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The Advantages Of Earned Value Management System

By Matthew Bennett

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.

To begin with, one of the advantages of the EVM systems is to ensure the authorized tasks and the related resources are integrated through a structure of work breakdown which is product-oriented. Because of this, an organization can be able to organize and to coordinate contributions in each area of a project to make sure the work, the cost, and the schedule are well integrated.

The second benefit is that this system helps to manage and report data across different systems in an effective and efficient way. This is because the EVM provides a central source of data which result in an easier and a faster reporting cycle. At the same time, there is more time for analysis. Again, EVMS helps to manage by exception, which helps the management to concentrate on the critical issues. As a result, information overload is prevented, as well as the risk of overlooking on other things.

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.

On the same note, it gets easier to determine the cost and the timetable variance once the work gets to 10% completion at any point of the project. Due to this, one can predict how the projects will progress and what the results will be even during the initial stages. For instance, if the cost performance index known as CPI is calculated and appears to be above 1 then it means the projects is on the right track in terms of the budget.

On the other hand, the EVM systems help in calculating the SPI or the schedule performance index, which is normally obtained when earned value is divided by the planned value. This schedule performance index assists in identifying the schedule problems more so when used with the critical path information. Because schedule problems are resolved by more spending, a bad SPI indicates future cost problems.

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.

EVMS also help in relating the cost, the technical performance, and the schedule. Again, the system provides an auditable, timely, and a valid information to help in an active project management analysis and action. A manager also gets a practical summarization for effective decision making. Because of the many benefits that come with EVMS, there is clear evidence that these systems have so much value.

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