Monitoring Project Performance with Earned Value Management
In This Chapter
Getting a grip on Earned Value Management and all the terms and formulas that go with it
Understanding the how-to of Earned Value Management
Approximating an activity’s earned value
Suppose you are a senior manager responsible for a particular Project Manager. On the current project, the plan shows that your Project Manager should have spent £110,000 by the end of Week 6. Today it’s the end of Week 6 and you receive the regular report on the state of the project. You look at the section on project financials and see that the Project Manager has spent exactly £110,000. You’re a bit surprised that the figure is correct to the penny, so you crosscheck the project code on the report screen of the organisational finance system. The finance system confirms that the project spending to date is on the button at £110,000.00. Are you pleased with the Project Manager? Will you recommend him for promotion to extremely senior Project Manager? Everyone knows, after all, that money and budget control is everything in organisations.
Well, you might not be so pleased if you then look further down the status report and see that of the work due to be completed by the end of Week 6, less than half has been done. Your Project Manager has spent the money for you okay; he’s good at spending money. What he hasn’t done is the scheduled work, and what has been achieved actually cost more than twice as much as projected. ...