The ultimate goal of any project is that it meets its schedule deadlines, accomplishes its requirements and comes in within budget. In September 2009, a study showed that failed information technology projects alone cost worldwide businesses and agencies $6.2 trillion per year. While there is no system that can guarantee that your project will succeed, Earned Value Management (EVM) can give your project a better chance for success. Lexem Strategy uses EVM as a core competency in delivering better project management solutions.
Benefits of EVM:
1. An Integrated System – Perhaps the biggest benefit to implementing EVM is that it is a single integrated system that can track the project in terms of work, time and money; Project managers do not have to learn multiple systems. EVM can measure the amount of work actually completed; forecast the cost and completion date; compare the actual performance of the project versus the plan; and track the project’s budget in real time.
2. Continuous Project Health Assessments – Project Health Assessment is an examination used in EVM of what caused a difference between the projected baseline and the actual performance. This can be measured on three different levels: current, cumulative and forecast. The process for determining project health depends on many factors including cost, schedule and technical performance standards. The metrics uncovered in these assessment periods can show you how far away the project is from its original plan and can also help track down the root of the problem.
3. Use of Key Performance Indicators – The schedule performance index (SPI) and the cost performance index (CPI) are both advantageous tools in EVM. These metrics can help determine the current status of the project, be early warning signals if the project goes off track and estimate the total cost and time frame. The SPI measures all of the work completed on the project and calculate whether the project will meet, beat or miss its planned finish date. The CPI is considered by most project managers to be the most valuable EVM metric. This measures cost efficiency for the work completed. Simply put, it can tell you if your project is under or over budget at any point during the process.
4. Flexibility – When the results of the metrics used in EVM show that changes are needed, the project manager can adjust the work or budget to help bring the future performance of the project back in line with projections. The metrics can also pinpoint where any troubles are within the project. The project manager can then take preventive efforts to reduce the possibility of those troubles occurring again. Most importantly, EVM allows for these changes to be made in a flexible, timely manner at any point during the project’s development and implementation.