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Basically, earned value management or EVM helps an organization to better measure the performance of the progress of a project. As a result, it produces important insight to the organization. Basically, earned value management system can offer valid benefits such as integration of schedule, work, and cost, as well as early warning signs and index-based technique to predict the final cost of a project.
The first benefit of EVM system is to ensure that the authorized task and other related resources are usually integrated through a work breakdown structure that is product oriented. As a result, the organization is able to coordinate and organize the contributions of every area of the project to ensure the schedule, the work, and the cost are well-integrated.
The other advantage is that the systems help in managing and reporting information or data across the different systems through an efficient and effective way. On the other hand, these systems allows more time to do analysis. Also, EVMS assists in managing through exception, which is important in helping the management to focus on the critical areas. As a result, overload of information is prevented, and the risk of overlooking other things is also avoided.
On the other hand, the EVM systems assist in making better decisions. This is because analysis on historical project data can be conducted. However, this is especially possible for those organizations that are able to keep consistent reporting on many projects over the years. When both the successful and the failed decision in the past projects are analyzed, an organization gets more insight concerning the future projects.
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.
EVM systems also assist in calculation of the schedule performance index, SPI. This is got by division of earned value by planned value. The SPI facilitates identification of schedule problems especially alongside critical path information.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
On the other hand, the EVMS helps to relate the cost, the schedule, and the technical performance. Also, the system offer a timely, auditable, and valid information for an active project management action and analysis. The managers also get a level of practical summarization to make the decisions effectively. Due to the many benefits of EVMS it becomes clearly evident that there is so much value in using these systems.
The first benefit of EVM system is to ensure that the authorized task and other related resources are usually integrated through a work breakdown structure that is product oriented. As a result, the organization is able to coordinate and organize the contributions of every area of the project to ensure the schedule, the work, and the cost are well-integrated.
The other advantage is that the systems help in managing and reporting information or data across the different systems through an efficient and effective way. On the other hand, these systems allows more time to do analysis. Also, EVMS assists in managing through exception, which is important in helping the management to focus on the critical areas. As a result, overload of information is prevented, and the risk of overlooking other things is also avoided.
On the other hand, the EVM systems assist in making better decisions. This is because analysis on historical project data can be conducted. However, this is especially possible for those organizations that are able to keep consistent reporting on many projects over the years. When both the successful and the failed decision in the past projects are analyzed, an organization gets more insight concerning the future projects.
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.
EVM systems also assist in calculation of the schedule performance index, SPI. This is got by division of earned value by planned value. The SPI facilitates identification of schedule problems especially alongside critical path information.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
On the other hand, the EVMS helps to relate the cost, the schedule, and the technical performance. Also, the system offer a timely, auditable, and valid information for an active project management action and analysis. The managers also get a level of practical summarization to make the decisions effectively. Due to the many benefits of EVMS it becomes clearly evident that there is so much value in using these systems.
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