156 Glossary
3. DEFINITIONS
Actual Cost (AC). The realized cost incurred for the work performed on an activity during a specific time period. This
can be reported for cumulative to date or for a specific reporting period.
Actual Time (AT). The number of time periods from the start of the project to the project status date.
Apportioned Effort (AE). The effort applied to project work that is not readily divisible into discrete efforts for that
work, but which is related in direct proportion to measurable discrete work efforts. The value for the apportioned effort
is determined based on the earned value of the corresponding discrete activity.
Budget at Completion (BAC). The sum of all the budgets established for the work to be performed on a project, work
breakdown structure (WBS) component, control account (CA), or work package (WP). The project BAC is the sum of
all work package BACs.
Change Control Board (CCB). A formally chartered group responsible for reviewing, evaluating, approving, delaying,
or rejecting changes to the project, and for recording and communicating such decisions.
Control Account (CA). A management control point where scope, budget, actual cost, and schedule are integrated
and compared to earned value for performance measurement. Each control account may be further decomposed into
work packages and/or planning packages.
Control Account Manager. The manager within the project’s organizational breakdown structure (OBS) that has been
given the authority and responsibility to manage one or more control accounts.
Cost Performance Index (CPI). A measure of the cost efficiency of budgeted resources expressed as the ratio of
earned value to actual cost: CPI = EV/AC.
Cost Variance (CV). The amount of budget deficit or surplus at a given point in time. It is the difference between
earned value (EV) and actual cost (AC). CV = EV − AC. A positive value indicates a favorable condition and a negative
value indicates an unfavorable condition.
Cumulative Velocity. The summation of the velocities for all completed iterations at a point in time. Cumulative
velocity represents the earned value of the planned backlog achieved.
Discrete Effort. A work effort that can be planned and measured and that yields a specific output. Discrete effort
is directly related to specific end products or services with distinct and measurable points, and outputs that result
directly from the discrete effort.
Distributed Budget. The budget for project scope that has been identified to work breakdown structure (WBS) control
accounts and also has an identified control account manager.
157
Earned Schedule (ES). An earned value technique that measures the time at which planned value equals earned value.
Earned Value (EV). The measure of the work performed, expressed in terms of the budget authorized for that work.
Earned Value Management (EVM). A methodology that combines scope, schedule, and resource measurements to
assess project performance and progress.
Enterprise Environmental Factors (EEF). Conditions, not under the immediate control of the team, that influence,
constrain, or direct the project, program, or portfolio.
Estimate at Completion (EAC). The expected total cost of completing all work expressed as the sum of the actual
cost to date (AC) and the estimate to complete (ETC): EAC = AC + ETC.
Estimate at Completion (time) (EAC
t
). The expected total time of completing project work. EAC
t
is equal to the actual
time (AT) plus the estimate to complete (time) (ETC
t
) for the remaining work: EAC
t
= AT + ETC
t
.
Estimate to Complete (ETC). The estimated cost of completing the remaining work.
Independent Estimate at Completion (IEAC). A mathematical or statistical approach to project an EAC or a range of
EACs using EVM data. These EAC calculations are independent of any future project or environmental conditions, and
are not a replacement for a derived (bottom-up) project EAC.
Independent Estimate at Completion (time) (IEAC
t
). A mathematical or statistical approach to calculate a project
duration or range of durations using EVM data. Using earned schedule, the IEAC
t
is equal to the planned duration
divided by SPI
t
.
Independent Estimate to Complete (IETC). A mathematical or statistical approach to calculate a project completion
date or range of completion dates using EVM data. The IETC is equal to the project start date plus the IEAC
t
.
Level of Effort (LOE). A method of measurement used for support-type activities that does not produce definitive end
products that can be delivered or measured objectively.
Organizational Breakdown Structure (OBS). A hierarchical representation of the project organization that illustrates
the relationship between project activities and the organizational units that will perform those activities.
Organizational Process Assets (OPA). Plans, processes, policies, procedures, and knowledge bases that are specific
to and used by the performing organization.
Performance Measurement Baseline (PMB). An approved, integrated scope-schedule-cost plan for the project work
against which project execution is compared to measure and manage performance. The PMB includes contingency
reserve (CR), but excludes management reserve (MR).
Planned Value (PV). The authorized budget assigned to scheduled work.
158 Glossary
Planning Package. The work and budget that have been identified to a control account but are not yet defined into
work packages.
Project Management Information System (PMIS). An information system consisting of the tools and techniques
used to gather, integrate, and disseminate the outputs of project management processes.
Project Management Office (PMO). A management structure that standardizes the project-related governance
processes and facilitates the sharing of resources, methodologies, tools, and techniques.
Responsibility Assignment Matrix (RAM). A structure that integrates the project organizational breakdown structure
(OBS) with the work breakdown structure (WBS) to identify the control accounts.
Root Cause Analysis (RCA). An analytical technique used to determine the basic underlying reason(s) that causes a
variance or a defect or a risk. A root cause may underlie more than one variance or defect or risk.
Schedule at Completion (SAC). The total schedule duration established to complete the entire work scope.
Schedule Performance Index (SPI). A measure of schedule efficiency expressed as the ratio of progress achieved
to date as measured by the earned value (EV) to the planned progress expressed as planned value to date (PV):
SPI = EV/PV.
Schedule Variance (SV). A measure of schedule performance on a project, expressed as the difference between
earned value (EV) and planned value (PV): SV = EV − PV.
Summary-Level Budget. A time-phased budget for far-term work that is yet to mature to a level that can be
reasonably planned and allocated to control accounts.
To-Complete Cost Performance Index (TCPI). A measure of the cost performance that must be achieved with
the remaining resources in order to meet a specified management goal, such as the EAC or the BAC, expressed as:
TCPI = (BAC − EV) / (EAC − AC).
To-Complete Schedule Performance Index (TSPI). The calculated projection of schedule performance that must be
achieved on remaining work to meet a specified goal, such as the EAC
t
, expressed as TSPI = (AC − EV) / (AC − PV).
Undistributed Budget (UB). The budget for project scope that has not yet been identified to work breakdown structure
(WBS) elements and, below those, to control accounts. This budget has yet to be distributed to a responsible control
account manager for detailed planning and time phasing.
Variance at Completion (VAC). A projection of the amount of budget deficit or surplus, expressed as the difference
between the budget at completion (BAC) and the estimate at completion (EAC): VAC = BAC − EAC.
159
Variance Threshold. A predetermined range of normal outcomes that sets the acceptable performance boundaries
within which the team practices management by exception. Generally established for cost variances (CV), schedule
variances (SV), and variances at completion (VAC).
Work Breakdown Structure (WBS). A hierarchical decomposition of the total scope of work to be carried out by the
project team to accomplish the project objectives and create the required deliverables.
Work Breakdown Structure (WBS) Dictionary. A document that provides detailed deliverable, activity, and schedule
information about each component in the work breakdown structure.
Work Package (WP). The work defined at the lowest level of the work breakdown structure (WBS) for which cost and
duration can be estimated and managed. Each work package has a unique scope of work, budget, scheduled start
and completion dates, and may only belong to one control account.
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