Basically, earned value management or EVM helps an organization to better measure the performance of the progress of a project. As a result, it produces important insight to the organization. Basically, earned value management system can offer valid benefits such as integration of schedule, work, and cost, as well as early warning signs and index-based technique to predict the final cost of a project.
The first benefit of EVM system is to ensure that the authorized task and other related resources are usually integrated through a work breakdown structure that is product oriented. As a result, the organization is able to coordinate and organize the contributions of every area of the project to ensure the schedule, the work, and the cost are well-integrated.
The other advantage is that the systems help in managing and reporting information or data across the different systems through an efficient and effective way. On the other hand, these systems allows more time to do analysis. Also, EVMS assists in managing through exception, which is important in helping the management to focus on the critical areas. As a result, overload of information is prevented, and the risk of overlooking other things is also avoided.
Again, the EVMS systems help to arrive at better decisions. The reasons for this is that analysis on the historical project data may be conducted. Nevertheless, this is usually possible especially in the organizations that maintain consistent reports on different projects over several years. If both the successful, as well as the failed decisions of the past projects can be analyzed, the organization receives more insight about the future projects.
On the same note, it gets easier to determine the cost and the timetable variance once the work gets to 10% completion at any point of the project. Due to this, one can predict how the projects will progress and what the results will be even during the initial stages. For instance, if the cost performance index known as CPI is calculated and appears to be above 1 then it means the projects is on the right track in terms of the budget.
Again, EVM systems help to calculate the schedule performance index or SPI, which is obtained by dividing the earned value by planned value. The schedule performance index helps to identify schedule problems, especially if used together with critical path information. Since the schedule problems are usually resolved through additional spending, a poor SPI would predict future cost problems.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
On the other hand, the EVMS helps to relate the cost, the schedule, and the technical performance. Also, the system offer a timely, auditable, and valid information for an active project management action and analysis. The managers also get a level of practical summarization to make the decisions effectively. Due to the many benefits of EVMS it becomes clearly evident that there is so much value in using these systems.
The first benefit of EVM system is to ensure that the authorized task and other related resources are usually integrated through a work breakdown structure that is product oriented. As a result, the organization is able to coordinate and organize the contributions of every area of the project to ensure the schedule, the work, and the cost are well-integrated.
The other advantage is that the systems help in managing and reporting information or data across the different systems through an efficient and effective way. On the other hand, these systems allows more time to do analysis. Also, EVMS assists in managing through exception, which is important in helping the management to focus on the critical areas. As a result, overload of information is prevented, and the risk of overlooking other things is also avoided.
Again, the EVMS systems help to arrive at better decisions. The reasons for this is that analysis on the historical project data may be conducted. Nevertheless, this is usually possible especially in the organizations that maintain consistent reports on different projects over several years. If both the successful, as well as the failed decisions of the past projects can be analyzed, the organization receives more insight about the future projects.
On the same note, it gets easier to determine the cost and the timetable variance once the work gets to 10% completion at any point of the project. Due to this, one can predict how the projects will progress and what the results will be even during the initial stages. For instance, if the cost performance index known as CPI is calculated and appears to be above 1 then it means the projects is on the right track in terms of the budget.
Again, EVM systems help to calculate the schedule performance index or SPI, which is obtained by dividing the earned value by planned value. The schedule performance index helps to identify schedule problems, especially if used together with critical path information. Since the schedule problems are usually resolved through additional spending, a poor SPI would predict future cost problems.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
On the other hand, the EVMS helps to relate the cost, the schedule, and the technical performance. Also, the system offer a timely, auditable, and valid information for an active project management action and analysis. The managers also get a level of practical summarization to make the decisions effectively. Due to the many benefits of EVMS it becomes clearly evident that there is so much value in using these systems.
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