Earned Value Management

By Author: Sherry Roberts
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There are several steps to choosing a baseline for your business. Define and document each metric clearly in a metric data sheet. It involves any data necessary such as name of the metric, the intended purpose, measured units among others. Before using the metrics collect data to define a normal range. Verify the metrics using corresponding retrospective metrics from earlier similar projects (Kendrick, T., 2010).
Diagnostic metrics
Diagnostic metrics is measurements and analysis to evaluate the performance metrics of an organization. The diagnostic metrics helps us to analyze a problem and analyze the cause behind less than expected results. They categorize an event and categorize on the relative rates of occurrence of the various categories. Another type of diagnostic metric may report on the performance of various processes that together contribute to the achievements of the results measured (Kendrick, T., 2010).
Example 1
An organization carries out a satisfaction survey of its customers and despite successful provision of services the customers are less satisfied with the organization than last time. Another survey is done with key customers to determine their levels of satisfaction with the services provided by the organization.
Example 2
Diagnostic metrics makes allows marketers to identify levers of change in one channel that can directly or indirectly impact another channel. A good example is increasing a specific social marketing effort, for example, may lead to the reduction in CPA for a specifically paid media campaign.
Example 3
When the performance of a Web application is slow, you can trace problematic transactions as required using Interactive Transaction Tracing. You can record a series of user actions and navigation paths. You can playback transactions interactively and perform an in-depth analysis of the response times across all tiers of the Web application for quick diagnosis.
How to deal with variances in diagnostic metrics
Analysis of both positive and negative variance for impact is necessary. Positive variance may provide opportunities for the heightened execution of future work. Negative variance can derail the projector even cause disruptions. After contrasting the data using diagnostic metrics first check with the people who provided the data to confirm the problems. For each, variance determines the root of each problem. Decide how to respond after deciding the cause of the problem (Kendrick, T., 2010).
Pros and cons of earned value management
Advantages
The main advantage of EVM is that it is time and cost effective. Earned value management is a single system that scans the projects in terms of work, time and money. The metrics can help determine the current status of the project and determine the root of any variance.
Disadvantages
Earned value management as a metric does not take quality into consideration; it is possible that the project is scoring highly, but the quality of work is low. Earned value management uses planned value as the baseline used to make calculations and predictions. But there is always an element of concern in predictions. The cost of implementing earned value management as a metric is discouraging. The time required to amass all the necessary data about actual costs is a lot in large, diverse projects (Kendrick, T., 2009).
Agile project management
Agile project management is a continual and incremental path to planning and guiding project processes. It involves constant communication between the customer and the project team, which includes functions for project management and business analysis. Managers use agile project management because it ensures the quality is as high as possible. Agile project management has a high customer satisfaction level. It also increases team morale, collaboration, and ownership. Agile project teams use time estimation and cost to measure project achievement and make project decisions are often more applicable and more accurate than earned value management. Earned value management is task driven and predictive; it assumes that prospects affecting the project are predictable. Agile project management focuses on continuous improvement, scope flexibility, team input and delivering quality products (Kendrick, T., 2009).
 
References
Kendrick, T., (2010). The Project Management Tool Kit: 100 Tips and Techniques for Getting the Job done right., United States of America., Library of Congress.
Kendrick, T.,(2009) Identifying and Managing Project Risk: Essential Tools for Failure-Proofing your project., United States of America., Library of Congress.

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