Earned value project management

Earned Value Management

How does Earned Value Project Management differ from traditional project management? In your response please discuss the concepts of schedule variance and cost variance.

The primary differences between Earned Value Project Management and traditional project management are numerous. The single most significant difference is the inclusion of scope, schedule and cost in the Earned Value Project Management framework relative to traditional project management. In addition, there are significant differences in the costing and variance methodologies between Earned Value Project Management and traditional project management frameworks. The reliance on schedule and earned value variances predicated on how resources are allocated, costed and managed differentiates Earned Value Project Management relative to traditional project management (Anbari, 2003). Schedule variances are calculated not only on the resource constraints inherent in any projects' plan, they are also calculated given the value of them as well (Curling, 1998). Variances are calculated based on costing differences and time value of resource constraints, not just on an evenly distributed rate of resource costing (Rose, 2003). Earned Value Project Management is essential for orchestrating complex constraints over the life of larger projects (Anbari, 2003). There is a common misconception that schedule variance and cost variance are only suitable on larger, more complex projects (Curling, 1998). In fact Earned Value Project Management is applicable to any project, and can be implemented using a series of frameworks that could just as easily be automated in Microsoft Excel for example (Curling, 1998). Earned Value Project Management seeks to optimize scope, schedule and cost.

Assume you are hired as a project management consultant for a company in an industry in which you have experience. What project management approaches would you suggest for this industry, and why?

The first series of project management initiatives I would put into place would concentrate on quantifying the scope, schedule and costs for the entire range of possible project outcomes followed by an Earned Value Project Management assessment. The intent of the Earned Value Project Management planning session would be to concentrate on providing the stakeholders within insights into each phase of the project development and the level of earned value at any point in time. The ability to use Earned Value Project Management to define checkpoints and key insights into the financial performance of a project plan is critically important to ensure the project will succeed (Curling, 1998).

Schedule and cost variances would also be calculated using Earned Value Project Management techniques to further quantify the relative value of using one specific series of resources, in a given sequence, compared to another. The optimizing of resources for a given project must take into account the potential earned value of each specific asset or resource relative to its opportunity cost in other usage scenarios (Rose, 2003).