Earned Value Project Management. A model for project performance valuation in Ericsson AB.

Abstract

Recently, companies increase the usage of projects in their businesses, thus corporations are facing the issue of project valuation. Multiple techniques are dealing with this problem, however, it is questioned which one provides with the best results. This thesis examines the earned value method for project performance valuation. The main purpose of the present study is to evaluate the earned value method, as well as to design a guide of the theory and practice behind earned value method. Additionally, a template model of the earned value is provided. The model is tailor made for the needs of Ericsson AB, but is also designed to suit all types of projects within profit organizations. Theoretical results indicate that the earned value is a technique that provides with the most realistic and complete picture of the health of the project. Even though, theory supports the statement that the earned value is the best method for project performance valuation, it discloses a number of costs associated with the discussed technique. The empirical part of the study provides with a model, through which a solution to some of the problems connected with the method is suggested.