How can you use EVM to gain stakeholder support for your project?
As a software project manager, you know how important it is to communicate your project's progress, performance, and risks to your stakeholders. But how can you do that effectively and convincingly? One way is to use earned value management (EVM), a project management technique that integrates scope, schedule, and cost data to measure and report your project's status and forecast its outcome. In this article, you will learn how to use EVM to gain stakeholder support for your project by following these steps:
EVM is based on three key metrics: planned value (PV), earned value (EV), and actual cost (AC). PV is the budgeted amount of work that should have been completed by a certain date. EV is the value of the work that has been actually completed by that date. AC is the amount of money that has been spent to complete the work. By comparing these metrics, you can calculate other indicators of your project's health, such as cost variance (CV), schedule variance (SV), cost performance index (CPI), and schedule performance index (SPI). These indicators tell you whether your project is on track, ahead, or behind schedule and budget.
To use EVM for your project, you need to define the scope, schedule, and budget of your project in a work breakdown structure (WBS), a hierarchical decomposition of the project deliverables and tasks. Then, you need to assign a monetary value to each task or deliverable, based on the estimated effort, resources, and risks involved. This value is the PV of that task or deliverable. Next, you need to establish a baseline plan that shows how the PV will be distributed over the project duration. This plan is the basis for measuring your project's performance against the expectations.
To track and measure EVM data, you need to collect and record the EV and AC of your project tasks or deliverables on a regular basis, such as weekly or monthly. You can use various tools and methods to do this, such as timesheets, invoices, progress reports, or software applications. Then, you need to compare the EV and AC with the PV and calculate the CV, SV, CPI, and SPI of your project. These calculations will show you how much your project is deviating from the baseline plan in terms of cost and schedule.
To analyze and report EVM data, you need to interpret the meaning and implications of the EVM indicators for your project's status and outcome. For example, a negative CV or SV means that your project is over budget or behind schedule, respectively. A CPI or SPI lower than 1 means that your project is performing worse than planned in terms of cost or schedule efficiency, respectively. You also need to use EVM data to forecast the future performance and completion of your project, using formulas such as estimate at completion (EAC), estimate to complete (ETC), and variance at completion (VAC). These forecasts will help you identify and manage the risks and issues that may affect your project's success.
To communicate EVM data to stakeholders, you need to tailor your message and format to suit their needs and preferences. For example, you may use different levels of detail, frequency, and tone for different audiences, such as senior executives, sponsors, clients, or team members. You may also use different channels and media, such as emails, dashboards, presentations, or meetings. The main goal of communicating EVM data to stakeholders is to inform them of your project's achievements, challenges, and expectations, and to persuade them of your project's value, credibility, and feasibility. You also want to solicit their feedback, input, and support for your project's decisions and actions.
-
Strong EVM discipline can instill stakeholder confidence that the business outcomes will be achieved, and/or when their help may be needed. EVM can also assist them in setting realistic expectations with their customers. Senior leaders have many plates spinning at once, so if your project has a strong EVM discipline, those leaders can sleep a little better knowing exactly where your project is at, with early warning signs of any potential trouble, and likelihood of success.
To use EVM data to improve your project, you need to act on the insights and recommendations that you derive from the EVM analysis and communication. For example, you may use EVM data to adjust your project's scope, schedule, or budget, to implement corrective or preventive actions, to resolve conflicts or issues, or to celebrate milestones or successes. You also need to monitor and evaluate the impact of your actions on your project's performance and outcome, and to update and revise your EVM data accordingly. By using EVM data to improve your project, you can demonstrate your project's value and quality to your stakeholders, and increase their confidence and satisfaction in your project's delivery.
Rate this article
More relevant reading
-
Software Project ManagementHow can you use earned value management to communicate project variances?
-
Business DevelopmentHow can earned value management help you monitor BD project performance?
-
Earned Value ManagementHow do you define and measure work package performance using EVM?
-
Variance AnalysisWhat are the tools and techniques for conducting scope variance analysis?