Earned Value Calculation
Earned value calculation for projects requires work to be organized into discrete components, fully defined and deliverable oriented.
The fundamental principle of Earned Value Management is the objective measurement of performance, a calculation which is only possible when the work involved in a project is broken into its discrete components ("terminal elements"), reflected in a Work Breakdown Structure.
Defining the Project
First, the purpose, objective and budget of the project must be defined. In TrackerSuite.Net, this takes place in the project definition document. As well as a description of the project, this document also holds key data, including:
- Project dates, including expected completion as well as actual completion.
- Project budget information. TrackerSuite.Net allows project budgets to be set at either the project or task level.
- Key project personnel, including team members, managers, sponsors and stakeholders.
- Important project milestones.
- The project's place in the organization's programs.
Defining Terminal Elements
The next step in earned value calculation is to establish the terminal elements the project requires. In TrackerSuite.Net, terminal elements are considered tasks. Like projects, tasks have a task definition document which contains a description of the work required, as well as key information including:
- The assignee(s), and the time allotted to them to complete the task. In conjunction with the employee's hourly Cost Rate, which is included in their profile in Personnel Tracker, this provides an initial Planned Value for the task.
- The duration and expected completion date of the task.
- The priority of the task.
- Subtasks for the work at in question.
- The budget category of the work involved, such as capital or non-capital.
Establishing a Work Breakdown Structure
As well as defining the work for the project, the work must be structured as well. TrackerSuite.Net provides a Work Breakdown Structure model that supports task dependencies and linked tasks for the sequential assembly of tasks. By defining the processes within the WBS with the assignment of responsibilities and metrics such as milestones and completion percentages, a Performance Measurement Baseline can be determined by totaling these processes, and ultimately the calculation of the project's earned value.
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