Earned Value Management (EVM) is a project management technique for measuring project performance. ARES PRISM project management software is an Earned Value Management System (EVMS) that helps organization’s find variances in projects based upon the comparison of worked performed and work planned. Often EVMS is used to describe and refer to the conceptual framework regarding earned value analysis, here we are using it as that in addition to referring to our software which accomplishes this goal.
Traditional methods for evaluating a project’s health can yield misleading results. The Earned Value process is a proven method for identifying the specific areas of a project that need early management intervention while they are still correctable. As such, ARES PRISM is a leading Earned Value Management System for Project Management.
“I think one of the key things that we gained from introducing PRISM was that we got one source of truth. Prior to that, we used cost-loaded schedules in P6 and a data warehouse, which produced inconsistent earned value data, leading to a lack of confidence in data integrity”
– Sarah Moore, Project Controls Manager, LLWR Ltd.
EVMS At Its Best
PRISM utilizes earned value Cost, Accounting and Schedule Integration (CASI) as a means to efficiently manage and control strategic projects. By establishing a control account and a work breakdown structure (WBS), PRISM is able to measure project performance measurements in regards to the current period, past performance via historical data and future performance measurement via critical path and earned value methods thanks to their remarkable predictive capabilities.
Why Monitor & Report Project Performance with Earned Value Analysis?
Early Warning System: One of the most important functions of an EVMS is to provide an early warning system. This means a projects performance and productivity issues can be identified very early in a project’s life. Significant cost and schedule variances are detectable when the planned work has reached as little as 10% completion on any portion of the project.
Course Corrections: Part of the EVMS process is to determine the cause of performance issues in order to develop a corrective action plan. Course corrections are made easier when performance issues are identified early. This is because the problem is still relatively small and there is plenty of time left in the project to allow a recovery plan to work.
Management by Exception: A project managed at a control account or work package level allows management to easily identify the accounts with performance problems. Management can then focus its efforts on correcting those areas. Alternatively, management can recognize the areas of the project showing good performance.
Communication Tool: Communication is stifled when problems are hidden. It usually backfires when there is an expectation that problems will fix themselves. An EVMS is a communication tool that helps everyone associated with a project to understand the answers to important project management questions, including:
1. What is the work scope?
2. When is the work scheduled to be completed?
3. What resources will be used to accomplish the work?
4. What is the estimated cost of the planned work?
5. What is the progress of the work?