What is Earned Value Management?
Earned Value Management is a project control process based on a structured approach to planning, cost collection and performance measurement. It facilitates the integration of project scope, time and cost objectives and the establishment of a baseline plan for performance measurement.
The establishment of a Performance Measurement Baseline (PMB) is essential to conducting successful EVM and consists of:
- Defined scope and assumptions
- Activities scheduled in logical sequence
- Resources / costs (labour and materials)
What Do We Need To Know?
- What is the plan?
- What has the project achieved?
- What has been spent to date?
How does Earned Value help you manage?
- It provides data to measure project status objectively
- It provides a basis for estimating final cost
- It predicts when the project will be complete
- Supports the effective management of resources
- It helps manage and control change
It enables informed and effective decision making by knowing:
- What has been achieved of the plan;
- What it has cost to achieve the planned work;
- If the work achieved is costing more or less than was planned;
- If the project is ahead or behind the planned schedule.
Good planning leads to good project execution and good management information. Poor planning can lead to poor execution and poor EVM information. The plan must be maintained in accord with authorised project changes. EVM will accurately show deviations from the plan, but it may not be immediately evident that a flawed plan is being tracked.
Benefits of Earned Value Management
EVM is the best way to determine the real status of a project. As well as telling you how much you have spent, it shows you how much you have achieved. Further, it tells you how much you still need to do and provides a good indication of final costs and expected completion dates.- EVM builds on, and therefore enforces good Project Management practice and underpins good corporate governance. Its introduction can drive the cultural and organisational change key to supporting these objectives.
- EVM provides an objective measurement of what has been achieved on a project.
- EVM enables accurate forecasting.
- EVM provides project management information in a format that is easy for all stakeholders to understand and act upon.
- EVM is an Early Warning System that allows the timely identification and analysis of progress and cost issues and corrective actions to be identified.
- EVM shows stakeholders whether they’re getting Value For Money.
- EVM enables detailed project comparisons across programmes.
- EVM can be used on a wide range of project sizes and complexity.
(APM Body of Knowledge 5th Edition)
In this section
| Earned Value Management | |
| What is Earned Value Management? | |
| Further Information on Earned Value Management | |
| Public Exams | |
| Successful Candidate Register | |
| Frequently Asked Questions |
