The Advantages Of Earned Value Management System
Basically, earned value management or EVM helps an organization to better measure the performance of the progress of a project. As a result, it produces important insight to the organization. Basically, earned value management system can offer valid benefits such as integration of schedule, work, and cost, as well as early warning signs and index-based technique to predict the final cost of a project.
The advantages of EVM system entail for one ensuring that a specific project encompasses all the specific resources and that the project is broken down in a manner that focuses on the final product. This helps the firm organize all the tasks handled by each sector that is tackling the project so as to make sure the time factor, the money spent and how the work is done is all in great order.
Another advantage is that this system ensures that data that needs to be passed across is done so effectively and efficiently. This is due to the fact that EVM ensures that there is a central source of the data hence making the distribution faster and easier. In addition, it provides more time for analyzing and in conjunction the firm is able to focus on crucial issues since EVM assists in management. This helps reduce information clutter or ignoring some issues.
On the other hand, the EVM systems assist in making better decisions. This is because analysis on historical project data can be conducted. However, this is especially possible for those organizations that are able to keep consistent reporting on many projects over the years. When both the successful and the failed decision in the past projects are analyzed, an organization gets more insight concerning the future projects.
These systems also make it possible to measure the cost and schedule variance even with just 10% of work completion in any portion of a project. As a result, the project performance and the productivity can be seen in the early stages of a project. When CPI or cost performance index is measured and is found to be more than 1, it is an indication that the project performance is better against the budget.
EVM systems also assist in calculation of the schedule performance index, SPI. This is got by division of earned value by planned value. The SPI facilitates identification of schedule problems especially alongside critical path information.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
Finally, the EVMs assists in relation of the cost, the technical performance, and the schedule. The system provides necessary and crucial information on active reports on projects in terms of their management action and analysis. The managers are able to get practical skills that facilitate decision making. All these advantages go a long way in showing the value of these systems.
The advantages of EVM system entail for one ensuring that a specific project encompasses all the specific resources and that the project is broken down in a manner that focuses on the final product. This helps the firm organize all the tasks handled by each sector that is tackling the project so as to make sure the time factor, the money spent and how the work is done is all in great order.
Another advantage is that this system ensures that data that needs to be passed across is done so effectively and efficiently. This is due to the fact that EVM ensures that there is a central source of the data hence making the distribution faster and easier. In addition, it provides more time for analyzing and in conjunction the firm is able to focus on crucial issues since EVM assists in management. This helps reduce information clutter or ignoring some issues.
On the other hand, the EVM systems assist in making better decisions. This is because analysis on historical project data can be conducted. However, this is especially possible for those organizations that are able to keep consistent reporting on many projects over the years. When both the successful and the failed decision in the past projects are analyzed, an organization gets more insight concerning the future projects.
These systems also make it possible to measure the cost and schedule variance even with just 10% of work completion in any portion of a project. As a result, the project performance and the productivity can be seen in the early stages of a project. When CPI or cost performance index is measured and is found to be more than 1, it is an indication that the project performance is better against the budget.
EVM systems also assist in calculation of the schedule performance index, SPI. This is got by division of earned value by planned value. The SPI facilitates identification of schedule problems especially alongside critical path information.
Basically, the objective of the EVMS is to relate budgets to the contract work, as well as the statements of work. These systems are also intended to provide a way of capturing assessments of the work in progress against the plan.
Finally, the EVMs assists in relation of the cost, the technical performance, and the schedule. The system provides necessary and crucial information on active reports on projects in terms of their management action and analysis. The managers are able to get practical skills that facilitate decision making. All these advantages go a long way in showing the value of these systems.
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