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1 Project Environment
1-1 Project Management Overview
1-2 Project Life Cycle
1-3 Organizational Structures
1-4 Project Governance
1-5 Project Management Office (PMO)
1-6 Project Management Methodologies
1-7 Project Management Software
1-8 Roles and Responsibilities
1-9 Stakeholder Management
2 Project Initiation
2-1 Project Charter
2-2 Business Case
2-3 Project Selection Methods
2-4 Project Vision and Scope
2-5 Stakeholder Identification and Analysis
2-6 Project Governance and Control
2-7 Project Constraints and Assumptions
2-8 Risk Management Planning
3 Project Planning
3-1 Scope Management
3-2 Work Breakdown Structure (WBS)
3-3 Schedule Management
3-4 Resource Management
3-5 Budget Management
3-6 Risk Management
3-7 Communication Management
3-8 Quality Management
3-9 Procurement Management
3-10 Change Management
3-11 Project Plan Development
4 Project Execution
4-1 Team Building and Leadership
4-2 Communication Management
4-3 Quality Management
4-4 Risk Management
4-5 Change Management
4-6 Procurement Management
4-7 Project Monitoring and Control
4-8 Issue Management
5 Project Monitoring and Controlling
5-1 Performance Measurement
5-2 Earned Value Management (EVM)
5-3 Variance Analysis
5-4 Trend Analysis
5-5 Risk Monitoring and Control
5-6 Change Management
5-7 Issue Management
5-8 Communication Management
5-9 Quality Control
6 Project Closing
6-1 Project Closure Process
6-2 Final Project Documentation
6-3 Lessons Learned
6-4 Stakeholder Satisfaction
6-5 Contract Closure
6-6 Financial Closure
6-7 Project Archiving
7 Professional Responsibility
7-1 Ethics and Professional Conduct
7-2 Project Management Certifications
7-3 Continuing Education and Professional Development
7-4 Legal and Regulatory Considerations
7-5 Cultural Awareness and Diversity
7-6 Sustainability and Social Responsibility
Earned Value Management (EVM) Explained

Earned Value Management (EVM) Explained

Earned Value Management (EVM) is a project management technique that integrates scope, time, and cost to assess project performance and progress. EVM provides a comprehensive view of whether a project is on track, ahead of schedule, or behind schedule, and whether it is under budget or over budget.

Key Concepts

Detailed Explanation

Planned Value (PV)

Planned Value (PV) represents the budgeted amount for the work scheduled to be completed by a specific time. It is also known as the Budgeted Cost of Work Scheduled (BCWS). PV helps in understanding what the project should have accomplished by a certain point in time.

Example: If a project is scheduled to complete 40% of its work by the end of the first month, and the total project budget is $100,000, then PV = 40% of $100,000 = $40,000.

Earned Value (EV)

Earned Value (EV) represents the budgeted amount for the work actually completed by a specific time. It is also known as the Budgeted Cost of Work Performed (BCWP). EV helps in understanding the actual progress of the project in terms of budgeted value.

Example: If by the end of the first month, the project has actually completed 30% of its work, then EV = 30% of $100,000 = $30,000.

Actual Cost (AC)

Actual Cost (AC) represents the actual cost incurred for the work completed by a specific time. It is also known as the Actual Cost of Work Performed (ACWP). AC helps in understanding the actual expenditure of the project.

Example: If by the end of the first month, the project has spent $35,000, then AC = $35,000.

Schedule Variance (SV)

Schedule Variance (SV) is the difference between the earned value (EV) and the planned value (PV). SV helps in understanding whether the project is ahead of, on, or behind schedule.

Formula: SV = EV - PV

Example: Using the previous examples, SV = $30,000 - $40,000 = -$10,000. A negative SV indicates the project is behind schedule.

Cost Variance (CV)

Cost Variance (CV) is the difference between the earned value (EV) and the actual cost (AC). CV helps in understanding whether the project is under budget, on budget, or over budget.

Formula: CV = EV - AC

Example: Using the previous examples, CV = $30,000 - $35,000 = -$5,000. A negative CV indicates the project is over budget.

Schedule Performance Index (SPI)

Schedule Performance Index (SPI) is a measure of schedule efficiency, calculated as EV divided by PV. SPI helps in understanding the project's progress relative to the planned schedule.

Formula: SPI = EV / PV

Example: Using the previous examples, SPI = $30,000 / $40,000 = 0.75. An SPI less than 1 indicates the project is behind schedule.

Cost Performance Index (CPI)

Cost Performance Index (CPI) is a measure of cost efficiency, calculated as EV divided by AC. CPI helps in understanding the project's cost efficiency.

Formula: CPI = EV / AC

Example: Using the previous examples, CPI = $30,000 / $35,000 = 0.86. A CPI less than 1 indicates the project is over budget.

Examples and Analogies

Consider a project to build a house. Planned Value (PV) would be the budgeted amount for the work scheduled to be completed by a specific time, such as the foundation and framing. Earned Value (EV) would be the budgeted amount for the work actually completed, such as only the foundation. Actual Cost (AC) would be the actual cost incurred for the completed work. Schedule Variance (SV) would indicate whether the house is ahead of, on, or behind schedule. Cost Variance (CV) would indicate whether the project is under budget, on budget, or over budget. Schedule Performance Index (SPI) and Cost Performance Index (CPI) would provide efficiency measures for the project's schedule and cost, respectively.

Understanding Earned Value Management (EVM) helps project managers assess project performance and make informed decisions to keep the project on track and within budget.

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