Understand Earned Value in Under an Hour

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Understand earned
value in under an hour
From Work Breakdown Structureto Performance Measurement BaselineFrom Work Breakdown Structure to Performance Measurement Baseline
AbstractEarned value (EV) has grown in popularity over the last several years. With 76% of IT projects failing (Crawford, 2002), project management and control systems must EV management techniques give project be implemented to ensure IT project success. EV is an essential tool that often is managers notice the minute a project is not not utilized because it is misunderstood. This simplified approach to understand-performing according to plan, allowing organizations to quickly identify problems ing EV is an early indicator and forecaster of project progress. Earned value shows and make informed decisions on how and a three dimensional view of project progress. Learn how EV links to the work where to intervene to prevent failure. breakdown structure (WBS) the schedule and the budget. From this presentation you will see the benefit of implementing an EV methodology on all your projects, starting now!
To fully appreciate EV, you must understand how the performance measurement baseline links to the WBS, the schedule and the budget. If earned value is to be used, it must first be understood. Often the misunderstanding of how EV manage-ment systems are created results in the avoidance of this powerful project man-agement reporting tool. A simple and easy-to-understand approach to EV will be presented to allow you to build upon and master EV techniques.
IntroductionProject control is often a primary focus for the project manager: We strive to con-trol the project plan. The result of the project plan is a tangible outcome that can be quantified and measured. The triple constraint of scope, cost and time must be negotiated to ensure a successful project outcome. Project scope is the foundation of the triple constraint. Often the most neglected of the three, project scope is the foundation of the triple constraint. However, it may also be the most difficult area of the triple constraint to quantify and measure. You'll note that management is notorious for demanding reports on budget and schedule status. (Just think of the last time management inquired about your project scope.) What we do have at our disposal is the work breakdown structure (WBS). Activity-based estimating allows the work duration and cost to be assigned at a detailed level of project execution.
Once the WBS is developed, a schedule can be determined, then cost and duration can be assigned. This allows for the cumulative cost curve to be developed. Then EV can be measured against the rate at which spending is planned. The cumulative cost curve can identify the value at any point during the work schedule - this is called the planned value (PV). We can measure and ascertain the percentage of the work done. We can account for cost - the amount that was actually spent on the work. And with this information we'll be armed with a powerful tool to manage the project - EV.
2 Villanova University | World Leader in Online EducationFrom Work Breakdown Structure to Performance Measurement Baseline
EV has grown in popularity over the last several years. Possibly due to data on IT projects (Phillips, 2002) reported by the Standish Group:
. 31% of projects are canceled before completion. 88% are past deadline, over budget or both. For every 100 starts, there are 94 restartsCompanies around the world have . Average cost overrun is 189%discovered the benefits of using certified . Average time overrun is 222%project management professionals trained in EV management techniques for everything from construction and engineering projects Defining the Scopeto large-scale IT implementations. In The WBSCertMag's 2004 Salary Survey To fully appreciate EV we must understand how the values are developed. First, (www.certmag.com/salaries), respondents start with the WBS. By definition the WBS is "a deliverable-oriented grouping of with PMI certification earned an average of project elements that organize and define the total scope of the project" (PMBOKŠ $89,630, one of the top five average salaries Third Edition, 2004). This, in its most basic explanation, is a list of all the tasks or for certified professionals. activities that must be accomplished to deliver the project. A properly developed WBS is dissected... [download for more]