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s announcement that muters should have to pay construction costs on Bay Area bridges. Maybe it takes the Terminator to help control costs! 26 Information Technology Project Management, Fourth Edition Earned Value Management (EVM) ? EVM is a project performance measurement technique that integrates scope, time, and cost data. ? Given a baseline (original plan plus approved changes), you can determine how well the project is meeting its goals. ? You must enter actual information periodically to use EVM. ? Earned Value Management Terms ? The planned value (PV), also called the budget, is that portion of the approved total cost estimate planned to be spent on an activity during a given period. ? Actual cost (AC), is the total of direct and indirect costs incurred in acplishing work on an activity during a given period. ? The earned value (EV), is an estimate of the value of the physical work actually pleted. It is based on the original planned costs for the project or activity and the rate at which the team is pleting work on the project or activity to date. ? Rate of performance (RP) is the ratio of actual work pleted to the percentage of work planned to have been pleted at any given time during the life of the project or activity. 27 Information Technology Project Management, Fourth Edition Earned Value Calculations for One Activity After Week One 28 Information Technology Project Management, Fourth Edition Project Portfolio Management ? Many anizations collect and control an entire suite of projects or investments as one set of interrelated activities in a portfolio. ? Project portfolio management has five levels: 1. Put all your projects in one database. 2. Prioritize the projects in your database. 3. Divide your projects into two or three budgets based on type of investment. 4. Automate the repository. 5. Apply modern portfolio theory, including riskreturn tools that map project risk on a curve. 29 Information Technology Project Management, Fourth Edition Benefits of Portfolio Management ? Schlumberger saved $3 million in one year by anizing 120 information technology projects into a portfolio. ? META Group research shows that: ? Organizations that evaluate information technology projects by what their business impacts are and what their potential business values will be implement projects that result in 25 percent more improvement to the bottom line. ? By 20232023, more than 50 percent of the CIOs for Global 2023 panies will adopt project portfolio management tools and techniques for IT projects, asset management, and budget planning and monitoring. ? Business executives state that using project portfolio management allows managers to make decisions faster and with more confidence 30 Information Technology Project Management, Fourth Edition Using Software to Assist in Cost Management ? Spreadsheets are a mon tool for resource planning, cost estimating, cost budgeting, and cost control. ? Many panies use