Project Management Assignment 2

Topics: Project management, Earned value management, Management Pages: 6 (1937 words) Published: April 21, 2015
MEEN40310: Project Management
Continuous Assessment Assignment 2

The Contribution of Earned Value Management to Project Success on Contracted Efforts (Marshall, 2007): A Critical Analysis

by
Dylan Nolan: 14205683
13th April 2015

“I declare that the material contained in this project is the end result of my own work and that due acknowledgment has been given in the bibliography to ALL sources, be they printed, electronic or personal”

1 Table of Contents

1Table of Contents2
2Introduction3
3Summary of Academic Paper4
4Critical Analysis5
5Conclusion8
6Bibliography9

2 Introduction
“Earned Value Management. A methodology that combines scope, schedule, and resource management to assess project performance and progress” (PMI, Project Management Institute, 2013). Earned Value Management (EVM) is widely used methodology pioneered by the U.S. Military in the 1960’s. It is now used widespread in industries such as manufacturing, pharmaceutical and high the industries (Larson & Gray, 2014). It is an all encompassing management system that enables the complete scoping of a project at contract stage, monitoring and control processes during rollout, and progress reporting and identification of cost / time overruns. The purpose of this report is to review a recent paper that took the previous qualitative research on the subject of EVM and created a statistical test to prove the benefits of the management system quantitatively. In my report I will first provide a summary of that paper, capturing it’s main points and results. Secondly I will then critically assess the methods used to come to the conclusions and how the results reflect the actual benefits of EVM in industry. Finally I will conclude my review with my own opinion of the research and of EVM in general, and also put forward the approach I believe would best be applied in my own organization.

3 Summary of Academic Paper
This paper takes a quantitative approach to proving the positive benefits of EVM application to project success. The author begins by introducing the existing theory of the Earned Value and the positive value it adds to a project. He then quotes previous research, all qualitative, that proves these benefits. The purpose of the paper is to add a quantitative hypothesis test to the existing qualitative theory. This is done by testing projects that use EVM and investigating them under three headings… 1. Investigate the direct relationship of the principles of EVM to project success on contracted efforts 2. Investigate the moderating effect contract type may have on the relationship 3. Investigate between-group differences (fixed-price versus cost-plus contract arrangements) with respect to the contribution of EVM mechanics to project procurement management items This is tested using three test variables…

1. Principles of EVM: How the seven principles of EVM (ANSI/ EIA-748-A-1998) are applied 2. Procurement management: The author has created a list of 18 items relating to contract formation and contract success to measure against 3. Project success: How successful the project is measured using the four principles of project success (Shenhar, Levy, and Dvir 1997) In order to prove the hypothesis, the author created a voluntary survey of project managers for which he received 145 respondents. The results of the survey published proved that the application of EVM techniques had a very favorable effect, 22.47%, on the success of projects. It also showed that EVM had an increased positive effect on fixed price contracts over cost plus, 34% vs 16%. Finally, the conclusion of the article was to corroborate the initial hypothesis that EVM has a positive effect on a project, which backs up previous qualitative research in the area. 4 Critical Analysis

This article concludes that the use of EVM in both the planning and monitoring of a project is beneficial to the overall...

Bibliography: Fleming, Q. W., & Koppelman, J. M. (1997). Earned value project management. Cost Engineering , 39 (2), 13-15.
Kopp, C. (2011, June). ‘Fixed price’ versus ‘cost plus’ Defence contracting. Retrieved April 5, 2015 from Australian Air Power: http://www.ausairpower.net/PDF-A/DT-Procurement-Jun-2011.pdf
Larson, E. W., & Gray, C. F. (2014). Project Management: The Managerial Process (6th ed.). New York: McGraw- Hill.
Lukas, J. A. (2008). Earned Value Analysis – Why it Doesn 't Work. Retrieved April 6, 2015 from International Cost Engineering Council (ICEC): http://www.icoste.org/LukasPaper.pdf
Marshall, R. A. (2007). The Contribution of Earned Value Management to Project Success on Contracted Efforts. Journal of Contract Management , Summer.
PMI, Project Management Institute. (2013). Project Management Body of Knowledge (PMBOK Guide) (5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.
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