Read and reflect on the assigned readings/videos for the week. Respond to both the below:
- Based on the different concepts covered, choose one topic area to explore further. Conduct online research related to that topic across at least two articles. Post a summary (2-3 paragraphs) of these learnings to further educate your peers on the subject.
- Provide a graduate-level response to one of the following questions:
- Why would having a cost performance index score of 1.6 be good and alarming?
- Do you believe that measuring CPI provides a strong level of confidence to predict if the project will continue to trend at that same percentage? What may cause it to change?
- What are some possible pitfalls as related to EVM and how might a Project Manager overcome such?
Your post must be substantive and demonstrate insight gained from the course material. Postings must be in the student's own words - do not provide quotes nor use ChatGPT or other tools to write on your behalf!
Your initial post should be at least 450+ words and in APA format (including Times New Roman with font size 12 and double spaced). Post the actual body of your paper in the discussion thread then attach a Word version of the paper for APA/Plagiarism review.
Module Overview:
As we progress through the project, the Project Manager will be expected to report on where the project stands in relation to budget and time. Earned Value Management takes into account such relationships on where the project is expected to be at (Planned Value), versus how much did the team actually complete (Earned Value), versus how much cost did we consume so far (Actual Cost). From these values we can then determine are we trending on/under/over budget or on/under/over time expectations of work performed.
Module Objectives:
By the end of this module, you will be able to:
- Using Earned Value Management, students will be able to monitor project performance
Learning Materials:
Project Budget:
Another important aspect to controlling a project is keeping track of project expenses. Note there are many different expenses related to a project including:
Labor | Hiring and paying people to develop and operate projects |
Materials | Equipment and supplies pertinent to the project |
Subcontractors | Any consultants and independent contractors hired to perform |
Equipment and facilities | Rental of space, offices, equipment |
Travel | Any expenses relevant to travel - air fare, car rentals, hotel, etc. |
In addition, there are different types of costs such as recurring and nonrecurring, fixed or variable, and normal or expedited costs. Estimating costs is a challenging process and project teams may use a variety of methods ranging from highly quantitative (thus little room for error) to qualitative (based on judgment or opinion with high room for error). During project planning a cost schedule should be established, which identifies over time and in relation to the activities, what costs are anticipated to occur on the project. The Project Manager can then monitor that these costs are staying within check. Any fluctuation, especially if an anticipated overrun should be escalated to the Project team and Sponsor quickly so corrective action or change requests can be implemented as applicable.
Earned Value Management:
As project teams execute projects, one important thing that the team must do is carefully monitor and analyze progress to ensure success. Control measures allow us to recognize the status of the project at any given time during the life cycle. For example, such control measures tell us where we stand with the budget at any point in time or what milestones have been reached. Earned Value Management (EVM) is a critical control tool that jointly considers combined time, cost, and performance. Be sure to read the PMI articles and videos below to further learn about the numerous terms and calculations related to EVM including: Planned Value (PV), Earned Value (EV), Schedule Variance (SC), Cost Variance (CV), Schedule Performance Index (SPI), Cost Performance Index (CPI), and more.
PMI Articles:
- https://www.pmi.org/learning/library/earned-value-...
- https://www.pmi.org/learning/library/make-earned-v...
Here are two videos related to Earned Value:
Milestones & Gantt Charts:
Project milestones help identify critical check-in points or tollgates within a project. They commonly exist before moving onto the next major deliverable. Typically the project team will present their work to the customer or other team members to gain consensuses that the project deliverables are meeting the set objectives. Agreement flags the completion of the milestone and progression to the next effort of work. Note often Project Managers just offers a list of milestones and tracks whether they were completed as part of the project status report; however, this method alone is not sufficient to understand if the project is trending appropriately on-time or on budget. As just because you may have completed 5 out 8 milestones, you may be six months behind schedule and $50,000 over budget. Thus, that is again where the power of EVM comes into play.
Gantt charts compliment Milestones and Project Schedules. They offer a visual representation of the project activities, relationships of other activities, and calls out milestones typically as a diamond. See example below.
[Image unavailable: Gantt charts compliment Milestones and Project Schedules. They offer a visual representation of the project activities, relationships of other activities, and calls out milestones typically as a diamond]
Please read the following articles:
References
Project Management Institute. (2021). A guide to the Project Management Body of Knowledge (PMBOK guide) (7th ed.). Project Management Institute.