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Earned Value Management - Essay Example

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It recognizes costs, scope of project, quality, risk and human resources to determine whether a project is meeting its intended objectives in these…
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Earned Value Management
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RUNNING HEADER: Earned Value Management System Earned Value Management System BY YOU YOUR SCHOOL INFO HERE HERE Earned Value Management System The EVMS (Earned Value Management System) is designed to create a window of realistic and legitimate aspects of project management. It recognizes costs, scope of project, quality, risk and human resources to determine whether a project is meeting its intended objectives in these areas. It is usually used in planning, execution and control factors related to the project to determine efficiencies and value of the project and its activities.
EVMS shows status in several different ways. It illustrates the planned value of a project along with the actual costs to determine status, or earned value, of the actual investment (Project Management Institute, 2005). The most vital component of EVMS is recognizing the real time investment occurring within the project compared to planned value and actual cost. This will illustrate whether the project is exceeding costs and whether it is behind schedule.
It is important to recognize that PV is also considered the Budgeted Cost of Work Scheduled, which is imperative for determining earned value. Projects have technical performance aspects (progress) that is related to budget and should be assessed in comparison to actual costs incurred. Planned budget of $180,000 with an actual cost of $200,000 would, without EVMS, be $20,000 over budget. However, EVMS might illustrate that the technical progress started earlier than expected, thus the project is now ahead of schedule and might be more apt to meet PV budget. This is why EVMS is linked directly to cost and performance.
My view is that EVMS is a more practical assessment of a project since it takes more into consideration than just costs. It recognizes expert progress based against time schedules, to make a more accurate assessment of project value or potential losses. It is a viable tool for assessing
projects because it takes time and talent into consideration (Goodpasture, 2004) along with recognition of costs, something needed for strategic project management in order to gain a broader picture of whether the project is meeting its intended budget and progress expectations.
References
Goodpasture, J.C. (2004). Quantitative Methods in Project Management. J. Ross Publishers
pp.172-178.
Project Management Institute. (2005). “Practice Standard for Earned Value Management”.
Retrieved August 21, 2012 from http://www.cflhd.gov/resources/pm/documents/PMHandbook/PMHBLinks/e%20Budgeting/Earned%20Value%20Analysis/EarnedValueMgmt.pdf Read More
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