Earned Value Management (EVM) is a project management technique for measuring project performance. PRISM is an Earned Value Management System (EVMS) that helps you find variances in projects based on the comparison of worked performed and work planned. So, why use an earned value management system like PRISM? Here are four great reasons:
4 Reasons to Use EVMS:
- Early Warning System: You will find one of the most important functions of 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 much 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. According to an article published in The Measurable News, "Project Management by exception is nothing more than utilizing earned value Cost, Accounting and Schedule Integration (CASI) as a means to efficiently manage and control strategic projects. Earned Value utilizes these three CASI cash flows to calculate key performance indicators (KPIs), which permit “managing a project by exception.”
- Communication Tool: Communication is stifled when problems are hidden. It usually backfires when there is an expectation that problems will fix themselves. EVMS is a communication tool helping everyone associated with a project understand the answers to important questions like 1) what is the work scope?, 2) When is the work planned to be accomplished?, 3) What resources are planned to be used to accomplish work?, 4) What is the estimated cost of the planned work?, or 5)What is the progress of the work?
There are many other benefits to implementing an earned value management system so this article just scratches the surface. To learn more about how PRISM helps streamline your earned value management, watch the on-demand video below.
Learn more about PRISM and earned value management. This 30-minute on-demand video highlights the best practices in streamlining your earned value management.