Advantages and Disadvantages of Earned Value Management (EVM) Student Name:
INF337: Integrated Cost & Schedule Control
Instructor: Elliott Lynn
October 6, 2014
The purpose of this paper is to compare and contrast the similarities and differences of earned value management (EVM) and how it could provide the project manager a better chance of having a successful project. When you are assigned as the project manger or any project, your goal is to meet assigned deadlines, accomplish the projects objective and hopefully come in under budget not over budget. The paper will highlight the examples of the real world benefits, as well as, the myths of EVM as it relates to the success of each project.
Advantages and Disadvantages of EVM
One of the main advantages and benefit of earned value management (EVM) process is that it can track and measure the project performance by the amount of work completed, time scheduled and money spent. One of the real-world benefits is that it can track each level of the project from the initial startup which would be considered the baseline until the actual date of completion which would be considered the actual performance. In addition, it will allow the project manger to meet any opposition within the project head on.
Some of the performance measures tools that are used in the earned value management (EVM) that are beneficial to the project success is the scheduled performance index (SPI) and the cost performance index (CPI). In accordance to the text, scheduled performance index (SPI) is the amount of time required to complete the project which is determined by dividing the earned value by the planned value. The cost performance index (CPI) is determined by dividing the earned value by the actual cost (Chapter 5).
Even though the earned value management system has its advantages, it has also has disadvantages as well. Some of the disadvantages lies in the risk and uncertainties in quality and cost. The risk in uncertainties could lead to over incomplete projects, as well as, cost overruns within each phase of the project. In project planning, and the phase of the project, quality is not a measurable factor which is actually a disadvantage because it is not measured within the scope of project completion. Benefits and Myths of EVM
In the articles Exemplary EVM at Lawrence Livermore Labs and Debunking Commonly Held EVM Myths, Margo Visitation writes on the myths and benefits on earned value management (EVM). Both articles focus on the key components of earned value management and the how coupled together can assist organization to be successful by working to eliminate any potential pitfalls.
The use of earned value management (EVM) at Lawrence Livermore National Laboratory was found to be beneficial to the organization. The budget department made it mandatory that all projects were required to track the three components of earned value management: 1) Planned value-where the work scheduled to be completed at a certain time and within budget; 2) Earned value-the amount of work actually completed and the cost to complete it; 3) Actual cost-the total amount spent of the completed work (Visitation, OCT 2007). In this article, the EVM had to adhere to American National Standard Institute standard of EVM “which included the 32 criteria related to planning, scheduling, baselining, analyzing and reporting” (Vistacion, Oct 2007). The benefits of the earned value management (EVM) within this project allowed the project manager to eliminate risk by putting in cost controls. This action allowed the organization to define the linkage between the work breakdown structures (WBS) and time-phased budget which allowed for project success.
The use of earned value management (EVM) in the article of Debunking Commonly Held Myths, address the myths discovered in the employability of EVM. In this article the community was slow to adopt the EVM...
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