Project Management 101

Wednesday, March 26, 2008

Positive Thinking in PM

"Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence."
Helen Keller

Optimism, confidence and positive thinking in projects is needed for successful outcomes.

Helen Keller said well and it applies to our life, work and every aspect of our lives - even Project Management :)

The lack of these will lead to lack of motivation to complete projects and hence failure in our endeavours - be it our lives or projects.

Have a Great Journey to Project Success Always,
Ramesh Jude Pachamuthu, PMP

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Friday, March 14, 2008

Earned Value Management (EVM)

Earned Value Management (EVM) - a project management technique that combines schedule & cost performance and it is about the investment returns in a given project.

It helps to answer the following question: “What did we get for the money we spent?”

Basic concepts of EVM:
  • All project steps “earn” value as work is completed.
  • The Earned Value (EV) can then be compared to actual costs and planned costs to determine project performance and forecast performance trends.
  • Actual physical progress is measured in terms of dollars, hence schedule and cost performance can be analyzed in the same terms.
  • Planned Value (PV)- the timephased budget and schedule, incremental plan which gives cost and schedule baseline.

The DOD Australia, DMO website on Performance Management defines the following as such:

  • PV - The sum of the budgets for all work effort planned to be accomplished (ie. the plan).
  • EV - The sum of the budgets for all work effort actually accomplished.
  • Actual Cost (AC) - The actual costs incurred to date.
  • Budget At Completion (BAC) - The sum of all budgets allocated to the contract. This does not include the contractor Management Reserve.
  • Estimate at Completion (EAC) - Actual costs to date plus an estimate for work remaining.

In the next post, I will talk about the other EVM terms and formulae and how these help in measuring project performance.

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