What does it take for earned value management to be successfully applied in an organization? It takes more than just a willingness to apply earned value by project managers. Organizationally, successful earned value management provides the foundation for standardized objective project performance reporting.
For the implementation of earned value management to be successful in an organization, the following factors should be considered:
- Senior management support. Support for the setup and application of earned value management occurs through the funding and authorization of resources for organizational assets needed for earned value management. Management support is required for establishing and resourcing a project management office (PMO) which establishes policies, standards, processes, procedures, and governance for EVM practices. Management support is also often necessary when implementing EVM for a critical project as EVM may sometimes be considered unnecessary, time-consuming, and costly. Proper management support can influence stakeholders to understand that EVM is a necessary investment for project success.
- Organizational process assets. Earned value management processes and procedures are essential process assets for an organization. Additional process assets that aid in the EVM process include but are not limited to estimating standards, planning standards, change management processes, and systems, accounting procedures, costing processes, historical information, knowledge transfer assets, lessons learned, and governance processes.
- Environmental factors. Factors that influence the setup and application of earned value management include but are not limited to organizational culture, supportive environment, risk tolerance, resource availability for the application of EVM, project management maturity, and governance at the portfolio, program, and project levels.
- Training and knowledge transfer. An organization committed to effective EVM should consider investing in training and knowledge transfer assets. Project managers should be trained in project management and earned value management practices. Special training may also be required for the detailed planning for a major client or government project requiring EVM.
- Project management staffing. Project managers should have the appropriate knowledge and experience to manage projects requiring earned value management. They should have the discipline to ensure that the proper investment is made in the planning processes to develop the performance measurement baseline. Project schedulers and cost controllers can also be essential project resources on major projects.
While earned value management can be applied to a project without organizational standards and support, project performance reporting can be improved significantly with organizational support. A project management office (PMO) can provide the leadership and discipline to implement and support earned value management.
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