Information Technology Reference
In-Depth Information
$60,000
$50,000
$40,000
Planned value
Earned value
$30,000
$20,000
Cost variance $
$10,000
Schedule variance time
$0
Time
(in months)
Figure ..2
Schedule variance in project execution (variance by time and cost).
7.1.1
Need for EVM
Any project is initiated to create value for the organization for which the project
was conceived. If for some reason, at any stage of the project, things get delayed
or resources are wasted, then it puts a question mark on the promised delivery of
the project. If you track a project just in terms of percentage of work completed or
percentage of budget spent, then it is difficult to know if the project is on track or
ahead of schedule or is lagging behind. From this information it is also not clear as
to what factors are causing delays or wasting of resources.
For this very reason, it is important to keep a clear charter of the project and
its progress at any given time to know where the project is heading. By charting an
ideal course of progress for the project from the start and comparing it with actual
progress of the project, you can clearly see what factors, if any, are causing problems
$16,000
Cost variance $
$14,000
$12,000
$10,000
$8,000
$6,000
Actual cost
Earned value
$4,000
$2,000
$0
Time (in months)
Figure ...
Cost variance in project execution.
