Earned Value Management (Essay Sample)

Earned Value Management Name: Course: Tutor: Date: Introduction Earned Value Management, commonly known by the acronym EVM is a methodical project management process employed to ascertain variations in projects based on the assessment of work performed along with work planned (Menze, 2013). It enables managers to measure the extent of project performance thus keeping them informed of the entire project progress in terms of forecasts and problems encountered. In this regard, this paper seeks to establish a critical analysis of the Earned Value Management. Earned Value Management Measures EVM consists of both primary as well as derived data elements whereby each data point consists of the time an Earned Value Management test is carried out on the project (Raby, 2000). However, for purposes of this paper, focus will be laid on primary data elements, since are critical points in the measurement of Earned Value (EV). In this regard, primary data points consist of the following elements: Budget at Completion (BAC) referring to the cost incurred in the entire project. Planned Value (PV) referring to the amount of work executed as per the program plan in terms of pounds or hours. In this case, PV=BAC × percentage of planned work. Earned Value (EV) referring to the amount of actual work performed in terms of pounds or hours. Therefore, EV=BAC × percentage of actual work. Actual Cost (AC) referring to the sum of all costs accrued for a given task to date. As indicated by the aforementioned measures, Earned Value Management fundamentally analyses the scope, time, and the cost incurred throughout the entire project life cycle. In other words, EVM ensures that the organization works beyond the triple constraint. Moreover, Earned Value Management is pivotal in the assessment of project performance in terms of speed, accuracy, and volume. Benefits of Earned Value Management EVM enables project managers to spot cost and schedule tribulations and take appropriate remedy for the problems quickly. It also presents the organization with a clear picture of how sound the project is, and the kind of improvement initiatives needed (Suzuki, Suzuki, & Takasaki, 2008). In review, EMV has the following benefits: Relates time phased costs to statements of work. Provides a rationale to monitor work progress against the baseline plan. Relates technical, cost, and schedule performance. Provides timely, valid, and auditable information for proactive action of management Supplies the management with practical and useful decision making tool. Increased contractor visibility and control over the project development. Increased customer confidence on in the ability of the contractor. Enhances accountability through effective project tracking and prevention of scope creep. Reduces risks and gives profitability analysis. Failures associated with Poor Earned Value Management In the event of a poor EVM, mischievous issues are likely to arise. These problems may range from just simple failures to severe problems that may even bring the organization into looming extinction (Kim & Reinschmidt, 2011). Some of the setbacks that may arise include; [1] poor project management leading to system failures, [2] ...