Earned Value Management System

Topics: Project management, Earned value management, Management Pages: 2 (559 words) Published: May 14, 2013
Erika Thompson
PMB410 Professor Dekker

Earned Value Management System (EVMS) guiding principles incorporate top business practices to give strong benefits for program or enterprise planning and control. The process includes the incorporation of program scope, schedule, and cost objectives, establishment of a baseline plan for success during the execution of a program. The structure provides a solid foundation for problem recognition, corrective actions, and management replanning if required. This system helps program management integrate the work scope of a program with the schedule and cost elements for most favorable program planning and control. There are three basic elements of earned value management which are: Planned Value (PV) Actual cost (AC) and earned value (EV) each of these elements are used on a standard basis as of a reporting date. Planned value (PV) is the total cost of the work schedule calculated as PV or BCWS=Hourly Rate* Total Hours Planned or Scheduled. Actual cost (AC) is the cost taken to complete the work as of a reporting date calculated as AC or ACWP=Hourly Rate* Total Hours Spent. Earned value (EV) is the total cost of the work completed/performed as of a reporting date calculated as EV or BCWP=Baseline Cost* % Complete Actual. Some of the principles involved with earned valued management system (EVMS) are as follows: * EVMS information is used in the organization’s management processes. * Create a plan for all work scope in the program-- from beginning to end. * Have a structured breakdown of the program work scope into set pieces that can be assigned to a liable person or organization for control of technical, schedule, and cost objectives. * Utilize actual costs acquired and documented in accomplishing the work performed. * Incorporate program work scope, schedule and cost objectives into a performance measurement baseline plan against which accomplishments may be measured. The...

References: Dwivedi, U. (n.d.). Earned value management explained.
Retrieved from http://www.projectsmart.co.uk/earned-value-management-explained.html
Gray, C., & Larson, E. (2011). Project management the
managerial process.
(5 ed., p. 505. New York, NY: McGraw-Hill/Irwin.
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