Information Systems Project Management
Definition
Larson & Gray (2011) define the Earned Value as the planned and budgeted cost of the work performed. In other words, dealing with the earned value is a tool for monitoring the progress of the project by measuring the value delivered contrasted with the original planning. Managing the Earned Value also allows the Project Manager to predict problems related with the performance of the project.
Understanding the relationship between the development of the project and time is important to establish realistic parameters for measurement (one of EVM objectives). Wysocki (2013) states that these parameters determine schedule and cost modifications for the in-progress period as well as for the accumulative period. The value of work is measured in dollars.
Furthermore, Williams (2008) outlines three indicators to evaluate the progress of the project through EVM: scope delivery, the percentage time passed versus time planned and the budget used to date. This way, the project management triad (time, scope and cost) is evaluated. Williams also recommends measuring costs (in relation to the budget) based on the percentage of the value invested set against the required work to be completed.
Benefits
All in all, taking advantage of Earned Value Management allows the Project Manager to spot delays that are already occurring by identifying tendencies so he can react accordingly: shutting them down or reschedule tasks (Larson & Gray, 2011). Correspondingly, EVM also helps keeping track of the estimated costs, comparing them to the necessary goals and making sure these requirements are met: it forces the company to actually create a list and plan of costs that must be checked accordingly. This is done by providing an approachable agenda for the work done. Finally, EVM reflects all of its data to the personnel, facilitating decision making into the work environment (Wysocki, 2013). He also states that EVM is intuitive and can be easily accommodated within the project life cycle, making implementation not become an additional problem, but a true solution for the manager.
References
Larson, E. W., & Gray, C. F. (2011). Project management: The managerial process (5th ed.). (146-251)
Wysocki, R. K. (2013). Effective Project Management: Traditional; Agile; Extreme; 7th Edition. Wiley.
Williams, M. (2008). The Principles of Project Management. SitePoint.
Appendix A
Baseline Gantt Chart. Larson & Gray (2011)
Appendix B
Baseline versus actual cost curve illustrating cost variance. Wysocki (2013).
