A project manager must deal with many different issues on a daily basis, for example, The project deadlines are firm but the resources are occupied. The deadlines have been tightened but the quality must stay the same. The customer wants a higher quality product at the same price. In order to balance these often competing objectives, the Project Management … [Read more...]
Earned value analysis is a project management method used to calculate the project status from two perspectives: Schedule. Is the project ahead of or behind schedule? Cost. Is the project over or under budget? Let's say you are the project manager for the renovation of 3 hotel rooms. The tasks are as follows: Preparation. Jan. 1 - Jan. 10, … [Read more...]
It's amazing how many projects do not know their true status until near the end, when there is little that can be done to ensure they finish on time or budget. The proper time to rigorously track project status is at the beginning, not at the end. This is when project risk can be managed and changes made to get it back on track. Earned value analysis is the … [Read more...]
Putting out fires is rarely a good project management strategy, even though most project managers have so much experience with it that they could take it up as a second career. Suffice it to say that project control is where the project manager earns their wages. Project control is the tasks required to ensure the project is completed on time, on budget, … [Read more...]
A baseline is defined as a time-based standard against which performance is measured. A project baseline is a time-based, progressive plan as opposed to one, single target value. Projects will often have a single, target value, but it is important to know if the project is in good health at any given intermediate project control point. The baseline … [Read more...]
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 … [Read more...]
Everybody has heard of a project whose cost spiralled out of control. Even big megaprojects where the difference measures in the billions are not immune to cost pressures. In fact, they are even more likely to go over budget. What is the official project management methodology for controlling project costs? To answer this question, we consult the … [Read more...]
The earned value method is the project management standard for cost control during a project. Whether you are a practicing project manager or studying for the PMP exam, you need to know how to calculate earned value. Fortunately, it involves nothing more than basic high school math. The more difficult part is knowing what each of the variables means and how … [Read more...]
Earned Value is a method used by project managers to calculate the current project status and predict future project performance. In this post we will outline each earned value formula. Planned Value (PV) Earned Value (EV) Actual Cost (AC) Schedule Variance (SV) Schedule Performance Index (SPI) Cost Variance (CV) Cost Performance Index (CPI) … [Read more...]
Poor project cost management is one of the easiest ways to make a project go awry. Hence, good project management requires a firm grasp on the concepts and techniques in project budgeting and cost control. Thankfully, the Project Management Body of Knowledge (PMBOK) gives us a strong foundation in this area. Project Cost Management is the fourth of 10 project … [Read more...]
