EVM performance measurement leads to variances between what was planned & what was done, provides early warning signals to trigger corrective actions.
Microsoft Project Demonstration Project
Shown below is a Microsoft Project demonstration project, which is fully resourced and costed. This project has a schedule duration of 9-weeks and a cost budget of $150. The delivered project and the resulting tracking information, show a final duration of 11-weeks and an actual cost of $210.
Earned Value Management (EVM)
Since this project was delivered 2-weeks behind schedule and $60 over budget, it is interesting to review the project behaviour and variances that result during this time.
Cumulative PV, EV and AC data points are used to build an s-curve.
Performance of a project in progress is assessed using Planned Value (PV), Earned Value (EV), and Actual Cost (AC). Since a project in progress might vary unexpectedly from the baseline schedule estimates, measuring performance is crucial for efficient project control. Time/cost performance measures give a general idea of the project’s health.
Time/Cost performance reports provide a simple and easy to understand bird’s eye view of the project. Such reports used during project progress, facilitate decision-making since they provide a quick overview of the general health of the project, as displayed below by the periodic EVM key time/cost performance metrics.
Time/Cost performance measures are used to predict the project’s final time/cost outcome. Forecasting methods predict the expected project time/cost based on the currently known performance and the expected future performance, which maybe the same, better or worse than that experienced currently.
Time/Cost forecast reports as displayed below are designed to follow-up the performance of a project and to act as a warning signal to take corrective actions in the (near) future. This is because one of the primary tasks of a project manager during project progress is making decisions about the future.
Performance measures obtained during project progress using EVM calculations are used to predict the final time/cost project outcome. The general formulae for these forecasting methods make use of the time and cost data from the past that make estimates about future performance, which provides actionable insight.
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