ABSTRACT
The use of earned value measurement techniques can produce data that gives a valuable insight into the workings of the project, but will be of little value unless project managers act upon the information in a way that preserves the project’s objectives. However, what earned value can reveal may also be highly sensitive if it shows a worsening situation, and here the project manager needs to use a degee of discretion
In Chapter 5, Figure 5.1 shows the principal elements in the project cycle and it will be realized that using earned value methods has a significant effect on the approach to planning. EV’s other major impact is the contribution it makes to the control process. Once the earned value performance measurement system is in operation, each responsible section manager will be required to participate in the control process through: 1) the work that they authorize, 2) their assessment of the amount of progress, and 3) the controlling actions they take. Generating an accurate value for the earned value or BCWP has often been considered as one of the more contentious parts of the whole earned value management process. The generally accepted criterion is that earned value reporting should be both objective and verifiable but sometimes a subjective or an arbitrary element in this must be accepted. However, as the project progresses more activities are completed; the BCWP for a completed activity becomes the Original Budget (OB) and doubt about its value is removed. The greater the numbers of activities that are completed, the less the potential error within the overall project BCWP, as that figure contains a continuously reducing proportion of activities in progress; in effect, progress with the project tends to reduce the errors in the estimate of the overall BCWP. A number of methods for estimating the BCWP are possible; each has its drawbacks, but all are worthy of consideration for different circumstances. The methods can be broadly divided into four categories: subjective assessments, objective measured assessments, rules of thumb and indirect assessment.
