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Earned Value Analysis is another name for the Earned Value Method (EVA). The project manager can use this method to determine the quantity of work that has been completed on a project. The EVA allows the project to be measured in terms of its progress. The project manager can anticipate the entire cost and its completion date based on the measured progress. The Budgeted Cost of Worked Performed, or BCWP, is frequently referred to when “earned value” is used. The project manager uses this value to compute the project’s efficiency indices. It also gives details on how the project is progressing in comparison to the initial plan. If these indices are applied to future operations, they can be used to forecast how the project will develop in the future, as long as the performance indicators do not change.
The project manager can use the Earned Value Method to answer the following three questions regarding the project: Where were we? Where are we now? and Where are we going?
The anticipated value specifies how far a project’s activities should be completed at a given point in the project schedule and cost estimate. The planned physical work and the budget approved to fulfill the anticipated activities are referred to as the baseline of the project schedule and expenses. The actual cost (AC), sometimes known as the actual cost of work performed (ACWP), is the actual cost of completing a project assignment. This value refers to what has actually been spent, and it might be either cumulative or current, much like the intended value (Lukas, 2012).
The cost variance is computed by subtracting the earned value from the actual costs incurred: CV = EV – AC. If the result is 0, it signifies that the project is adhering to the budget perfectly. If the outcome is negative, it signifies that the project is over budget, i.e., the expenditures incurred are more than those anticipated. The Schedule Variance, which represents the project’s actual status in terms of planning, is calculated by subtracting the budgeted expenditures up to the time the analysis is performed from the earned value. Here’s how it works: SV equals EV – PV. If the outcome is zero, it signifies that the project is proceeding as planned. If the outcome is positive, it indicates that the project is on track. If on the other side, the outcome is negative, it signifies that the project is behind schedule and that action is required (Lukas, 2012).
The best way to monitor project quality is to bring together Key Performance Indicators and reporting on their trends is an efficient technique to communicate project progress. The project manager should track the objectives, cost tracking, labor tracking, and change orders and report to the team and managing staff at the frequency agreed upon at the start of the project, according to project monitoring and controlled best practices.
A Cause and Effect (fishbone) Diagram is a more detailed and well-defined quality tool that may maintain project quality. A cause-and-effect diagram, often known as a fishbone diagram, depicts the various sources of a problem. To use this tool, identify the problem you’re attempting to address and then write it in the box (head of the fish) to the right (Lotich, 2021). Following that, you will outline the key reasons for the problem on the fish’s spine. Causes are often classified as people, processes, materials, and equipment. Causes are then found by brainstorming with a group of people who are familiar with the issue. Once all potential causes have been identified, they can be used to create an improvement plan to resolve the identified problem (Lotich, 2021).
References
Lotich, P. (2021, January 18). 7 management tools for quality control. The Thriving Small Business. Retrieved September 27, 2021, from https://thethrivingsmallbusiness.com/seven-management-tools-for-quality-control/.
Lukas, J. A. (2012). How to make earned value work on your project. Paper presented at PMI® Global Congress 2012—North America, Vancouver, British Columbia, Canada. Newtown Square, PA: Project Management Institute.
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