The earned value management is essential in measuring project performance and progress. Project managers and controllers have been using it over the decades to ensure there is integration of work, schedule and cost. Through this value management, the managers can identify signals on how the organization is performing on the project.
According to research the earned value management can be useful in integrating resources through work breakdown (Larson & Gray, 2013). In this regard the organization will be able to determine which areas of the project need to be pumped with more resources. This integration would be useful in planning and coming up with schedules and costs. The EVM has also been applauded by project managers and controllers because it provides better decision making opportunity. The managers have the opportunity to conduct analysis on how resources are utilized (Swanson, 2014). For instance if the EVM analysis shows that there is overspending, the manager will have to decide on the most swift way to address the overspending. In this case they might consider eliminating the loopholes in which the money is being spent on.
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The EVM is also significant because one can calculate the cost and schedule variance. This means that the project is closely monitored and the elements of the project can be identified. Such elements include performance and productivity and any factors that might be making them to lag behind. Additionally the cost performance index (CPM) allows calculating the estimated cost at completion and forecasting on the time schedules for the project (Swanson, 2014). In this regard it will provide a chance for the project managers to allocate resources accordingly. It is also possible to come up with weekly and monthly schedule and costs, this allows the project managers to be in control. Lastly the earned value management system allows in evaluating financial goal s and estimate the level of performance of the project.
References
Larson, E. W., & Gray, C. (2013). Project Management: The Managerial Process with MS Project . McGraw-Hill.
Swanson, S. (2014, June). Anatomy of a highly effective status report (Links to an external site.)Links to an external site. . PMI Network, 28 (6), 52-61. Retrieved from http://www.personal.psu.edu/faculty/j/b/jbm18/302_PM_Materials/Chapter10_Co mmunications%20Mgmt/Ch%2010%20Anatomy%20of%20a%20Highly%20Effec tive%20Status%20Report.pdf
