-from work package manager to customer or project manager. The reports should also include project rollups by organization unit and deliverables. In addition, actual time performance should be checked against the project network schedule.
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