Nitin Mittal Senior Manager, Assurance and Risk Advisory at Perfect Accounting .and shared services Pvt. Ltd. Read more…
Time tracking has become a norm of late. Almost all the industries, from manufacturing to service, leverage time tracking software in project management. Whichever project we work on, we see time tracking as one of the activities that management focuses on. But why is time tracking becoming so important these days? Every now and then, we hear “Time is Money”. How does time tracking materialize into value, monetary or of some other form?
As a project manager, one has to quantify value creation through time tracking. Using a project management software, this is done through earned value analysis (EVA). Earned Value Analysis is one of the important techniques to monitor the project in different phases. EVA can be used to control project constraints like budget and schedule. In other words, EVA allows the manager to compare the amount of work completed against the amount that was expected to be completed at any given point in time. EVA can be performed at any stage of the project cycle which enables management to get early warnings about any potential threat to the project in terms of meeting the deliverables on time and tracking the project costs. This, in turn, allows management to review their budget and change their future course of action to use employee time tracking software get around these threats.
In general, EVA answers the following 4 questions.
EVA can be easily performed using the following steps.
PV = 50% * $10,000 = $5,000
EV = 40% * $10,000 = $4,000
SV = EV – PV
In the above instance, SV = $4000 – $5000 = -$1000
CV = EV – AC
In the above instance, CV = $4000 – $3000 = $1000
Schedule Variance (SV) and Cost Variance (CV) are considered as the basic indicators of the project progress.
In the end, we can conclude that as the basic indicators give us relatively important information about the project progress and free time tracking software, be it schedule progress or cost-efficiency, EVA is a significant technique for project management professionals. Since it can be used to monitor real-time project progress, it is a preferred tool for complex projects where the complexity is high.