Fundamentally, a key challenge for organizations in today�s

Document Sample
Fundamentally, a key challenge for organizations in today�s Powered By Docstoc
					Fundamentally, a key challenge for organizations in today’s world is to succeed in balancing two parallel,
competing imperatives:

       To maintain current business operations
       To transform business operations in order to survive and compete in the future
Consequently, the focus is to achieve a balance between business as usual and business change. Projects
are the means by which we introduce change – and, effective control of a project's scope, schedule, and
budget is fundamental to achieving a quality project. This approach is known as “Earned Value
Management.”

Earned Value Management (EVM) is a technique to measure the scope, schedule and cost performance
compared with plans, by comparing the completed work-products and the actual cost and time taken
against their schedule and cost estimates.

The Earned Value (EV) metrics used to determine the level of success include:
     EV = PV * % complete, where PV is the Planned Value:
            o Portion of approved cost estimate planned to be spent on activity during given period
            o Physical work scheduled to be performed
     Cost Performance Index (CPI) and Schedule Performance Index (SPI) are indicators of how
        closely accomplished work is on budget and on schedule.
            o CPI shows how many dollars worth of work is being accomplished for every dollar spent
                     CPI = EV / AC, where AC (Actual Cost) is the actual amount of money spent
            o SPI shows how the work is progressing compared to the original schedule
                     SPI = EV / PV

If CPI is less than 1.0, the project is over budget; if CPI is more than 1.0, the project is under budget. If
SPI is less than 1.0, the project is behind schedule; if SPI is more than 1.0, the project is ahead of
schedule.

Fundamental Project Management Plan Goals and Objectives:
    o Goal No.1: Project to be completed on schedule
    o Objective 1: Schedule Performance Index = 1.0 +/- .01

    o Goal No. 2: Project to be completed within approved budget
    o Objective No. 1: Cost Performance Index = 1.0 +/- .01

References:
(2008) A Guide to the Project Management Body of Knowledge, 4th ed., PMI: Newtown Square
(2009) Projects in Controlled Environments (PRINCE2), http://www.best-management-practice.com/

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:1
posted:9/13/2012
language:Unknown
pages:1