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Earned Value Management - Coursework Example

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The paper presents the importance and use of earned value management for analyzing and assessing the planning, scheduling, costing, budgeting, evaluating and performance monitoring of a project. The complexities in the post-modern organization have increased due to a number of reasons…
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Earned Value Management
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Download file to see previous pages An organization including profit-making or non-profit making performs a number of tasks. Each group of tasks has a certain specific goal and this group of tasks can be termed as ‘project’. Organisations get themselves engaged in multiple projects to achieve common and overall goals and objectives. Therefore, successful completion of the project is very vital for the organisational success and project management has evolved as a key process in business-related activities. With the increasing pressure of the workloads, project management is gaining recognition in all types of the organization including SMEs and multinational enterprises. In simple terms, project management can be defined as “the task of managing work” (Cooke and Tate, 2005, p.1).

In the case of business management, a project can involve any type of tasks e.g. product development; implementing new machines or systems in operation for increasing efficiency; or marketing promotions and advertisement. Generally, project management can be completed through a set of five sequential processes. These five processes are initiation, planning, execution, controlling and closure (Choudhuri, n.d. p.3). However, in each process, there are various tasks that strive to support each of the aspects and criterions in the course of project management. Cost management, risk and quality management, budgeting, operational management, scheduling, etc are the example of these tasks. The above-sated tasks can also be termed as project management knowledge that includes nine areas and each of them is crucial for effective project management. These nine areas also include certain tasks and these areas are explained in the following chart.

In the previous section, the tasks involved in project management have been discussed, and each of these tasks is critical having a direct influence on profitability and organisational growth. If the project management team is able to complete these tasks efficiently, they are able to meet the goal of a project. In the course of these tasks, maintenance of efficient, accuracy, and reliability are key factors for success. Hence, for completing these tasks, it necessitates a proper systematic and integrated approach, and earned value management (EVM) strives to fulfill this requirement. The concept of EVM is not too old and its historical background of EVM can be traced during the mid of 1960 in the United States. United States defense system used to implement the process of EVM for complex programs by focusing on the cost and schedule controlling system. Later, it evolved with time and became one of the most widely accepted tools for the best practices in the industry (USAID, 2006).

However, many scholars and academics argued that the origins of earned value can be found since the late Industrial Revolution and it was to be an integral part of scientific management. Basically, the manufacturing companies used to manage by the engineers rather than the businessmen during that period. These engineers used this EVM for making the comparison between the planned costs against the actual cost of a project of investment made for manufacturing activities (Stevens and Association for Project Management, 2002, p.319). At present, the EVM can be defined as a “project control tool for comparing the achieved value of work in progress against the project schedule and budget” (Basu, 2008, p.8). ...Download file to see next pagesRead More
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