Earned Value Management and Its Importance to Cost Control - Assignment Example

Assignment, Management 1. Cost Describe EVM and its importance to cost control Earned Value Management (EVM) is a tool used by executives and officials to manage projects. Currently, EVM has become an essential element in managing programs and procurements. Organizations and individuals using EVM are able to quickly respond to emerging issues such as cost and have total control of resources within. It is imperative to note that EVM assesses a project by incorporating the criteria of cost, value and time. Information obtained from EVM is useful in determining the efficiency of budgeted money to estimated cost of the project. Furthermore, EVM increases customers’ confidence in the management of the organization’s project. EVM and the health of this project Formula Formula Values Formula Results Interpretation of results CV = EV-AC $100000-$90000 $10000 SV = EV-PV $100000-$120000 -$20000 CPI = EV÷AC $100000÷$90000 1.11 SPI = EV÷PV $100000÷ $120000 0.8 EAC = BAC÷CPI $200000÷1.11 $180180 The project is cost effective since it runs on a lower price than the budgeted money. BAC = $200000 Project total cost Estimated time to completion =Projectduration ÷SPI 6÷0.8 7.2 The project is roughly remains behind schedule by. Overally, the project is performing well as it is cost effective and easily managed. 2. Quality Define quality Quality is the ability of a project to provide goods and services that meet the stipulated objectives1. The services and goods should be of benefit to the consumers and improve their standards of living. Describe the cost of quality and the benefit of quality management Cost of quality is financial tool that includes all sums of costs in projects and used to access the quality performance of a project or organization2. It is imperious for the project to develop a cost of quality to help in improving and analyzing quality management. Quality management enables the project to access its products and services and produce high-quality goods and services that are superior to the competitors. Moreover, customer loyalty and satisfaction depends on the project’s quality management. therefore, the project manager should ensure that the products meet the expectations of the customers. In addition, quality management ensures increased productivity of the project as more profits are realized that further help in project management. Quality standards to use for this project # Quality Standard Description Related Business Expectation/ Requirement 1 Environment friendly The services should aim at conserving the environment and minimizing pollution. 2 Quality standards Services provided to the customers should of high quality. 3 Affordability Recreational services provided should be of affordable price to consumers. 4 Maximum profits The project should aim at obtaining maximum profits to improve the living standards of the staff. 3. HR RACI Chart Task/ Deliverable* Resource 1 (enter resource type and name; e.g.; PM or Tony Prince) Resource 2 Resource 3 … add columns as needed for additional necessary or known resources… Project manager Tony Prince Labor Equipment and material Network specialist Patrick Computer Data Consumers Business analyst Nancy Business statistics. Stakeholders Partners Programmer Bonnie Computers Website Writing materials programmer John Computers Website Writing materials Aspiring project manager Cecilia Labor Equipment Financial manager me Capital Human resource The project manager runs the whole project ensuring that it is successful while the assistant manager assists the manager in delegation of duties. Network analyst is responsible for telecommunication equipment and configuration of all systems in the project. Business analyst provides ways of running the project on a cost effective way. Programmers design the programs for running the project and develop a system for interpretation of the results. Financial manager allocates budget to every work done in the project 4. Communication Issues Lack of proper communication is the major issue affecting the project, as some members are too much vocal that other people cannot air their opinions. Unequal distribution of resources to the departments involved in the research leads to conflict among the team members and poor performance. Moreover, external factors such as negative comments on the services from consumers affect the working of the project. Poor planning may further affect the project completion as it may delay thereby increasing the cost of project management. Recommendations It is essential for manager of the project to develop a proper communication system ensure smooth running of the project as each person can express their opinions. The project should further ensure production of high quality products and services to help maintain the customers. In addition, managers should adapt fair distribution of resources and a good management plan stipulated to ensure effective management. 5. Risk Risk register for this project Risk Name(1) Description (2) Category (3) Root Cause (4) Triggers(5) Strategy(6) Economic risks This is when the economic state of the country does not favor the project. Staffing Increase in cost of production inflation Money should be set aside to manage economic risks that may affect the project. Reduction in the number of tourists The provided low quality of services by management leads to a low turnout of tourists. Staffing Not meeting the expectations of the customer Poor supervision and poor security states. The management should ensure proper supervision for delivery of quality services. Labor risks Membership withdrawal from the project without any notice. Manager Overworking Poor salary Manger should develop proper ways of maintaining the staff. Financial crisis The project running Financial manager Inadequate capital Poor planning Proper financial management to ensure cost effective project Poor communication Failure of the staff to provide relevant status information Staffing Lack of confidence on project management. Fear of unknown Provision of high quality products to fulfill the needs of the customers Conflicts Lack of understanding among the staff Staffing Unequal distribution of resources Favorism Manager should ensure peace and correlation among members. 6. Procurement Summary and lessons learnt. It is imperative for a project to develop a project procurement that indicates the products or services a project would provide to the community3. Project procurement provides a platform for the project to stipulate the possible risks the project might face. The project manager implements the work plan of the project and is a member of the committee that forms the project procurement. Work cited Dhawan, Sanjeev. 2015. Cost of Quality (COQ). TQM School. Web. April 20, 2015. Retrieved from http://www.tqmschool.com/articles/TQM%20-%20Cost%20of%20Quality.pdf Pinto, J. K., &Venkataraman, R. R. (2013).Cost and value management in projects. Hoboken, N.J: Wiley. Yeow, J., & Edler, J. (2012). Innovation Procurement as Projects. Journal of Public Procurement, 12(4), 472-504 Read More