Project Management

Using EVM as a Performance Management Methodology

As a performance management methodology, EVM adds some critical practices to the project management process. These practices occur primarily in the areas of project planning and control, and are related to the goal of measuring, analyzing, forecasting, and reporting cost and schedule performance data for evaluation and action by workers, managers, and other key stakeholders.

 

In the planning process, the means for assessing physical work progress and assigning budgetary earned value needs to be established. In addition to routine project management planning, earned value measurement techniques are selected and applied for each work task, based on scope, schedule, and cost considerations.

 

In the project execution process, EVM requires the recording of resource utilization (i.e., labor, materials, and the like) for the work performed within each of the work elements included in the project management plan. In other words, actual costs need to be captured in such a way that permits their comparison with the performance measurement baseline.

 

In the project control process, EVM requires that physical work progress be assessed and budgetary earned value be credited (using the selected earned value measurement techniques), as prescribed in the project management plan. With this earned value data, the planned value data from the performance measurement baseline, and the actual cost data from the project cost tracking system, the project team can perform EVM analysis at the control account and other levels of the project work breakdown structure, and report the EVM results as needed.

 

During the project planning process, EVM requires the establishment of a performance measurement baseline (PMB). This requirement amplifies the importance of project planning principles, especially those related to scope, schedule, and cost. EVM elevates the need for project work to be executable and manageable and for the workers and managers to be held responsible and accountable for the project’s performance. Project work needs to be broken down—using a work breakdown structure—into executable tasks and manageable elements often called control accounts. Either an individual or a team needs to manage each of the work elements. All of the work needs to be assigned to the workforce for execution using an organization breakdown

structure (OBS).

 

In the planning process, the means for assessing physical work progress and assigning budgetary earned value also needs to be established. In addition to routine project management planning, earned value measurement techniques are selected and applied for each work task, based on scope, schedule, and cost considerations.

 

In the project execution process, EVM requires the recording of resource utilization (i.e., labor, materials, and the like) for the work performed within each of the work elements included in the project management plan. In other words, actual costs need to be captured in such a way that permits their comparison with the performance measurement baseline.

 

In the project control process, EVM requires that physical work progress be assessed and budgetary earned value be credited (using the selected earned value measurement techniques), as prescribed in the project management plan. With this earned value data, the planned value data from the performance measurement baseline, and the actual cost data from the project cost tracking system, the project team can perform EVM analysis at the control account and other levels of the project work breakdown structure, and report the EVM results as needed.[1]

 

 

 


[1] ©2005 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA 5

 

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October 10, 2008 - Posted by | earned value, Performance Management | , , ,

1 Comment »

  1. Hi Donna,
    If you really want to mentor your IT colleagues, I would urge you to move beyond what PMI offers and look into the much more technically sophisticated certifications offered by AACE. http://www.aacei.org.

    AACE offers the Earned Value Professional (EVP) http://www.aacei.org/certification/EVP/welcome.shtml which I think would make a great follow on certification to your PMP, which most professional practitioners consider nothing more than an entry level credential. (Which is what the PMP was originally designed to be)

    Hope this helps you move forward in your role as mentor….

    BR,
    Dr. PDG, Jakarta, Indonesia

    Thank you for your comment. I will check that site out. I certainly do not believe that the PMP gives you all you need to succeed as a Project Manager, I was doing project management for 20 years before I recieved it. I think job training is the best teacher!

    Comment by Paul D Giammalvo | October 12, 2008 | Reply


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