Controlling project costs and schedules
Earned value, linear regression, PERT analysis and milestone tracking: four methods for monitoring a project’s completion trend.
A project’s success depends largely on the ability to anticipate and control costs and schedules. This requires monitoring its completion trend: how expenditure and time evolve compared with the original forecasts.
This article presents four commonly used methods for estimating that trend and controlling project costs and schedules.
Earned value management
Earned Value Management (EVM) is a project management technique that compares the actual cost of work performed at the current stage of a project (ACWP) with the planned value of the work (PV) and its earned value (EV).
By analysing the difference between earned value and planned value, as well as between earned value and actual cost, project managers can identify completion trends and adjust resources or actions accordingly.
Linear regression analysis
Linear regression is a statistical method for explaining the relationship between two variables, in this case costs and time.
By plotting historical project data and fitting a straight line that best represents the relationship between the two variables, project managers can forecast the completion trend and detect anomalies or deviations from the norm.
PERT analysis
PERT (Program Evaluation and Review Technique) is a project planning and control technique used to estimate schedules and costs while accounting for uncertainty.
By assessing optimistic, pessimistic and most likely scenarios for each activity, managers can estimate the completion trend and identify critical paths to optimise resources and schedules.
Read more about PERT in practice.
Milestone tracking
Milestone tracking is a simple way to estimate a project’s completion trend by monitoring progress on key activities.
Comparing planned and actual milestone completion dates helps managers quickly identify delays. Cross-checking this information against cost data also helps identify budget overruns and prepare corrective action.
Using trends to guide project control
Controlling costs and schedules is essential to project success. Earned value, linear regression, PERT and milestone tracking offer several ways to assess expected completion and respond to difficulties.