Earned Value Management System Essay
Earned Value Management System
Earned Value Management System (EVMS) guiding principles incorporate top business practices to give strong benefits for program or enterprise planning and control. The process includes the incorporation of program scope, schedule, and cost objectives, establishment of a baseline plan for success during the execution of a program. The structure provides a solid foundation for problem recognition, corrective actions, and management replanning if required. This system helps program management integrate the work scope of a program with the schedule and cost elements for most favorable program planning and control.
There are three basic elements of earned value management which are: Planned Value (PV) Actual cost (AC) and earned value (EV) each of these elements are used on a standard basis as of a reporting date. Planned value (PV) is the total cost of the work schedule calculated as PV or BCWS=Hourly Rate* Total Hours Planned or Scheduled. Actual cost (AC) is the cost taken to complete the work as of a reporting date calculated as AC or ACWP=Hourly Rate* Total Hours Spent.
Earned value (EV) is the total cost of the work completed/performed as of a reporting date calculated as EV or BCWP=Baseline Cost* % Complete Actual. Some of the principles involved with earned valued management system (EVMS) are as follows: * EVMS information is used in the organization’s management processes. * Create a plan for all work scope in the program– from beginning to end. * Have a structured breakdown of the program work scope into set pieces that can be assigned to a liable person or organization for control of technical, schedule, and cost objectives. Utilize actual costs acquired and documented in accomplishing the work performed.
* Incorporate program work scope, schedule and cost objectives into a performance measurement baseline plan against which accomplishments may be measured. The fundamental nature of earned value management is that, providing a stage of detail appropriates for the amount of technical, schedule, and cost risk or uncertainty connected with the program, a target planned value (i. e budget) is created for each scheduled element of work.
As work is completed, their target planned values are “earned”. Summing up the earned value management system– it is an efficient project management process used to find variances in projects based on the comparison of work accomplished and work planned. The Gold Card is individual-sheet reference that provides definitions of common Earned Value (EV) terminology. It lists EV metric equations, and labels the most common EV graph. It also summarizes the EVM policy and EVM contracting requirements.
At the bottom contact information to the EVM home page is provided. Other elements located on the Gold Card are variances, overall status, DoD metrics, baseline execution index (BEI), estimate at completion number, and complete performance index (TCPI). A structured breakdown of contract prices that branches off all the way down to work packages and planning packages is displayed on the Gold Card. The earned value management Gold Card is a handy reference tool for project managers to use for their own personal use.