Ariba Implementation at MED X: Managing Earned Value

1697 Words Feb 21st, 2015 7 Pages
Case Study II.
OPIM 5668 Project Risk and Cost Management (GROUP III)

18 Feb 2015

Executive Summary:
MED-X, a Fortune 500 pharmaceutical company with headquarters in Houston, Texas with 54 plants and more than 40,000 employees world-wide, has undertaken a $2 million Ariba e-procurement project implementation. MED-X was spending $3 billion annually on indirect goods and services. It is estimated that implementation of the Ariba e-procurement system will save the company $200 million annually and also reduce spending, streamline the procurement process and expedite user adoption. An additional benefit of the project is going to be nationwide
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By determining if cost (AC), schedule (PV), and work accomplished (EV) are progressing as planned, we created an integrated performance report which uses consistent, numerical indicators (like CV, SV, CPI, SPI, etc.) to evaluate Ariba Implementation project and compare its process with the estimated plan.
In this case, we need to investigate the status of the MED-X implementation project. The method we adopt is EVM, Earned Value Management. Earned Value Management is a project management technique for measuring project performance and progress. We measure the project performance not only as a whole, but also by performance of its components.
We used PV (planned Value), AC (actual cost), and EV (earned value) to calculate SPI (schedule performance index), SV (schedule variance), CPI (cost performance index), and CV (cost variance). Among these indicators, SPI and SV show whether a project is behind schedule or not, and CPI and CV indicate whether a project is under budget. Therefore, the statuses of the schedule and cost of technical infrastructure, software customization, and combined projects can be easily and clearly checked, respectively.
MS Excel is the main software we used in this analysis, and all the information came from the case.
In order to understand why the project could not be
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