Basically, earned value management or EVM helps an organization to better measure the performance of the progress of a project. As a result, it produces important insight to the organization. Basically, earned value management system can offer valid benefits such as integration of schedule, work, and cost, as well as early warning signs and index-based technique to predict the final cost of a project.
The advantages of EVM system entail for one ensuring that a specific project encompasses all the specific resources and that the project is broken down in a manner that focuses on the final product. This helps the firm organize all the tasks handled by each sector that is tackling the project so as to make sure the time factor, the money spent and how the work is done is all in great order.
The second benefit is that this system helps to manage and report data across different systems in an effective and efficient way. This is because the EVM provides a central source of data which result in an easier and a faster reporting cycle. At the same time, there is more time for analysis. Again, EVMS helps to manage by exception, which helps the management to concentrate on the critical issues. As a result, information overload is prevented, as well as the risk of overlooking on other things.
Again, the EVMS systems help to arrive at better decisions. The reasons for this is that analysis on the historical project data may be conducted. Nevertheless, this is usually possible especially in the organizations that maintain consistent reports on different projects over several years. If both the successful, as well as the failed decisions of the past projects can be analyzed, the organization receives more insight about the future projects.
On the same note, it gets easier to determine the cost and the timetable variance once the work gets to 10% completion at any point of the project. Due to this, one can predict how the projects will progress and what the results will be even during the initial stages. For instance, if the cost performance index known as CPI is calculated and appears to be above 1 then it means the projects is on the right track in terms of the budget.
Again, EVM systems help to calculate the schedule performance index or SPI, which is obtained by dividing the earned value by planned value. The schedule performance index helps to identify schedule problems, especially if used together with critical path information. Since the schedule problems are usually resolved through additional spending, a poor SPI would predict future cost problems.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
Finally, the EVMs assists in relation of the cost, the technical performance, and the schedule. The system provides necessary and crucial information on active reports on projects in terms of their management action and analysis. The managers are able to get practical skills that facilitate decision making. All these advantages go a long way in showing the value of these systems.
The advantages of EVM system entail for one ensuring that a specific project encompasses all the specific resources and that the project is broken down in a manner that focuses on the final product. This helps the firm organize all the tasks handled by each sector that is tackling the project so as to make sure the time factor, the money spent and how the work is done is all in great order.
The second benefit is that this system helps to manage and report data across different systems in an effective and efficient way. This is because the EVM provides a central source of data which result in an easier and a faster reporting cycle. At the same time, there is more time for analysis. Again, EVMS helps to manage by exception, which helps the management to concentrate on the critical issues. As a result, information overload is prevented, as well as the risk of overlooking on other things.
Again, the EVMS systems help to arrive at better decisions. The reasons for this is that analysis on the historical project data may be conducted. Nevertheless, this is usually possible especially in the organizations that maintain consistent reports on different projects over several years. If both the successful, as well as the failed decisions of the past projects can be analyzed, the organization receives more insight about the future projects.
On the same note, it gets easier to determine the cost and the timetable variance once the work gets to 10% completion at any point of the project. Due to this, one can predict how the projects will progress and what the results will be even during the initial stages. For instance, if the cost performance index known as CPI is calculated and appears to be above 1 then it means the projects is on the right track in terms of the budget.
Again, EVM systems help to calculate the schedule performance index or SPI, which is obtained by dividing the earned value by planned value. The schedule performance index helps to identify schedule problems, especially if used together with critical path information. Since the schedule problems are usually resolved through additional spending, a poor SPI would predict future cost problems.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
Finally, the EVMs assists in relation of the cost, the technical performance, and the schedule. The system provides necessary and crucial information on active reports on projects in terms of their management action and analysis. The managers are able to get practical skills that facilitate decision making. All these advantages go a long way in showing the value of these systems.
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