The purpose of this paper is to provide a general idea of Earned Value Management (EVM). Only conveying a basic understanding of a tool that allows both government and contractor to visualize the technical, cost, schedule planning, performance, and progress of a contract, an agreement or promise to do work, which is enforceable by law…
It compares the work finished with the estimates made at the beginning of the project, which gives a measure of how far the project is from being finished. Inferring from the amount of work already put into the project, a project manager can get reasonable prediction as to how much resources the project will have used at completion.
EVM was used in the 1800s as industrial engineers looked for ways to measure performance in factories. The United Stated Department of Defense (DOD), in the 1960s, employed the Cost/Schedule Control System Criteria (C/SCSC) which is now referred to as the Earned Value Management System (EVMS), a recognized function of program management, which ensures that technical, cost, schedule, and aspects of a contract are truly integrated. The DOD used the C/SCSC cost system simply because their contractors ran over budget, lag behind schedule, had no ability to guesstimate an acceptable cause-effect relationship of how cost, schedule or scope impacted multiple and simultaneous projects. As a result, the government requested that contractors were no longer permitted to forecast costs by subtracting project actual costs from the original budget. With the EVMS, which includes organized components of the project's schedule, budget estimate and scope of work, project's forecast costs at completion of project are more accurately determined (Warhoe, 2004).
However, after nearly four decades, EVM clearly has not achieved its actual or perceived potential. Of the innumerable projects, less than 1% use the EVM application. One reason suggested in literature for the low usage of EVM and procurement is the contract type selection bias toward cost-reimbursable (CR) contracts. Literature review addressing EVM and procurement, indicate that there are mixed beliefs on contract type selection (Marshall, 2005).
Conventional use of EVM with CR contracts, were limited to large United States government departments such as the National Aeronautics and Space Administration (NASA). Today NASA employs EVM to support President Bush's Management Agenda specifically to improve competitive sourcing by providing better historical performance data; to enhance financial performance by helping measurement of performance against the budget; and to advance NASA budget and performance integration by integrating management of technical requirements, schedule, and budget risks.
In contrast, many project practitioners, experts and literature reviews argue in support of using fixed price (FP) contracts. Kelvin Yu described how EVM was effectively used with a FP contract to renovate a wind tunnel operated by NASA. For instance, Yu utilized EVM in defining the project scope, developing negotiating tools such as "should cost estimate", and directing and integrating the actual work of multiple contractors working on a project. Quentin Fleming and Joel Koppleman agree because both have noted the efficiency and effectiveness of EVM with FP contracts. Authors are suggesting the use EVM with FP contracts and provide sound rationale for their beliefs and claims. They made a good case for continuous use of FP (Marshall, 2005).
For those such as Karen Evans, an Office of Management and Budget (OMB) Administrator of e-government and Information Technology, who testified last spring before the House Government Reform Committee, EVM has not been of much service. Her complaint ...
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A project is a group of tasks or activities that requires effort to accomplish. Management is “systematic process of systematic process of planning, organizing, leading, and controlling” (Zee, 2002, p.18). Therefore, in project management, the group of tasks ate managed in a systematic way for successfully accomplishing.
The scope of the project usually increases when new product or new features has been added to the current projects without corresponding addition in resources, time and budget; and as a result of the undesired changes in the project scope, the team drifts away from its original objective and scope into unintended additions (“Project scope management”).
Name Date Professor’s Name Course Section/# Table of Contents: Introduction Discussion of Theory Specific Case Example Summary Introduction: Project management is a difficult term to encapsulate in a short definition. However, for purposes of this brief response, the researcher will consider and define project management as having to do with planning, envisioning, organizing, motivating and controlling resources in order to bring about change.
Therefore, in project management, the group of tasks ate managed in a systematic way for successfully accomplishing. The financial aspect in a project management is one of the most critical areas that should be managed very carefully is systematic way.
There are ups and downs and possibly many vicissitudes before any result is achieved (Wirick, 7). In such a scenario it becomes important to monitor the progress of the project and make corrections whenever necessary.
If there is no proper application of the earned value management then most probably there will be many loopholes left in the project and the results will be less than desired. The earned value management objectifies the analysis of a project by incorporating scope, cost and
It is usually used in planning, execution and control factors related to the project to determine efficiencies and value of the project and its activities.
EVMS shows status in several different ways. It illustrates the planned value of a project along with the actual
As a result, project cost management is more challenging than usual for most information technology projects. The projects initial and final costs might differ largely with the latter being more than anticipated. IT projects are