Page 35 - DCAP304_DCAP515_SOFTWARE_PROJECT_MANAGEMENT

Unit 1: Introduction to Software Project Management

Earned Value (EV) Management Notes

In earned value management the development of a project is estimated by comparing what
already has been done with the estimates that were made at the beginning of a project. By
extrapolating these measurements, a project manager can judge how much resources will be
used at the end of a project. Some ordinary acronyms that are used use in the EV management:
BCWS Budgeted Cost for Work Scheduled

BCWP Budgeted Cost for Work Performed
ACWP Actual Cost of Work Performed
BAC Budget at Completion
EAC Estimate at Completion

Budgeted Cost for Work Performed (BCWP) is also identified as the earned value. This value
shows what a project actually has earned at a certain point in time. The cost of an amount of work
can be expressed in diverse ways.

Example: In dollars or in hours.
Also one has to choose when something has been earned. It can be chosen to only set something
to be earned when the full task is done. Or say that the part of the task that by now had been done
has been earned. In the last case the problem is that estimating how far a task has progressed is
complex.

Advantages

In a project a manager can judge if the projects are on schedule/budget. If that’s not the case an
estimate can be made how far the project is over budget.

Disadvantages

It’s very tricky to estimate the real Earned Value at a certain point in time. Wrong estimates of this
value can make a project look like it’s doing a lot better then it really is (or the other way around).

Figure 1.6: An Example of a Project Network

Usage in Methodologies

EV management can be utilized to monitor projects where there is planning beforehand when
assured goals should be reached. This encompasses most thick methods.

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