Using Earned Value Management to Improve Project Results
Ask a project manager what key variables must be managed for a project, and the answer will undoubtedly be cost, schedule, and scope. Each of these is defined in the initial project contract with the customer. Then it’s off to the races! The project starts, money is spent, time goes by, and progress is made. The trap, however, is to consider these three factors in isolation, rather than together. Then it’s all too easy to assume that if X (millions of) dollars have been spent, or if Y months have passed, Z percent of the project has been accomplished. Yet as too many companies find out too late, spending half the project budget does not guarantee that you will have accomplished 50% of the deliverables.
Enter earned value management, or EVM for short. This project management methodology was created to prevent such issues, by integrating cost, schedule, and scope, and by reducing subjective measurement of progress. Instead, it measures what was spent and compares it with the budgeted amount for the work completed. Did you get 50% of the work done, while spending only 25% of the budget? You’re doing well! Or did you get 50% of the work done, but at the expense of 75% of the budget? If so, you know remedial action is urgently needed
LoadSpring’s SpringBoard cloud portal facilitates the Earned Value Management process for project teams. It displays all their information in a single platform with customizable dashboards. The SpringBoard Insight feature provides project teams with fast and easy business intelligence by pulling together critical data from multiple applications. In fact, SpringBoard is designed for streamlined access to your project intelligence and executive reporting needs from all your project management software in one single source. You no longer have to navigate through multiple projects and apps to get the fundamental “OK or not OK” information that shows you in seconds how well you are really doing.
Earned Value Management brings many significant benefits to project management, including:
- Prevention of scope creep
- Risk reduction
- Objective performance tracking
- Accurate project forecasting
- Improved information sharing with stakeholders
- Precision in profitability analysis
- Improved accountability
- Early warnings of overruns and delays
The process for using Earned Value Management via SpringBoard Insight to enhance your project from the start onwards is as follows:
- Establish the scope to clearly define what must be delivered.
- Create a Work Breakdown Structure (WBS) to split your project into several manageable parts.
- Create an Organizational Breakdown Structure (OBS) to pinpoint who is responsible for what within the project team.
- Define the Control Accounts, which are where teams establish the budget for each part of the scope, where you analyze earned value, and where you collect the actual costs. A control account is in effect the place where WBS and OBS meet.
- Create a project schedule with all the timed activities required to deliver the project scope, with a budget assigned to each activity.
Then experience the competitive edge of SpringBoard Insight as a fully customizable project intelligence system that gathers data from all your project management apps and displays Earned Value Management and other key indicators in graphs, tables, S-curves, and any other form of report you need for making quick executive level decisions. Contact LoadSpring now to find out more and to see Earned Value Management and much more in action with SpringBoard Insight!