Earned value management also known as EVM assists organizations on how to weigh how well a project is doing. This ensures that crucial details are considered by the firm. Earned value management system generally offers advantages like combination of work, cost and schedules together with any danger indicators. This helps determine the total cost incurred in a project.
To begin with, one of the advantages of the EVM systems is to ensure the authorized tasks and the related resources are integrated through a structure of work breakdown which is product-oriented. Because of this, an organization can be able to organize and to coordinate contributions in each area of a project to make sure the work, the cost, and the schedule are well integrated.
The second benefit is that this system helps to manage and report data across different systems in an effective and efficient way. This is because the EVM provides a central source of data which result in an easier and a faster reporting cycle. At the same time, there is more time for analysis. Again, EVMS helps to manage by exception, which helps the management to concentrate on the critical issues. As a result, information overload is prevented, as well as the risk of overlooking on other things.
The third advantage is that it helps in decision making. This is because studies can be carried out on projects handled in past years. Nevertheless, this is only applicable to those firms that have records on projects handled over the years and hence the past projects are looked into and lessons learnt on the successful ones and even the failed projects which then helps future decision making.
These systems also make it possible to measure the cost and schedule variance even with just 10% of work completion in any portion of a project. As a result, the project performance and the productivity can be seen in the early stages of a project. When CPI or cost performance index is measured and is found to be more than 1, it is an indication that the project performance is better against 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.
On the other hand, schedule problems are solved by additional spending hence a poor SPI indicates future cost problems. Basically, the goals of the EVM is to integrate budgets to contract work and statements of work. These systems also provides a method of assessing work done in accordance to the plan.
EVMS also help in relating the cost, the technical performance, and the schedule. Again, the system provides an auditable, timely, and a valid information to help in an active project management analysis and action. A manager also gets a practical summarization for effective decision making. Because of the many benefits that come with EVMS, there is clear evidence that these systems have so much value.
To begin with, one of the advantages of the EVM systems is to ensure the authorized tasks and the related resources are integrated through a structure of work breakdown which is product-oriented. Because of this, an organization can be able to organize and to coordinate contributions in each area of a project to make sure the work, the cost, and the schedule are well integrated.
The second benefit is that this system helps to manage and report data across different systems in an effective and efficient way. This is because the EVM provides a central source of data which result in an easier and a faster reporting cycle. At the same time, there is more time for analysis. Again, EVMS helps to manage by exception, which helps the management to concentrate on the critical issues. As a result, information overload is prevented, as well as the risk of overlooking on other things.
The third advantage is that it helps in decision making. This is because studies can be carried out on projects handled in past years. Nevertheless, this is only applicable to those firms that have records on projects handled over the years and hence the past projects are looked into and lessons learnt on the successful ones and even the failed projects which then helps future decision making.
These systems also make it possible to measure the cost and schedule variance even with just 10% of work completion in any portion of a project. As a result, the project performance and the productivity can be seen in the early stages of a project. When CPI or cost performance index is measured and is found to be more than 1, it is an indication that the project performance is better against 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.
On the other hand, schedule problems are solved by additional spending hence a poor SPI indicates future cost problems. Basically, the goals of the EVM is to integrate budgets to contract work and statements of work. These systems also provides a method of assessing work done in accordance to the plan.
EVMS also help in relating the cost, the technical performance, and the schedule. Again, the system provides an auditable, timely, and a valid information to help in an active project management analysis and action. A manager also gets a practical summarization for effective decision making. Because of the many benefits that come with EVMS, there is clear evidence that these systems have so much value.
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