Earned Value Management
Predicting the Future Performance of Projects
Earned Value is the most comprehensive trend analysis technique available to project managers. Using trend data it is possible to forecast cost or schedule overruns at an early stage in a project.
As any seasoned project manager knows, projects can be technical and challenging and even the most organised of project managers will run into some problems along the way. Adding to the complexity of project demands is the fact that many organisations are facing increasingly difficult market or trading conditions, so now more than ever the requirement for planning and control around management of projects is critical. A re-occurring theme that project managers face is the management of their projects' performance and any project's performance can be diminished due to cost overruns and time delays.
Many information technology projects have been declared too costly, too late and often don't work right. Applying appropriate technical and management techniques can significantly improve the current situation. The principal causes of growth on these large-scale programmes can be traced to several causes related to overzealous advocacy, immature technology, lack of corporate technology road maps, requirements instability, ineffective acquisition strategy, unrealistic programme baselines, inadequate systems engineering, and work-force issues. This article provides a brief summary of four processes to resolve these issues.
After decades of using and teaching Earned Value Management techniques, we have seen a lot of misinformation about Earned Value, and the advent of the Internet has only made the problem worse. The fact is, the Earned Value Management techniques laid out almost 40 years ago continues to be one of the best ways to manage almost any project, and should be a key part of any Project Manager's toolkit. With that in mind, we set out to "bust" seven of the most common myths about Earned Value Management.
Earned Value (EV) is a management tool for tracking and communicating a project's status. Earned Value Management (EVM) will let you know the actual state of the project by comparing your current project performance against your plan. Knowing the project's performance will let you take actions needed to ensure that the project is completed on time and within budget. Like any tool, in order for EVM to be successful, it very important that it is used correctly.
The goal of this article is to encourage project managers to participate in an academic survey to help determine if an organisation is ready to apply earned value management to its projects. If you are interested in providing input into an assessment tool to help determine if an organisation is ready to apply earned value, please read on!
Current performance is the best indicator of future performance and therefore using trend data it is possible to forecast cost or schedule overruns at quite an early stage in a project. The most comprehensive trend analysis technique is the Earned Value method.
Earned Value Management (EVM) helps project managers to measure project performance. It is a systematic project management process used to find variances in projects based on the comparison of worked performed and work planned. EVM is used on the cost and schedule control and can be very useful in project forecasting. The project baseline is an essential component of EVM and serves as a reference point for all EVM related activities. EVM provides quantitative data for project decision making.
Earned value (EV) is one of the most sophisticated and accurate methods for measuring and controlling project schedules and budgets. Earned value has been used extensively in large projects, especially in government projects. PMI is a strong supporter of the earned value approach because of its ability to accurately monitor the schedule and cost variances for complex projects.
The term "Earned Value" is gaining in popularity around project management circles as if it is some wonderful new concept to be embraced. Yet, it has been in use since the 1960s when the Department of Defence adopted it as a standard method of measuring project performance. Today, it is both embraced and shunned, often in response to prior experience or stories told "in the hallway." The opponents will generally cite the cost and effort to make it work, and the limited benefit derived from its implementation. The proponents will cite the cost savings to the project overall, the improved analysis, communication and control derived from its implementation. No doubt, the two camps have vastly different experiences to formulate their perceptions.