Project Performance Measurement Tools

The performance of a project can be measured by a number of ways. Effective techniques are used to identify and report specific performance of the project; this enhances the ability to measure performance against set standards. In addition, identification of specific performance helps the manager make sure that control costs are minimized and operations are run according to the schedule.

Earned Value Management

Earned Value Management (EVM) is one method that can be used to measure a project’s performance. EVM can be defined as a process of determining the operation of a project by evaluating and monitoring the project plan, the value of completed work, and the actual project’s work as per the requirements (Murch, 2004). Problems encountered in the project are spotted by the manager through the Earned Value Management.

Budgeted Cost of Work Performed (BCWP) and Budgeted Cost of Work Scheduled (BCWS) are two ways that EVM can be implemented. The actual costs and scheduled performance are compared with budgeted costs and planned performance through the two methods of EVM.

Budgeted Cost of Work Schedule

A recognized budget that is allocated to a project or activity so as to complete it in a specific period of time is called a Budgeted Cost of Work Schedule (BCWS) (Marshall, 2007). First, a table that displays figures for material and labor cost that are associated with each phase of the project should be drawn. For example, labor costs that may amount to £150, 000, whereas, material costs amounting to £120,000 are fed into table. The figures will be used as the planned costs in the measurement of the project’s performance, against the actual cost. This should help the manger to determine the success of the project and minimize costs.

Budgeted Cost of Work Performed (BCWP)

The cost budget of the actual work carried out in a project for a given period of time; is referred to as, the Budgeted Cost of Work Performed (BCWP) (Marshall, 2007). For example, £270,000 could be the total budgeted cost for our project. If our project is scheduled to run from, 01/06/2022 to 30/09/20222, and half of the project is scheduled to be completed by the end of July 2022, BCWP will therefore be calculated as £135,000 (£270,000 × 50%). However, BCWP for the project will be £108,000 (£270,000 × 40%), if only 40% of the project will be completed by the end of July 2022. In order for the project to succeed budget-wise, ACWP for the project should be equal to or less than £108,000 as at the end of July 2022.

Schedule Performance Index (SPI)

Schedule Performance Index (SPI) may also be used by the manger to determine if the project is operational as per that schedule. The project will be perfectly on schedule if the value of SPI will be 1; an SPI value of greater than 1 implies that the project is ahead of the planned schedule; an SPI value of less than 1 implies that the project is behind schedule (Pritchard, 2009). Therefore, the manager of any project ought to ensure that the SPI is as close to 1 as possible.

Cost Performance Index (CPI)

A Cost Performance Index (CPI) may also be used by a project manager, in respect to BCWP. This will help in determining to what extent the actual cost is complying with the budgeted cost (Murch, 2004). A project that is perfectly operating within the budget is showed by a CPI index of 1; an under-budgeted project is shown by a CPI value of greater than 1; and when the budget cost is higher than the actual cost, the CPI is less than 1. The CPI index should, therefore, be kept close to one by the manager.

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