If we apply 80:20 principle to the entire project management concepts, Earned Value Management (EVM) falls into the 20 percentage of the concepts which will give us 80% of the benefits. EVM helps project managers to be more pro-active. This ability to forecast helps project managers to manage their projects effectively. In the absence of it, one becomes very reactive and helpless. EVM is built on some very basic building blocks like;
Planned Value (BCWS) – Also known as Budgeted Cost Of Work Scheduled till the project review date. Sum of the budgeted values of work that were supposed to be completed as per the plan, till the review date.
Earned Value (BCWP) – Is also known as Budgeted Cost Of Work Performed (BCWP). This is the sum of the budgeted cost of the work performed till the review date.
Actual Cost (AC) – Is the actual cost of work performed till the review date.
The underlying concept
If the earned value (EV) is equal to the planned value (PV), then the project is progressing as per the schedule.
If the actual cost (AC) is equal to the earned value (EV), then the work is progressing within budget.
The ratios to be monitored
Schedule variance (SV) = Planned value (PV) – Earned value (EV)
Cost Variance (CV) = Planned Value (PV) – Actual Cost (AC)
Schedule performance index (SPI) = EV/PV Cost performance index (CPI) = EV/AC Schedule variance percentage = ((EV-PV)/PV)*100
If the SPI=1 and CPI=1 indicates that the project is right on track schedule wise as well as cost wise.
A well implemented earned value management system can become the cornerstone for effective project management.
Watch the video at www.youtube.com/pmriworld
Ken schwaber and mike beedle started scrum because they were suffocated by surrounding non value adding processes and structures. Their key intent was to make something simple, as close as possible to the natural way of doing things, which protects the pigs from the chickens, and it prospered. Lot of people joined hands with them and the scrum alliance happened. Then they decided to teach the rest of the world how to scrum through certifications, and a chosen few tried to monopolise it. The founders got chucked out and they started scrum.org and launched their own certifications. Now pmi has joined the bandwagon. Soon pmriworld, also will join the group. Sometimes one get a feeling that the scrum leadership also follow the scrum team size of seven. Whenever it goes beyond it, it splits.
Knowledgeworks India, has announced Agile project management using SCRUM workshop on the 3rd March 2011 (8 contact hours), and the three day PMdistilled PMP preparatory program on 4,5,6 March 2011 (35 contact hours). Block your seats as early as possible. Please recommend this course to those who may be interested.
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Finally I was able to pull some time to make this happen.
Cleared PMP successfully yesterday.
Hope you guys are doing well. Take care.
Thanks & Regards,
Project Management Research Institute is glad to announce the following PRINCE2 training schedule. Those interested, please contact us at 0091 9895372115.
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