For a project team to accurately calculate the earned value of a project what steps must be taken in the beginning of the project and what must the project manage commit to throughout the project management lifecycle?
Earned value is the total budget percent usually completed at a certain level in the time scheduled to complete a project. It is also referred to as work performed budget cost. In other words it is the way in which completed work level on a project is monitored and measured against the plan. Earned value helps managers to measure the performance of any project. From the beginning a project team should understand true status of the project to grantee them completion on time or per the budget. Tracking of the project status commence as from the starting point and not at the end. The planned value all through the project can be schemed from the time and cost values contained in the plan of the project. The project team should understand that when certain tasks are planned to be completed in a particular period of the project, the budget cost for the tasks becomes the planned value.
Besides the team should also graph the actual cost from the beginning of the project implementation. The team should understand that the actual cost is the total of indirect and direct charges spent to complete the tasks during various specific time of the project. They have to take not of the time and the resources used in completing the planned tasks. For example when more time and resources are used to accomplish the tasks than as scheduled, the actual cost will definitely be higher than the planned value. Thus posing a great threat to the project. Therefore it is necessary for any project team to track planned value and actual cost for all the task carried out to accurately calculate earned value of a project.