Performance Factors Beyond EVM Discussion Essay
1) DISCUSSION POST
Your Project Sponsor is not familiar with earned value management (EVM). You have been asked to provide him with a quick overview of EVM. Using the information covered in the readings, suggest the top three (3) EVM performance measures you would educate your Project Sponsor on. Also, identify other performance factors beyond EVM that you would communicate to your sponsor. Provide a rationale for your selection of topics
2) PEER REVIEW #1 (Jessica)
Earned value management metrics refers to the metrics which companies and project managers apply to establish their projects’ earned value as they are getting carried out so that they can measure performance and eventually deliver on budget and on time. The entire EVM metrics are crucial since they combine to offer a more inclusive outline of project health than traditional accounting oriented measures which tend to track projects one-dimensionally, for instance, the amount spent vs. what got budgeted. In contrast to this, EVM metrics provide teams and project managers tighter and reliable controls over budget (cost) and time schedule (time) which implies better decisions may get made and projects may be better controlled.
The three critical and main EVM performance measures that I would educate my Project Sponsor on are planned value, earned value, and actual cost. Planned value (PV) gets calculated at the start of a project, and it is the total project budget or total planned value. For instance, in case a project budget to construct a house is $500,000, then the project’s total planned value is $500,000. Planned value tends to set the baseline the schedule performance, implying that if project managers stay on the trail with the planned value, they are on line to deliver on time.
Actual cost (AC) refers to the actual cost that gets sustained on a project so far. In case a project tends to have been running for four months and cost $100,000, then the actual costs (AC) are naturally $100,000. The other metric is earned value (EV). The metric allows project managers to view the amount of value or cost that has been generated or earned on the project or venture so far. For instance, a project that is 50% complete with a BAC (budget at completion) of $500,000 will have a $250,000 earned value.
The other performance factor beyond EVM that I would communicate to my sponsor is productivity. This measure looks at the general capabilities of an organization – how well it utilizes its resources. Besides, productivity demonstrates the relationship between outputs and inputs.
3) PEER REVIEW #2(Amber)
Hello Class – To get my project sponsor familiar with the earned value management (EMV), I would start with reviewing EMV and what it does. I will let them know EMV is a project management program developed by the American Department of Defense in the 1960’s. EMV uses metrics that measure performance of a project that helps with making needed corrective actions. Informing them that this program helps to control the time and cost of the project.
You should always have a full understanding of your projects time-line and the costs associated with what’s been done thus far and the costs for completing the project in full. I think the Planned Value (PV), Earned Value (EV), and Actual Costs (AC) are the top three metrics I would suggest to educate my project sponsor on. PV provides the baseline for tracking project performance in EMV. Planned Value = Planned Revenue. EV represents the revenue a project earns as work is performed and miles stones are achieved. Earned Value = Earned Revenue. And finally, AC is the retail value cost the project incurs as work is done. Actual Cost = Actual Effort.