INF 337 Week 3 Assignment – Article Review

Article Review

INF 337 Intergrated Cost & Schedule Control

Article Review

Earned value management (EVM) are techniques used in project management to monitor, control, and measure the schedule, the costs and the performance of a projects progress objectively for the duration of the project life cycle. Utilizing this concept compliments budget vs actual cost assigned to a project during a specific period, providing further information with the status of a project. Better and more effective management decisions are made which minimize impacts, thus creating project value. The value of the work accomplished at the cost rate set out in the original budget; it is only through earned value that the full nature of the association between the three-success metrics of schedule, cost, and performance can be understood in relation to each other (Venkataraman & Pinto, 2008). For this paper, I will compare and contrast EVM practices based on the two assigned articles that provide insight for a project’s success. To understand the relevance of EVM and keep project cost control, one needs to understand planned value (PV) which is the budgeted cost for work scheduled; earned value (EV), the budgeted cost for work performed and actual cost (AC), the actual cost of work performed—and by monitoring these key elements EVM can not only predict project outcomes, but prevent possible project failure (Venktaraman & Pinto, 2008).

Both articles focus on the importance of EVM elements, conveying that actively managing project costs, the overall health of a project’s performance, time and budget all compliment mitigating risks. With standardized best practices in EVM such as scope, planning, scheduling and assets, the risk of overrun in direct/indirect costs are reduced. In one article, Terascale and EVMS succeeded because risks were managed, stating that earned value is itself was a way of mitigating risk, and those tools were a high priority (Visitacion, 2007). With best practices in place and followed in compliance with the same, they are highly effective tools in project management in the realm of predicting problems early on and assisting in getting projects back on the right track (Visitacion, 2007).

In both articles I found the recommendation of work breakdown structure (WBS), control accounts and work packages be automated, utilizing software tools to track variances to control projects more effectively and efficiently. EVM is scalable, and all projects can benefit their effective use (Visitacion, 2007). EVM objectives consists of organization, planning, scheduling, budgeting, accounting, analyzing, managing, adjusting, and improving decision making. This creates value within the project, boosting reputation with vendors and customers. Furthermore, this also prevents scope creep, improve communication and reducing risk which increases profitability.

The common stigma is that with the use of EVM, a project will always be on track and on time, which is not the truth. It has proved essential in steering projects towards success. Although this method can pinpoint gaps in project health by providing indicators of when components fall off, it should not be regarded as a cure-all (Visitacion, 2007). Another myth is that EVM mechanisms used are distinct for project management practices. In truth, for EVM to be successful, organizations need to incorporate practices with transparency of reporting systems. In the interest of looking good for the boss, or due to implicit or even explicit pressure from project managers themselves, the tendency to downplay serious cost problems can arise (Venkataraman & Pinto, 2008).

When EVM is managed properly, decision making improves the planning process, creating a clear work of scope. The technological integration for scheduling and performance, control and other areas help pinpoint early warning signs and areas of concerns, so management can adjust accordingly, staying on track. It is clear that EVM is not a foolproof concept, however it’s a critical tool for gauging and forecasting the overall health of a project.

References

Venkataraman, R., & Pinto, J. (2008). Cost and value management in projects. Retrieved from

https://redshelf.com/

Visitacion, M. (2007, October). Exemplary EVM at Lawrence Livermore Labs. Contract Management, 47(10), 75-77. Retrieved from ProQuest Database. 

Visitacion, M. (2007, September). Debunking commonly held EVM myths. Contract Management, 47(9), 51-52. Retrieved from ProQuest Database