Feedback is critical to the success of any project. Timely and targeted feedback can enable project managers to identify problems early and make adjustments that can keep a project on time and on budget.
Earned Value Management (EVM) has proven itself to be one of the most effective performance measurement and feedback tools for managing projects. It enables managers to close the loop in the classic business formula, “Plan, Do, Check, Act.”
EVM has been called “management with the lights on” because it can help clearly and objectively illuminate where a project is and where it is going—compared to where it was supposed to be and where it was supposed to be going. EVM uses the fundamental principle that patterns and trends in the past can be good predictors of the future.
EVM provides organizations with the methodology needed to integrate the management of project scope, schedule, and cost. EVM can play a crucial role in answering management questions that are critical to the success of every project, such as:
• Are we ahead of or behind schedule?
• How efficiently are we using our time?
• When is the project likely to be completed?
• Are we under or over our budget?
• How efficiently are we using our resources?
• What is the remaining work likely to cost?
• What is the entire project likely to cost?
• How much will we be under or over budget?
If the application of EVM to a project reveals that it is behind schedule or over budget, the project manager can use the EVM methodology to help identify:
• Where problems are occurring;
• Whether the problems are critical or not;
• What it will take to get the project back on track.
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