The assessment of project performance against the planned schedule and budget necessitates a quantifiable metric. This metric, obtained through specific calculations, provides a measure of the value of work completed to date. For instance, if a project budgeted at $100,000 is 50% complete, the calculated value of the work performed would be $50,000, regardless of actual costs incurred.
This form of assessment offers numerous advantages. It facilitates early detection of potential cost overruns or schedule delays, allowing for proactive corrective action. Furthermore, it provides a consistent, objective basis for reporting project status to stakeholders. Historically, it has evolved from basic cost accounting principles to become a cornerstone of modern project management methodologies, enabling more accurate forecasting and improved project outcomes.
