16 Jan Earned Value Management Exercise
PMI states that “the result of tailoring is that the project management methodology will be suitable for use in specific types of projects, and a tailored methodology will reflect the size, complexity and duration of the project as appropriate for the organizational context along with adaptation to the industry within which the project is undertaken.” (Whitaker, S. (2014). The Benefits of Tailoring: Making a Project Management Methodology Fit. PMI White Paper.) To illustrate this point, complete the following exercise.
Congratulations! You have been hired to design a new smartphone. Before we start getting all your great ideas down on paper, we need to figure out how you will approach your project. For this exercise, let’s say you decided to run the project using traditional methods.
You have been given your high-level project objectives, but the first step for you and your team is to create a project plan for your smartphone project.
You create the following schedule and budget:
Design Phase: 1 month, $60,000
Hardware Construction: 6 months, $400,000
User Interface Development: 12 months, $800,000
User Testing: 1 month, $40,000
Total Budget: $1.3 million
Timeline: 20 months
Fantastic, your plan has been approved, and you are off to the races. You are now three months into your project. You have spent $250,000 and have just finished all your designs due to lots of changes and feedback from your customer.
Using our earned value analysis, let’s look at project performance:
Determine your earned value at this point.
Determine your actual cost at this point.
Given these numbers, you find that your cost performance index (CPI) is .24, which means that for every dollar spent, you only earn 24 cents of value. This doesn’t seem to be looking good.
If you decide to carry on with your traditional approach, the estimate for completion of the project is $6,208,33.33. This number is how much we would spend if we kept up our CPI of .24. It is an estimate based on the current trends.
Considering the given scenario, draft a response of 525 words or less in a Word document to reflect the following:
To save your project, determine 2 ways you could restructure the project work from this point.
Assess how 1 or both of your suggestions will help you complete the work and still stay within your budget.
Analyze 1 thing you would change if you could turn back time and start the project again, knowing what you know now.
Format your assignment consistent with APA guidelines.
Submit your assignment.
Resources
Center for Writing Excellence
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