Implementing a project performance measurement system using Earned Value requires, at the very least, and as an absolute pre-requisite, an understanding of the key terms used within that domain.
The Australian Standard AS-4817-2006, “Project Performance Measurement using Earned Value”, outlines a set of key definitions, which I will list below. If you are a new entrant into the Earned Value world or a seasoned practitioner, check whether these terms ring a bell or better, make part of your daily terminology. If you are not certain what some of these terms mean it is time to get back to the literature (preferably the standard) and ensure they are as clear to you and unambiguous as possible.
- Activity
- Actual Cost
- Baseline
- Budget
- Budget at Completion
- Constraint
- Control Account
- Corrective Action
- Cost Variance
- Critical Path
- Direct Costs
- Earned Value
- Estimation at Completion
- Estimate to Complete
- Float
- Indirect Costs
- Management Reserve
- Milestone
- Network Schedule
- Other Direct Costs
- Performance Measurement Baseline
- Planned Value
- Project Budget
- Schedule Variance
- Undistributed Budget
- Variance at Completion
- Work Breakdown Schedule
- Work Package
If your goal is to establish a Performance Measurement Baseline (PMB) for your project you should be able to utilize each and every one of these terms before you could move into the more esoteric area of developing a PMB and subsequently monitoring your project’s performance using Earned Value.
Think about it!
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Shim – I’d like to add on at the very top of the list:
0. Define your Project Scope
In my opinion this precedes everything else. If you cannot properly define your project scope you will not be able to identify/calculate any of the other KPIs.
Hi Cornelius, thanks for commenting out.
Although I agree in principle (defining the scope is rather important) I intentially included only those items specifically mentioned in the definition section of the guide. Cetainly for anyone to attempt involvement in project performane measurement they ought to have clear understanding of all project management aspects, including the need to define the scope.
Cheers, Shim.
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