Staying within budget and schedule is one of the project manager's most important jobs. It is not an understatement to say that if you master this one thing, most other things will fall into place. The secret to doing this well is called earned value management. It is one of the foundational processes of project management, as well as a central component of the … [Read more...]
Mismanaging project costs is the single fastest way to cause project failure. Project costs represent the many multi-faceted experiences that occur on a project, however stakeholders see only the bottom line and draw rapid conclusions from it. For this reason, the planning of the management of project costs is the focus of the Project Management Body of Knowledge's … [Read more...]
Keeping project costs under control can feel like swimming against the current sometimes. To prevent you from going up the creek without a paddle, a Cost Management Plan is the guiding document which allows you to take fast, decisive action when issues arise and the sharks are circling. The Project Cost Management Plan is the component of the overall Project … [Read more...]
The Budget at Completion (BAC) is a value used in earned value management, a division of project management. It represents the original project budget. For example, if a project has a budget of $10,000, BAC = $10,000 Therefore, there is no other formula or calculation for this metric. The BAC is often compared to the Estimate at Completion (EAC) which … [Read more...]
Love it or hate it, the measuring stick for a project manager is often their ability to keep projects on time and under budget. Thankfully, project management theory provides us with a fantastic tool to keep us on target. But it has to be used correctly. Like a software tool, if you are not trained to use it, it’s just a bunch of numbers. Once the technique is … [Read more...]
Earned value results are very easy to report to senior management or other stakeholders. Generally the recipient needs some basic training regarding the meaning of the numbers, but this is not a major undertaking. We break down the typical reporting methods into three categories: Small projects Medium-size projects Large projects Small Projects For small … [Read more...]
The To-Complete Performance Index represents the efficiency level, specifically the CPI (Cost Performance Index) that will make the project finish on time. It can be a powerful indicator because it is generally easy to ascertain if your people will be as productive as the indicator tells you. There are two ways to calculate the TCPI: To achieve the original … [Read more...]
In earned value analysis, the Estimate At Completion, usually abbreviated EAC, is the estimate of the final project cost given the past performance of the project. Thus, it allows the project manager to see what the final project cost estimate is. The EAC is one of four calculations in the Earned Value Management which allow you to forecast the future performance of … [Read more...]
In earned value analysis, the Estimate To Complete, usually abbreviated ETC, is the expected remaining cost to complete the project. It is not the final overall project cost (that's the EAC), rather it is the expenditure from now to the end of the project. It does not include what has already been spent. Thus, it allows the project manager to compare the funding needs … [Read more...]
Earned Value Management is the secret to project success! If you are passionate about having projects finish on time, on schedule, and with all other project success criteria satisfied, you must learn how to use it. Earned Value Management is a project control technique used by project managers to keep projects on schedule and budget. Earned Value analysis gives the … [Read more...]
