Earned Value Management (EVM) is a methodical project administration process used to identify variances in project cost and schedule. This article discusses the benefits, weaknesses, and recommendations for implementing EVM.
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1EARNED VALUE MANAGEMENT Executive Summary Earned Value Management (EVM) is value of piece of the project work which is equal to the amount of the budgeted funds to complete the project plan. EVM is based on three key principles such as planned value, earned value and actual costs. Planned value is the accepted budget for the scheduled project effort to complete in scheduled time. Earned value is the accepted budget for work finished in particular project date. Actual cost is the rate which is involved for work concluded in scheduled time period. The findings of this report are to get real time overview of the centralized project related information so that the project manager can complete the project work on schedule time period. It tracks the project on real time basis for analyzing causes of the problems and solutions to scheduling problems. The disadvantage of EVM is that it only checks whether the project is on time and in budget, but it will not check for the quality of the work, therefore it is shown as a problem. It is found that there is involvement of constant supervision on the project plan result in involvement of management more into the project. It creates rift among the management team as well as project team members cause disruptions into the project relations. It is recommended that to improve the communication methods so that they can discuss the project problems with each otherโs and provide solution on time. There is a recommendation to perform benchmarking as well as analytics assessments so that proper project related information are to be taken on time.
2EARNED VALUE MANAGEMENT 1. Earned value management (EVM) Based on the perspective of the project management, Earned Value Management (EVM) is a process which helps the plan manager to calculate the presentation of the development plan. It is a methodical project administration processes which are used to identify the variances into the project based on the evaluation of the job performed as well as work intended. EVM method is used on controlling the project cost as well as timetable and it is also a useful way to forecast the project. As per the case study, there is development of a new product into the company known as LAZRTRIM (LAZRTRIM Case Study, 2018). It is used of laser technology for cutting the grass. 2. Benefits of EVM EVM would benefit the executive team by providing them extra information as compared to normal the project tracking. It helps them to calculate the successful completion of the project plan. Value added approaches can help the project manager to achieve greater visibility as well as control over the project management activities that help to respond to the project management issues (Fleming & Koppelman, 2016). It makes the project manager possible to meet with the development deadlines. As the project manager, they have to deal with the project constraints as well as handle them efficiently. Therefore, it is required to monitor status of the project on real time based with respect to the project constraints. Throughout the project lifecycle, it helps to deliver earlier signals about the project issues which are occurred (Webb, 2017). EVM assist in monitoring as well as controlling processes where it causes a difference between the predictable project baseline as well as definite development performance.
3EARNED VALUE MANAGEMENT 3. Weaknesses of EVM While performing the earned value analysis, it provides effects on the quality of the development schedule and cost management plan. It is not possible that the project is scoring higher on the earned value performance scale while superiority is low. As quality is the main project criteria, therefore when it is low then it is not taken in EVM calculation. Into the earned value management, the manager takes the planned value as the project baseline by means of calculations and predictions. While doing the predictions, there is always an uncertainty involved which is a critical factor to determine the project completion time (Willems & Vanhoucke, 2015). The project is on schedule when EVM is performed, as the risks which are not visible are getting delayed at later project stages. In case of a big project, time needed to collect relevant data pertaining to the actual cost is time consuming, therefore it takes more time to calculate it and therefore there is possibility of project delays. 4. Change management The change management should require addressing in the project plan as it included procedure to handle the project scope as well as change in schedule and cost variances. The changes requests are evaluated and review as well as approval process for the project changes are included (Batselier & Vanhoucke, 2015). 5. Recommendations It is recommended that if project EVM method is not implemented, then there are potential concerns related to schedule and cost management. It is recommended that the
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4EARNED VALUE MANAGEMENT organization should adopt EVM into the organization so that the manager can predict the price risks. By means of EVM method, cost performance index is calculated for forecasting the final cost so that the project manager can predict the cost overrun in the project.
5EARNED VALUE MANAGEMENT References Batselier, J., & Vanhoucke, M. (2015). Evaluation of deterministic state-of-the-art forecasting approachesforprojectdurationbasedonearnedvaluemanagement.International Journal of Project Management,33(7), 1588-1596. Fleming, Q. W., & Koppelman, J. M. (2016, December). Earned value project management. Project Management Institute. LAZRTRIM Case Study (2018). Webb, A. (2017).Using earned value: a project manager's guide. Routledge. Willems, L. L., & Vanhoucke, M. (2015). Classification of articles and journals on project controlandearnedvaluemanagement.InternationalJournalofProject Management,33(7), 1610-1634.