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Unformatted text preview: k packages and higher summary level aggregations of the work. They both know that earned value at any level of aggregation is computed by multiplying the budget for the component of work being considered by the ''percent complete" for the component of work. But one of them gets accurate earned value measurements, and the other one gets misleading information. How can this be? The problem is that the "budget" and the "percent complete" are concepts that have subtle meanings. Unless you are managing one of those extremely rare projects whose budgets never change, there is no such thing as a single budget. There are many artifices companies use to deceive themselves into believing there is a single budget for a project. But in reality there are multiple implicit budgets. There is, of course, the original budget that is part of the original project plan. Then there are multiple variations of this budget caused by change orders, quantification variances, productivity variances, and contingency draw -downs. You might think you do not have all these things on your project, but chances are you have some of them. These budget modifiers are all explained in this book. But, for now, we simply point out that most project managers do not know how to tell a quantification variance from a productivity variance or whether quantification or productivity variances should be included in the budget that is used for earned value calculation. Calculating the "percent complete" is equally if not more complex. There are many methods (referred to as statusing methods ) that have been devised for calculating the percent complete for some aggregation of work. Most of these methods have their place for certain types of work and for certain situations. Many project managers do not know when to use which Page xv method and, on many projects, project control personnel do not apply the methods in a uniform or consistent manner. The end result can be performance measures that do not measure performance meaningfully. Moreover, it is difficult to see this early in the project lifetime. As a project nears completion, it becomes obvious that improperly calculated performance measures are meaningless. But by then, it is often too late. The very tools you have used to guide you through the pitfalls of project management now appear to have betrayed you. This book has been designed to provide you with the right balance of theory, methods, psychology, and practice to become an effective project manager the very first time you get the opportunity to manage something more than a ten-person project. For many professional project managers, gaining this ability comes hard. Moreover, there are many would-be project managers who have abandoned their attempts along the way. Effective project management on today's projects, where the emphasis is often on the rapid completion of the project, is not something that is learned entirely in the classroom or by reading a book. But having the right training and the right tools makes a big difference....
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This note was uploaded on 01/11/2011 for the course ACC 9 taught by Professor Yeetan during the Spring '10 term at Sunway University College.
- Spring '10