Modeling and simulating the dynamics in project monitoring and earned value analysis

Project monitoring is one of the important activities in the management of a project and its main objective is to supply the necessary information for proper control of the project based on the project plan. Monitoring of a project covers different issues related to costs, resources, problems, progress etc. All these issues are dependent on many other sub‐issues and any changes in any of them influences the whole project monitoring system. EArned value analysis is one of the tools used for monitoring the progress and costs of the project is composed of several factors. In the present work, the activity of project monitoring has been treated as a general system and earned value analysis as a specific system for modeling and simulating the dynamics involved therein. System dynamics methodology has been applied for this purpose. A case study has been conducted on a real‐world software project in an IT organization. The results show that the system of earned value analysis is highly influenced by the variations in the estimated cost of unit effort, delay in an activity and estimated effort of work package.