Business Studies Project Analysis on Tree Trimming

Tree Trimming Project Analysis

Introduction

Applying the concept of earned value in project management can be helpful in avoiding additional costs in terms of time and money. In Johnson’s tree trimming project, determining his rate of adherence to the project schedule is difficult with the available information. Efficient project management requires description of project scope in terms of the activities involved, the costs and the timelines for project completion. With the available information it is difficult to determine whether Johnson is on course due to the lack of timeline information. The project details give the amount of work done in five days and the cost without reporting on the planned work schedule. From this information, it is impossible to tell whether Johnson was over, on or below the schedule.

Earned Value concepts

Since Johnson has had the opportunity to attend classes on earned value concepts in project management, it can be deduced that he is not applying the concepts in their entirety. According to Czemplik (2014), project management entails various key features which must be present even in the most basic approaches to EV management. The first is that there has to be a project plan. In Johnson’s work, there is no clear project plan. A project plan should identify the type of activities within the scope of the work involved. The work has to be defined hierarchically through the use of a work breakdown structure.  The hierarchical description of work is aimed at structuring the work plan according to the priorities associated with each of the activities. In Johnson’s plan, the work activities are in no structured format, all the activities are bundled as ‘Christmas tree trimming,’ and have no planned time lines. This makes it difficult to determine whether the work is on course or out of schedule.

The concept of planned value also has to be considered when applying earned value in project management. In Johnson’s work, this has not been effectively put in place. For instance, although the number of trees is used to determine the summative cost of the work done, there are no cost variables that can be used to determine costs when the work required deviates from the norm. An example is the shape of trees. There should be clear definitions of the type of work done and the respective costs. The schedule variance can only be calculated when there is a planned value relative to an actual accomplished value. In the work of Johnson, there is no clarity of a planned value. This implies that the project is being done speculatively and whatever is achieved passes as long as the work is completed. There is no clear order in which activities have to be pursued, neither is there a timeline in which each activity is to be accomplished. The value calculated by multiplying the percentage of work accomplished by the total project cost does not reflect a planned value.

As much as Johnson and his team have made efforts to apply some principles of earned value such as planning their work during the summer holidays, they are yet to achieve the full extent of its benefits. For instance, there are principles of project tracking that can be used by Johnson and his company to set up the schedule and the cost variance. Czemplik (2014) describes project tracking as a process that involves laying down a time phased plan for project spending. From this point, a cumulative budget for the project is laid down as a function of the project duration. The actual costs incurred can then be recorded and then the work done within the recorded timelines also have to be indicated. In this way, he can be able to tell whether the schedules set are realistic. The schedule variance can be calculated by deducting the planned value in terms of the schedule timelines from the earned value in the same parameters. Each of the activities in the entire project should have an associated value, from which the cost variance can be established. The schedule performance index is calculated as a ratio of the earned value to planned value. Each of the values is based on a latest possible completion date basis. By conducting an initial project tracking activity, Johnson will be able to know whether he is fully utilizing the available resources or not and whether he works on the project in accordance with earned. This will help him in giving project value estimations in the future.

Agile EVM

When there is only variable in terms of the project requirements, the traditional approach to earned value evaluation may suffice. However, when the parameters of performance evaluation are increased, the agile EVM process is considered to be the most suitable. For instance, in Johnson’s case, the standard operation involves trimming the tree to a cone shape. When the shape of the tree is changed, an iterative procedure of earned value evaluation, which is synonymous to agile EVM needs to be applied. Sulaiman (2007), reports that agile EVM is an effective approach to obtaining data to be used for informed decision making. The process is incremental and iterative hence is a valuable approach to decision making where the variables are diverse. Agile EVM helps to deliver more complex projects much easily and more successfully in comparison to the traditional EVM. For instance, shaping the Christmas trees in a different manner can be challenging when the workers are used to the cone shaped Christmas trees. The work may be slow or may lead to losses. With agile EVM, repetitive evaluations have to be conducted before deciding on the most suitable approach.

Johnson can use the agile EVM strategy by first gathering and prioritizing all projects. This can be of assistance in establishing project timelines and thus outlining the project’s planned value in terms of time and costs. From the prioritization of the tasks, the planned value can then be determined based on the relative sizes of the different tasks entailed in the project. This can be done by allocating story points to each of the tasks in the project schedule and working with a clearly defined earning rule. In the agile EVM process, there is only one earning rule which dictates that no item is done until all its criteria are fulfilled (Sulaiman, 2007). It is only then that the task would earn story points and the actual earned value be calculated. Based on this process, Johnson will be able to establish both actual and planned earned values. Through this approach, Johnson will be able to know the planned as well as the actual earned values and can thus determine whether the project performance was satisfactory or not. A satisfactory project performance has a schedule performance index of at least 1 and a budget variance of 0 or less (Reichel, 2006). As it is now, it is difficult to quantify the performance record set by Johnson and his crew.

 

 

References

Czemplik, A. (2014). Application of earned value method to progress control of construction projects. Procedia Engineering, vol. 91, p. 424- 428. Retrieved from www.sciencedirect.com/science/article/pii/S1877705814031051

Reichel, C. W. (2006). Earned value management systems (EVMS): You too can do earned value management. Paper presented at PMI Global Congress 2006—North America, Seattle, WA. Newtown Square, PA: Project Management Institute. Retrieved from www.pmi.org/learning/library/earned-value-management-systems-analysis-8026

Sulaiman, T. (2007). Agile EVM: Earned value management the Agile way. Agile Journal. Retrieved from www.web.archive.org/web/20100221074230/http://www.agilejournal.com/articles/columns/column-articles/210-agileevm-earned-value-management-the-agile-way