8. Two of the main issues that project management and project managers face in term of projects are related to falling behind schedule and to over budgeting. The Earned Value Analysis solution is an excellent way to deal with both at the same time. The EAV measures the way a project has evolved through its different phases and helps forecast the eventual cost at deadline, along with the variances that may occur along the way.

Of course, if all these elements mentioned would be only qualitative, we may have a problem. However, the best advantage about EAV is that it uses measurable, quantifiable indicators in order to determine whether the cost, schedule and work accomplished elements are all performing as initially planned when the project was defined.

It is best to introduce now some metrics that are used with the concept. These include Schedule Variance (SV), obtained by comparing BCWP (Budgeted Cost of Work Performed) and BCWS (Budgeted Cost of Work Scheduled) and the Cost Variance, as the difference between BCWP and the Actual Cost of Work Performed (ACWP). Negative variance in these cases means that either the project is over budget or behind schedule.

Of course, using these two metrics, schedule variance and cost variance, we are already prepared to make assumptions about the business. Let's suppose a software and it company needs to deliver a product for a customer in a period of time t and using a certain amount of money. At time t1, the project manager performs an evaluation which leads to the following conclusions.

The Budgeted Cost of Work Performed was evaluated at $49,000 and Budgeted Cost of Work Scheduled is evaluated $55,000 and the Actual Cost of Work Performed is evaluated $56,000. The Schedule Variance can be calculated, in this case, as equaling $- 6000 and the Cost Variance as equaling

7000. As both cases show, the project is both behind schedule and over...

In this case, it is not going well.
In traditional approaches, many of the qualitative evaluations were generally performed towards the end, when nothing much could be done and when the budget needed to be increased so as to cope with the additional costs accounted for during the time passed from phase 1.

However, in this case, an evaluation like this performed, let's say, after a quarter of the project has been accomplished, will allow the project manager and the investors the necessary time to take the right measures.

In this case, the it project is spending too much money. A solution for this would be a better work efficiency, a form of management that would permit people to work with better results in order to achieve goals. The idea with EAV is that it is great in determining the problems when there is still enough time left to do something about them.

Bibliography

1. DeCarlo, Denise. Triple Constraint -- Friend or Foe? ESI Horizons Cover Story. July 2004. On the Internet at http://www.esi-international.com/public/publications/0704tripleconstraints.asp http://www.cio.noaa.gov/itmanagement/evaslides.ppt#2

3. Concept: Work Breakdown Structure. On the Internet at http://www.chambers.com.au/Sample_p/wbs_cncp.htm#WBS%20Role

Concept: Work Breakdown Structure. On the Internet at http://www.chambers.com.au/Sample_p/wbs_cncp.htm#WBS%20Role

DeCarlo, Denise. Triple Constraint -- Friend or Foe? ESI Horizons Cover Story. July 2004. On the Internet at http://www.esi-international.com/public/publications/0704tripleconstraints.asp

On the Internet at http://www.cio.noaa.gov/itmanagement/evaslides.ppt#2