Abbott Project Management Playbook

cost variances (changes to the Cost Baseline) to the Project Manager to avoid adversely impacting the successful completion of the project. Approved and potential cost variances should be reported to stakeholders in accordance with the Communication Plan.

9.5 C HANGE C ONTROL – I NTEGRATED C HANGE M ANAGEMENT P LAN Integrated Change Control (PMBOK 4.5.1) Used to evaluate CHANGE REQUESTS

The purpose of an Integrated Change Control Process is to • identify possible changes or a change that has already occurred • identify and influence the factors that circumvent Integrated Change Management • review changes for their impact on scope, schedule, cost, quality, and risk across the entire project

• act on requested changes • manage approved changes • maintain the integrity of the baselines to ensure accurate progress reporting • review and approve recommended corrective actions

9.6 E ARNED V ALUE M ANAGEMENT DEFINITION: What is Earned Value Management?

Earned Value Management (EVM) is a measured approach to assessing project performance and predicting project outcomes by integrating scope, schedule, and cost data. It uses data gathered from the project at a point in time and compares it to target values established during project planning. These target values comprise the scope, schedule, and cost baselines. Elements/Process/Details EVM uses three primary metrics obtained at a specific time which can be applied at various levels of a project from the total project down to the individual work package level. For simplicity, the term ‘activity’ is herein used to mean the total project, a work package, and all intermediate levels of project detail.

• Planned Value (PV) - The authorized, budgeted amount to complete an activity. It is the Cost Baseline. The total value of all planned work for an activity is known as the Budget at Completion (BAC). At the beginning of a project, PV = BAC. • Earned Value (EV) - The value (not the cost) of an activity represented by the completed portion of the PV. • Actual Cost (AC) - The cost incurred to achieve the earned value. An activity whose actual cost is greater than the earned value is either behind schedule, over budget, or both.

Only the PV is known from the project start until the end because it is recorded as the cost baseline. The actual cost and the earned value are based on periodic progress measurements during project execution. EVM also derives several metrics to determine performance, variances, and forecasted outcomes, all of which can be done at any level of the project from the total project down to an individual work package.

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