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Why is Earned Value Technique Important in Project Management?

Did you know that project management is a popular career path you can pursue? Besides, getting a PMP certification in Dallas will make you a highly eligible candidate for fulfilling the coveted job role of a project management professional (PMP). The PMP certification in Dallas is globally recognized and having it can fetch you rewarding jobs across several industries. 

In this context, Earned Value Management (EVM) technique is a critical management approach that all project managers should be aware of. But, what is the EVM technique and why is it at all important? Here’s a comprehensive guide to walking you through the details.

Project Management: A Popular Career Choice

Project managers are the heart and soul of every organization. There is no doubt that a project manager has one of the most testing roles in a company. Being actively involved in a project demands sound leadership skills, efficiency, tenacity, and determination, and if you’re someone who’s got all that, pursuing a project managerial role is one of the best career decisions you’ll ever make. 

So, let’s take a look as to why project management is an excellent career choice.

  • There is ample scope for the progression of your career.
  • You will get constant opportunities to learn and develop your skills.
  • You get to deal with projects that are unique and in turn expand your knowledge.
  • You will understand the importance of minor details and how one seemingly small mistake can topple the entire project and the team. Now, that’s a good life lesson there!
  • While you’ll have a lot of responsibilities, it’s also a great opportunity to make a positive impact on the company.
  • Last but not least, as a project management professional you’ll draw pretty attractive salaries!

What is Earned Value Technique?

The concept of Earned Value technique or Earned Value Management is not new. In fact, it was the basic approach to program management when in 1966 the United States Air Force authorized earned value along with other requirements related to planning and control in Air Force programs. 

But, what exactly is the earned value technique? Let’s take a look.

Earned Value Management is a procedure that assists project managers to measure the performance of a project. Being a systematic project management method, EVM finds variances in projects on the basis of a comparison of the work performed and the work planned. It incorporates a total of 32 guidelines defining a set of requirements that the management system of a contractor must meet. These guidelines are divided into the following five sections:

  1. Organization: This section includes a set of guidelines focussing on the work breakdown structure and the organization breakdown structure. While the former elaborates the tasks to be performed and their relation to product variables, the latter identifies those accountable for the work effort defined in the work breakdown structure.
  2. Planning, Scheduling, and Budgeting: This section lays down 10 guidelines covering the fundamental specifications of planning, scheduling, and determining the budgets for the project’s tasks.
  3. Accounting Considerations: As evident from the name, this section includes six guidelines for capturing the actual costs disbursed for the project’s work effort.
  4. Analysis and Management Reports: Comprising six guidelines, the fourth section is all about cost and schedule variances, recording the cause, impact, and corrective action, and setting a new estimate at complete.
  5. Revisions and Data Maintenance: The last section consists of five guidelines emphasizing the timely and appropriate incorporation of stop-work orders and customer-directed changes.

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Why is The Technique Important?

The EVM technique is now used worldwide for various programs. For instance, it is a prerequisite of many agencies of the U.S. Government including NASA, the Department of Defense, the Department of Energy, the Department of Homeland Security, the Intelligence Community, Health and Human Services, and others. Other prominent users of the Earned Value Management Technique include Europe, Canada, Japan, China, and Australia.

Getting a PMP certification in Dallas and becoming a project manager entails that you have to carry out an assessment of the schedule as well as the cost performance of the project. The EVM technique will help you know where a project stands – whether it is behind/on/ahead of schedule and whether it is over/on/under budget. But, the benefits of the EVM technique go way beyond. So, here are some of the top reasons why the Earned Value Management Technique is absolutely crucial for project managers!

  • First, the EVM technique is a great aid for measuring the accuracy of the project schedule and budget. Using EVM, you can calculate schedule variances and cost variances and help minimize damages arising out of unforeseen obstacles or modifications in project scope or client preferences.
  • Second, the EVM technique is a significant instrument for tracking project performance in real-time. In other words, EVM provides tools for effective integration of budget and schedules into the system along with providing a practical understanding of reports and analytics. 
  • Third, the EVM process effectively alerts project managers about possible issues and risks that may crop up and disrupt the project lifecycle. Through measures like the acquisition of more resources, adjusting project scope and budget, investing in improved technologies, and others, EVM helps keep the project on track by making modifications ahead of time.
  • Most importantly, EVM is a great tool for the realistic planning of projects. Making EVM a part of the project planning process means that project managers can define the project baseline. Consequently, this baseline serves as a yardstick for the assessment of project performance, showing the actual work that is accomplished against the estimated schedule.

Conclusion

If you want to engage in a fulfilling career that lets you explore your leadership skills, project management is one of the best options out there. The role is stimulating, challenging, and offers abundant opportunities to transform industries. Further, incorporating the EVM technique gives a unique edge to the project management process, whose benefits the entire organization can reap. So, if you’re serious about assuming a project managerial role in the future, there can be no better time to get your PMP certification in Dallas.

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