Earned Value Management

Earned value management is a project management technique for measuring project performance and progress. It has the ability to combine measurements of the project management triangle:

• Scope
• Time
• Costs

In a single integrated system, Earned Value Management is able to provide accurate forecasts of project performance problems, which is an important contribution for project management.

Early EVM research showed that the areas of planning and control are significantly impacted by its use; and similarly, using the methodology improves both scope definition as well as the analysis of overall project performance. More recent research studies have shown that the principles of EVM are positive predictors of project success.^[1] Popularity of EVM has grown in recent years beyond government contracting, a sector in which its importance continues to rise^[2] (e.g., recent new DFARS rules^[3]), in part because EVM can also surface in and help substantiate contract disputes.^[4]

Essential features of any EVM implementation include

1. a project plan that identifies work to be accomplished,
2. a valuation of planned work, called Planned Value (PV) or Budgeted Cost of Work Scheduled (BCWS), and
3. pre-defined “earning rules” (also called metrics) to quantify the accomplishment of work, called Earned Value (EV) or Budgeted Cost of Work Performed (BCWP).

EVM implementations for large or complex projects include many more features, such as indicators and forecasts of cost performance (over budget or under budget) and schedule performance (behind schedule or ahead of schedule). However, the most basic requirement of an EVM system is that it quantifies progress using PV and EV.

Project Cost Management

Project Cost Management (PCM) is a method that uses technology to measure cost and productivity through the full life cycle of enterprise level projects.^{[citation needed]}

PCM encompasses several specific functions of project management including estimating, job controls, field data collection, scheduling, accounting and design. PCM main goal is to complete a project within an approved budget^[1]

Beginning with estimating, a vital tool in PCM, actual historical data is used to accurately plan all aspects of the project. As the project continues, job control uses data from the estimate with the information reported from the field to measure the cost and production in the project. From project initiation to completion, project cost management has an objective to simplify and cheapen the project experience. ^[2]

This technological approach has been a big challenger to the mainstream estimating software and project management industries.^[3] [4]

Project Cost Management is one of the ten Knowledge Areas outlined in the A Guide to the Project Management Body of Knowledge (aka the PMBOK Guide). It is used during the Planning and Monitoring & Controlling Process Groups.

There are 4 processes in this knowledge area including

1. Planning Cost Management
2. Estimating Costs
3. Determining Budget
4. Controlling Cost

A key technique for Project Cost Management is Earned Value Management (EVM).

Project Risk Management

Project risk management is an important aspect of project management. According to the Project Management Institute's PMBOK, Risk management is one of the ten knowledge areas in which a project manager must be competent. Project risk is defined by PMI as, "an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives."

Project risk management remains a relatively undeveloped discipline, distinct from the risk management used by Operational, Financial and Underwriters' risk management. This gulf is due to several factors: Risk Aversion, especially public understanding and risk in social activities, confusion in the application of risk management to projects, and the additional sophistication of probability mechanics above those of accounting, finance and engineering.

With the above disciplines of Operational, Financial and Underwriting risk management, the concepts of risk, risk management and individual risks are nearly interchangeable; being either personnel or monetary impacts respectively. Impacts in project risk management are more diverse, overlapping monetary, schedule, capability, quality and engineering disciplines. For this reason, in project risk management, it is necessary to specify the differences (paraphrased from the "Department of Defense Risk, Issue, and Opportunity Management Guide for Defense Acquisition Programs"):

• Risk Management: Organizational policy for optimizing investments and (individual) risks to minimize the possibility of failure.
• Risk: The likelihood that a project will fail to meet its objectives.
• A risk: A single action, event or hardware component that contributes to an effort's "Risk."

An improvement on the PMBOK definition of risk management is to add a future date to the definition of a risk.^[2] Mathematically, this is expressed as a probability multiplied by an impact, with the inclusion of a future impact date and critical dates. This addition of future dates allows predictive approaches.^{[citation needed]}

Good Project Risk Management depends on supporting organizational factors, having clear roles and responsibilities, and technical analysis.

Chronologically, Project Risk Management may begin in recognizing a threat, or by examining an opportunity. For example, these may be competitor developments or novel products. Due to lack of definition, this is frequently performed qualitatively, or semi-quantitatively, using product or averaging models. This approach is used to prioritize possible solutions, where necessary.

In some instances it is possible to begin an analysis of alternatives, generating cost and development estimates for potential solutions.

Once an approach is selected, more familiar risk management tools and a general project risk management process may be used for the new projects:

• A Planning risk management
• Risk identification and monetary identification
• Performing qualitative risk analysis
• Communicating the risk to stakeholders and the funders of the project
• Refining or iterating the risk based on research and new information
• Monitoring and controlling risks

Finally, risks must be integrated to provide a complete picture, so projects should be integrated into enterprise wide risk management, to seize opportunities related to the achievement of their objectives.

Excerpt from wikipedia : https://en.wikipedia.org/wiki/Project_risk_management

Scope Management

In project management, the term scope has two distinct uses: Project Scope and Product Scope.

Scope involve getting information required to start a project, and the features the product would have that would meet its stakeholders requirements.

• Project Scope: "The work that needs to be accomplished to deliver a product, service, or result with the specified features and functions."^[1]

• Product Scope: "The features and functions that characterize a product, service, or result."^[1]

Notice that Project Scope is more work-oriented (the hows), while Product Scope is more oriented toward functional requirements (the whats).

If requirements aren't completely defined and described and if there is no effective change control in a project, scope or requirement creep may ensue.

When a construction site is being built, the constructor raises a fence on the site defining the boundaries of the construction. This process of building a fence is called scoping. Scope management is the process of defining what work is required and then making sure all of that work – and only that work – is done. Scope management plan should include the detailed process of scope determination, its management and its control. This needs to be planned in advance before the commencement of the project during mobilization phase. Project manager must seek formal approval on a well-defined and clearly articulated scope. To identify scope, requirements must be gathered from all stakeholders. Gathering requirements from only a few stakeholders or only the sponsor might lead to incorrect definition of scope. Large projects require more time, effort and resources to gather requirements and thus defining the scope is important. Scope definition helps us make sure that we are doing all the work but only the work included in the scope management plan. Gold plating a project (adding extras) is not allowed. Changes in scope must be taken into consideration all the knowledge areas of project management such as time, cost, risk, quality, resources and customer satisfaction. Integrated change management process is required to approve changes to scope of a project. Integrated Change Management includes updating of Change Request Form by Change Originator and also tracking the change on Change Control Register.

Excerpt from Wikipidea https://en.wikipedia.org/wiki/Scope_(project_management)