W2_Thuraiya_Introduction to Earned Value Concept as a Performance Measurement tool.

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Introduction to Earned Value Concept as a Performance Measurement tool.

1-      Problem Recognition:

As project managers come from diverse backgrounds and different fields they have several methods to manage the projects. However, all projects are driven by the budget and time. Earned Value helps managers to measure the project performance by comparing the actual achieved work in relation to the planned worked. The first implementation of Earned Value Management (EVM) was 1960 by the defense department in USA to measure the performance. Today in US it is mandatory to use EVM in the government entities.

In order to understand the EVM concept this blog will depend on team OPWP PMP data to analyses the team performance.


2-  Identify the Feasible alternative:

The aim of this blog is to determine the Project performance in term of cost and schedule.

EVM Method categories the performance of the project into five categories which are: on budget/ on time, ahead of schedule/ under budget, behind schedule/ under budget, behind schedule/ over budget and ahead schedule/ over budget.



3- Development of the Outcome for Alternative:

project team must prepare a schedule that outlines the tasks, time and resources needed to complete it which is known as the Base-Line Schedule that generate the Base-Line Curve. reflects the planned progress of the project. the planned activities may not be achieved on time that’s why Actual S-curve is generated to reflects the actual progress of the project to date.in order to mitigate the risk of delivering the project late all activities will be worked backward to develop the Late S-Curve. However, there are activities which must be done on the planned time which are the Critical Path activities those activities that must start and finished on time as scheduled to ensure that the project finishes at scheduled time. Any delay in those activities will cause a delay in project. All data will be transferred in term of budget and time to generate curves that measure the Budgeted cost of work Scheduled (BCWS), Budgeted Cost of Work Performed(BCWP) and Actual Cost of Work Performed (ACWP) as the figure below explains:




4-      Selection Criteria:

To determine the performance of the project the following parameters must be calculated:

The figure below shows how the project performance is measured by the above parameters:



5-      Analysis and Comparison of the Alternative:

According to the data obtained from the progress report the CPI and SPI are as follow:

Activities
CPI
SPI
Weekly report
0.96
0.92
paper
0.41
0.19
Blog post
0.92
0.93
problems
0.00
0.00
average
0.8
0.6


6-     Selection of the Preferred Alternative:

In order to recover the lost time, the team must progress more. Also, fast tracking is recommended to mitigate the risk of falling behind the late curve. Another option is to crash the activities which are in the critical path by putting more resources or time. However, this may lead to being over budget.

7-   Performance Monitoring and the Post Evaluation of Result:

The team must measure the progress in weekly basis. All team members must deeply understand the earned value concept to be aware how it will impact the whole team progress.

8-   Performance Monitoring and the Post Evaluation of Result:

1-      Mario Vanhoucke (12/12/2011), Earned Value Management: An overview

http://www.pmknowledgecenter.com/dynamic_scheduling/control/earned-value-management-overview (visited on 15.11.17)
2-      Reichel, Chance W (2006), Earned value management systems (EVMS)
https://www.pmi.org/learning/library/earned-value-management-systems-analysis-8026 (visited on 15.11.17)
3-      Umesh Dwivedi, EARNED VALUE MANAGEMENT EXPLAINED
https://www.projectsmart.co.uk/earned-value-management-explained.php (visited on 15.11.17)

Comments

  1. Dr. PDGNovember 16, 2017 at 10:28 AM

    Good posting Ms. Aiya but I want to caution you about NOT getting in the habit of posting ONLY the early date curve. That is a really BAD HABIT to get into. Why? Because it is not the Early date that really tells us if our project is headed for TROUBLE. The really important curve is the LATE DATE CURVE. As you will probably come to find out in this class, very rarely will you be able to hit the early dates. MOST of the time you will be later than the early dates which is OK as long as you don't start to get close to the LATE DATE curve. That is the "early warning sign" or "risk trigger" that your project is headed for trouble.

    Another important reason for including both the early and late date curves can be seen HERE http://www.planningplanet.com/guild/gpccar/assessing-interpreting-progress-data and look at Figure 17. Maybe in another blog you want to explain why it is important to be able for an OWNER to be able to analyze both how much float the project has as well as how much flexibility there is in how the resources can be allocated?

    Lots of good stuff can be seen when you get in the habit of requiring BOTH the early and Late date curves.

    BR,
    Dr. PDG, Jakarta

    ReplyDelete

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