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Project is about to manage cost, not budged. EVM is about to associate cost to activities. So, what you describe, it does not mean, at lest in my understanding, is aligned with EVM
Good afternoon. I know MS Project has a Fixed Cost attribute for material. My organization is trying to gain 8-11% labor savings, so what I did in my project planning, I used MS Project and was able to create Summary tasks to isolate the material procurement from the labor. I did it in a way where I can create separate reports using filters.
I've grappled with that thought, that EVM and budget management are different things and should be reported on separately, but if feels like you won't get an accurate Estimate to Completion if materials aren't included.
Interesting question. Typically I only see EVM used to track labor, and not materials as it is used to measure progress, not cost. I can certainly see the value of including materials, particularly when they are consumables used over time. Using it for large one time expenses would tend to skew the data towards those events in my opinion, hiding the labor progress.
While a very valid business concern, I tend to think it falls more under the product owner domain than the PM. If a project is using more than the expected amount of materials the solution set isn't the same as when tasks are running long. Meanwhile, PMs do often play multiple roles. As an engineer and PM myself, I know that balancing performance goals with cost and schedule is a fact of life. It's part of the "scope" in the PM cost-time-scope triangle.
It all really depends on how you expect to use that data to make decisions. EVM is great in how it can be applied so broadly, but if you have a better metric for a specific problem, then by all means use it. If it's completely outside your control, then don't let it blur the data you're using to actively manage what you can control.
Agree with Joshua
Agree with Sergio.
You can consider the following:
If the material procured is part of the project, you could distribute the material cost to the duration of the project. For e.g. software license procured for a particular project is $1000, and if the duration if the project is 10 months. You can load the cost evenly as $100 per month for 10 months. If the material is used for multiple projects you could distribute the cost accordingly between projects. This way you will not load the cost upfront to skew the calculations. If the material procured is a capex, then the cost gets tracked elsewhere not in EVM. Hope this will help.
@Jason: "making the project look like it is far over budget" is just your imagine when you see project spends alot of money for purchasing. You should use EVM formulas to calculate CV or CPI and you will see the real performance.
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