Understanding Budgeted Cost of Work Scheduled (BCWS) in Project Management

In project management, having a solid grasp of your project’s schedule performance is crucial. Budgeted Cost of Work Scheduled (BCWS) is a pivotal scheduling metric that allows project managers to track a project’s progress against the planned schedule.

This article will provide a comprehensive look at what exactly BCWS means, how to calculate it, and how it is used to monitor and control projects. Read on to gain a clear understanding of this important project management concept.

What is Budgeted Cost of Work Scheduled (BCWS)?

Budgeted Cost of Work Scheduled, commonly abbreviated as BCWS, refers to the approved budgeted cost of work that was scheduled to be completed by a certain point in the project timeline. It is also sometimes called the Planned Value (PV).

Essentially, BCWS represents the value of work that was planned to be finished as per the project schedule up to the status date. It measures the physical progress of the project.

BCWS forms a crucial component of Earned Value Management (EVM) allowing project managers to compare planned schedule performance versus actual schedule performance. It is used along with other EVM metrics like Actual Cost (AC) and Earned Value (EV) to monitor project health.

Understanding BCWS is invaluable for project success, since it indicates whether the project is on track, ahead of, or behind the planned schedule targets.

How to Calculate BCWS

The BCWS calculation uses two key pieces of information:

• Budget at Completion (BAC) – The total approved budget for completing the project
• Planned % Complete – The percentage of work planned to be completed by the status date

The formula to calculate BCWS is:

BCWS = (Planned % Complete) x (Budget at Completion)

For example, say a project has a total budget of $500,000. As per plan, the project was scheduled to be 25% completed by the end of Month 1.

The BCWS for this project at the end of Month 1 would be:

BCWS = (25%) x ($500000) = $125000

This means that as per the initial schedule, the team should have completed $125,000 worth of work by Month 1.

Using BCWS to Understand Schedule Performance

The true value of BCWS comes from comparing it against the Earned Value (EV) metric, which represents the actual work completed by the status date.

By comparing BCWS and EV, project managers can determine schedule variance and schedule performance index to understand whether the project is on track or behind schedule.

Schedule Variance (SV) measures the difference between BCWS and EV in dollar amounts, indicating whether the project is ahead or behind the planned schedule.

SV = EV – BCWS

Positive SV means the project is ahead of schedule. Negative SV indicates the project is behind schedule.

Schedule Performance Index (SPI) is the ratio of EV to BCWS. An SPI value of less than 1 indicates the project is behind schedule.

SPI = EV / BCWS

For example, if at end of Month 1:

• BCWS = $125,000
• EV = $100,000

Then:

• SV = $100,000 – $125,000 = -$25,000
• SPI = $100,000 / $125,000 = 0.8

This means the project is $25,000 behind the planned schedule and the execution is at 80% of the planned rate.

Key Benefits of Tracking BCWS

Here are some major benefits project managers can gain by tracking BCWS:

• Monitor schedule performance – Comparing BCWS to EV highlights schedule deviations quickly so corrective actions can be taken in a timely manner.

• Forecast schedule at completion – EVM metrics like BCWS enable accurate forecasts of the project finish date.

• Identify schedule risks – Significant variances between BCWS and EV can signal potential schedule risks.

• Assess contractor performance – Tracking a contractor’s BCWS provides insight into their ability to deliver work as planned.

• Inform scheduling decisions – Understanding the gap between BCWS and EV helps make better scheduling choices.

• Early warning indicator – Changes between planned and actual schedule give an early warning for proactive course correction.

Calculating BCWS at Summary and Detailed Levels

BCWS can be calculated at varying levels depending on the project manager’s needs:

Summary Level BCWS

Calculating total BCWS for the entire project based on % complete. Best for high-level tracking.

Intermediate Level BCWS

BCWS is calculated separately for each phase, stage or work package, then aggregated. Provides greater visibility than summary level.

Detailed Level BCWS

BCWS is calculated at the control account or work package level all the way to the smallest project activities. Allows most granular tracking and control.

Project managers can use a combination of BCWS reporting at different levels depending on the project size, complexity and requirements.

Best Practices for Managing BCWS

To leverage BCWS effectively for schedule control, project managers should follow these best practices:

• Establish BCWS targets during planning based on the scheduled work.
• Monitor BCWS at least monthly, if not weekly or bi-weekly.
• Communicate BCWS delays proactively to stakeholders.
• Analyze the drivers behind BCWS and EV deviations.
• Use BCWS trends to forecast realistic completion timelines.
• Update schedules to counteract negative BCWS variances.
• Request backup data for BCWS figures reported by contractors.
• Combine BCWS analysis with schedule risk management.

Limitations of BCWS to Note

While BCWS is invaluable for schedule management, project managers should note a few limitations:

• BCWS is a snapshot metric – relies on periodic reporting rather than real-time tracking.
• Accuracy depends heavily on the quality of the project plan and baseline.
• Does not account for quality of work completed.
• Can mask issues if total BCWS is on track even if tasks are delayed.
• Requires time and effort for detailed data collection and analysis.

Despite these limitations, BCWS remains among the most useful EVM metrics for planning and controlling project schedules.

Key Takeaways on BCWS

• Budgeted Cost of Work Scheduled (BCWS) represents the budgeted cost of work planned to be completed by a certain status date as per the schedule.
• It is a vital metric under Earned Value Management that allows tracking planned schedule performance versus actual performance.
• Comparing BCWS against Earned Value reveals whether the project is on track, ahead of, or behind schedule.
• BCWS offers deep insights into a project’s schedule health to take corrective actions when delays arise.
• For reliable BCWS data, project managers should follow best practices around planning, monitoring, analysis and communication.