Question

Compare and Contrast Earned Value Management with Financial Management Responsibilities

Answer 1

Earned Value Management pertains to keeping track and advising current status of a project. This would not only include the actual value and status of the project for a defined time period but will also involve cost and time comparison with the originally estimated project cost and timeline.

Primarily three data sources are utilized for Earned Value Management

1. Planned value  

Planned value is directly related to budgeted value and time line. This gives insight of what level or value the project was supposed to be at a defined time line. This includes both physical status as well as cost estimates.

2. Actual cost

Actual cost details the cost incurred for the progress of project at a defined time line.

3. Earned value

This gives the accomplishment of project work related to expenditures and actual completion.

In a nutshell, planning gives the estimated cost, actual cost is expenditure done so far while earned value gives the physical status of the project.

Financial Management Responsibilities on the other hand are in stark contrast to Earned Value Management. In this, Finance Manager has the responsibility to ensure expenses are kept within the budget and funds are made available for execution of project modules. The responsibilities include dealing with financial institutions for project related funds and being a key player in the decision making team of the organization.

While Earned Value Management basically gives status of the project as compared to budgeted provisions, Financial Management is directly related to actually controlling the expenses related to project and to make available funds needed for completion of project.