In 350 words explain why the Earned Value is important Why i

Solution

Earned Value Management (EVM) is an enhanced method of performance management over the traditional project management methods. Whereas, the traditional methods focus on actual versus planned expenditure, EVM also considers actual accomplishment, which provides a clearer insight of the project performance.

Earned Value is measured as the Budgeted Cost of Work Performed (BCWP). The calculation includes multiplication of Budgeted value and % complete. The EVM measures milestones such as Cost and Schedule variance (CV, SV), Cost and Schedule performance Index (CPI, SPI), Estimate At Completion (EAC), Estimate To Complete (ETC), Variance At Completion (VAC)

Earned Value is important because it integrates the scope and cost of project and the schedule measures, which help the project management team to make a precise assessment and measurement of project progress and performance over multiple parameters.

Budgeted cost of the Work Completed is important because it improves the planning process; helps relate time phased budget to tasks; objective assessment of project status; help objective measurement of cost and schedule performance; helps in forecasting and helps in identifying potential risks.