I have to analyze how the scope of an assigned project relates to Earned Value Management (EVM).
I have to elaborate on how a project manager integrates both of the concepts for effective project progression?
I must also indicate the following::
- Use of a work breakdown structure to scope the project
- The work breakdown structure as the foundation for EVM
- Planning the project
- Scheduling an earned value project
- The earned value baseline.
In order to answer all of the questions above and to understand the relationship between project management and earned value management, we need to create the foundation from which these two concepts emanate. To do so and to understand the basis for these two concepts, we need to discuss the principles and concepts related to finance. Finance principles include (among others), the following:
* maximize shareholder wealth
* manage the time value of money
* understand the risk/reward concept and how it affects future based decision making
* leverage the use of assets to grow a business
* diversify in order to help reduce risk
* create cash flow which is KING for any business
* competitive markets relate to the fact that all business firms are constantly looking for investment opportunities to leverage and grow their business model
* efficient capital markets relates to the idea that the markets price a firm correctly and that market changes can happen quickly
* taxes will affect all business decisions
* ethical behavior relates to the notion that we should always do the right thing --- even when no one is watching.
Now what does this have to do with project management and earned value management? ALL businesses want to grow in order to provide increasing returns to their investors (maximize individual wealth), and all businesses require a new or re-arranged set of assets in order to provide this return (risk/reward concept). Growing firms require new assets in order to generate growth, and this requirement usually exceeds the ability of the firm to fund these assets. Hence the need for involvement in the capital market --- the constant need for funding in order to acquire new assets to continue the growth process. Capital can be raised in three different ways:
* through the issuance of debt (bonds)
* through the issuance of equity offerings (stock)
* through the issuance of a hybrid security known as preferred stock which has the combined properties of debt and equity.
The capital market is the place to gain access to these funds --- and all of these sources of funds have costs associated with them --- it requires the firm to either pay back the funds (debt + interest), or provide the necessary return to investors in ...
This report attempts to detail the relationship of project management and earned value management through the understanding of the potential final influence on a firm's performance and its resultant implications