Earned Value Management
Best practices for Project Management
Earned value management is a program management technique that integrates cost, schedule, and technical performance to improve overall project management performance while reducing risk. This white paper explores the state of project management and the challenges in adopting Earned Value Management today. It then discusses how aerospace and defense organizations can leverage the Earned Value Management framework and fundamentals to establish project management best practices and further continuing maturity.
Three dimensions of Earned Value Management
Earned Value Management operates on the principle that at any point during a project, its status has three dimensions:
• Planned value: The work scheduled for a given point in the project and the budget earmarked for that work
• Earned value: The work actually accomplished in terms of the budget for that work
• Actual cost: The total amount spent on the completed work
These three values—planned, earned, and actual—enable program managers to determine the true performance of a program or one of its projects. Clarifying the difference between planned value and earned value reveals schedule progress; clarifying the difference between earned value and actual costs reveals the cost status of the reported work. A project team must clearly define three things to create the best-possible opportunity to achieve positive Earned Value Management:
• Technology: Also known as scope of the project. Clear definition of technical scope is a prerequisite for successful Earned Value Management implementation.
• Schedule: The dates planned for completion of the project activities and milestones, which has a direct relationship to the resources, and ultimately, the cost of the project.
• Cost: The estimated cost of delivering the products or services that make up the program.
The Earned Value Management System guidelines incorporate best enterprise practices for program management systems which have proven to help provide strong benefits with regard to program or enterprise preparing as well as manage. The procedures consist of integration of plan scope, schedule, as well as expense targets, establishment of a baseline strategy for achievement connected with plan goals, as well as use of earned value techniques for overall performance measurement during the execution associated with a plan. The system offers a sound basis for problem identification, corrective actions, and also management re-planning as necessary.
Discover more about Earned Value Management @ www.projectsanalytics.com!