Question

What are the benefits to earned value managment in a project setting?

Answer 1

Earned Value Management (EVM) can be defined as a technique that is helpful for the project managers to measure and analyse the performance of the project. This is a systematic project management process which is used to find variances in projects based on the comparison of worked performed and work planned.

Earned Value Management is an important tool used by the project mnagers for the cost and schedule control. It is very useful in project forecasting. It contributes to monitoring the project plan, budgeted and actual work completeion and variance of the work completed. Earned Value management shows how much money and time should be spent taking in to account the work done so far.

The following are the benefits of the Earned Value Management-

• Preventing scope creep or the kitchen sink syndrome- It means changes in continuous or uncontrolled growth in the scope of a project after the beginning of the project. The best way to reduce/ prevent this is to document the scope of the project.
• Better communication with stakeholders and responsible accounting- The to and fro with the stakeholders becomes more transparent and is fairly visible to each other. The accounting and book keeping is better and up to date.
• Risk reduction- The risk is reduced to a considerable amount and can be controlled to a great extent.
• Evaluation of Profitability- The cause and effect relation of the profit can be studied and evaluated.
• Evaluating the performance- The study of variances can be done and the performance can be tracked very easily.