A Practical Guide to Earned Value Project Management, Second Edition


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Earned Value Management

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PMBOK 6: Earned Value Management Analysis in simple language

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Payment details. Payment methods. If needed estimates can be corrected based on current earned value trends. These re-estimated values of schedule, scope, and cost would replace the originals and become the new baselines for the project. Based on the earned value analysis result, management can also take an early call to secure reserves for any further contingency in the project.

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Thus, EVA communicates a lot about project health and performance. However, EVA alone can not correct the project performance. Based on EVA results, the project manager has to identify the root cause of the issue and address the same to reform the performance. You may also like: Project Scope, Why is it Important? Before understanding the earned value calculation it is advisable to understand WBS first. Based on project scope, the complete project work can be broken down into micro levels.

This technique of breaking down the work into different work elements or components is known as decomposition. It looks very similar to organizational hierarchical structure. WBS can be decomposed to the smallest level, called as work package. Work package hence resides on the lowest WBS level, where manageable activity with schedule and cost can be easily and logically defined. The overall project work scope tallies with the cumulative sum of all WBS components with the bottom-up approach. This gives a complete idea of project plan — scope, schedule, and budget.

Hence, with each WBS component, schedule and cost are associated. Refer to figure 1. Next column shows the time duration planned for each task. Next two columns show the planned cost and actual cost associated with each task or activity in WBS. Planned cost is assigned based on the authorized project budget. Thus, it assigns a cost value for each planned work element. The summation of this planned cost is the authorized budget for the project.

The cumulative values of the planned cost over the planned work generate performance measurement baseline PMB. Above are some of the earned value management formulas used in EVA.

Assign an authorized budget to work scheduled with each WBS component. This gives the value of PV. Once PMB is completed, during project planning; start measuring the project performance along scheduled work.

See a Problem?

Conclude the results — a If SPI is less than 1. For example, if SPI is 0. For example, if CPI is 0. Also, project completion estimates can be calculated based on the current performance. Estimate at Completion EAC is the right measurement to do this. If nothing can be done to recoup project performance, a better approach is to check for project viability.

If the project does not seem viable, close the project.


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A Practical Guide to Earned Value Project Management, Second Edition A Practical Guide to Earned Value Project Management, Second Edition
A Practical Guide to Earned Value Project Management, Second Edition A Practical Guide to Earned Value Project Management, Second Edition
A Practical Guide to Earned Value Project Management, Second Edition A Practical Guide to Earned Value Project Management, Second Edition
A Practical Guide to Earned Value Project Management, Second Edition A Practical Guide to Earned Value Project Management, Second Edition
A Practical Guide to Earned Value Project Management, Second Edition A Practical Guide to Earned Value Project Management, Second Edition
A Practical Guide to Earned Value Project Management, Second Edition A Practical Guide to Earned Value Project Management, Second Edition
A Practical Guide to Earned Value Project Management, Second Edition A Practical Guide to Earned Value Project Management, Second Edition

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