Earned Value Management System - Critical Success Factors

In this podcast Ricardo discuss the critical success factors of the use of earned value in projects. He presents the main areas where everybody must pay attention while using the technique and also approaches the relevance of the proper understanding of the concepts behind the numbers and how important is the project planning in order to use the EVMS.

Download (5 MB)

Episode transcript

The transcript is generated automatically by Podscribe, Sonix, Otter and other electronic transcription services.

Hello everybody welcome to the five minute PM podcast today, or like to talk to you about Ernest value management. And I like not to explain what it's earned at Valley, but for me, we chart the success factors. I did my master degree in Earned at Valley applied here in industry is in Brazil. And the first thing that for me, it's a challenge for everybody. Everybody really enjoyed to see the results and to see all the calculations then to see the numbers CPI SPI.

But the first thing that we need to understand is the math behind this. What is the real concept of Earned Valley? What is the real concept of planet Valley? And what's the real concept of actual cost. It's very, very different from what I hear from a lot of people, they think that the most important is to do copulation, but to do a calculation with the wrong data. It's pointless, not know it's not only a pointless, it's a danger, it's a danger because you can drive your project to the failure only because you are doing the right calculation with the wrong concept.

Second thing is the kind of product. Some projects are much easier to do or an advance with the tail project, the tail product, something tangible that you can see that you can touch and you can measure So construction. It's much easier to find the Earned at Valley and to do the proper calculation, Dan, something that is intangible, for example, software development, to use, they're not value in the software development.

What do you need to do? You need to convert everything into metrics and to convert everything into metrics. You need to use something like function point or something like that. So it's not reasonable trying to guess, okay. My task is 25%. So at my Earned valleys, 25% of the budget for the stats. This is reasonable. Only if you can measure is a new, you can be sure that you reach 25% of the work, complete dirt aspect that I want to share with you.

It's proper planning, proper planning. It's not only calculation, it's not control, but its to plan very well and prepare a very well done. WBS chart, built a proper scaffolding process and do all the budgeting built the cost account plans. What is the cost account plans? It's the same set of work packages that you put together to make sure that you can control the Earned Valley and the planet Valley and the actual cost on that.

So the cost account plan for sure in us government contracts, they have a lot of requirements on that, but I'm not covering that. I'm covering the use the basic use for all companies for your own benefit. So you can set up your cost account plan and the size that you think you can measure properly. An audit set up the right base line to make sure that you have the right plan at Valley along the time with the time.

And then you need to be able to measure it. As I said in the beginning of this, Podcast it's really, really important that you measure and you measure properly. And sometimes the people use only the percent complete it. This is a very strong danger, very dangerous. Y because it's very easy for you to mix up things and say that its 25, but the real it's 10%, 5%.

So we have many, many kinds of measure to measure the Earned at Valley. And we need to know that this art, the success factors without this it's pointless in a very dangerous to use, Earned it Value they're dangerous because you can drive your project to the danger and make decisions based on SPI CPI. DCPI an audit things based on the wrong routes. So if you want to cultivate something before you take the fruit's, you need to drag the soil water, you need to work very hard on that.

And I'm, I'm preparing this. Podcast only because I spend this week sometime with France talking about that. And that was very, very concerned at about what I heard. Oh, I'm using a magic software that does everything for me. And I say, OK, but how do you plan your project in and say, Oh, does this is, this does a matter too much in business. They're dangerous. So this is a Podcast to warn everybody, to make sure that only with very proper planning that you can drive the results, everything software upgrade.

Everything is great. When you have the right tools to do that, when you have the right concept to do that, I hope you enjoyed this podcast and see you next week with another five minutes. Bam. Podcast bye.

Menu

Resources & Insights

Products & Services

More Resources & Insights

Ricardo Vargas

Podcasts

Earned Value Management System - Critical Success Factors

Search in Podcasts

Latest podcast episodes

Book recommendations

Menu

Resources & Insights

Products & Services

More Resources & Insights

Ricardo Vargas

Podcasts

Earned Value Management System - Critical Success Factors

Search in Podcasts

Latest podcast episodes

Book recommendations

Subscribe to our newsletter