Earned Value Management (EVM) is a systematic project management process which helps managers to measure project performance. EVM is a technique that is used to track the performance of a project against the project baseline and is very effective assuming the project baseline has been accurately calculated.
Earned Value Management works by assessing work progress against a project baseline and covers technical, time and cost performance. It provides data which accurately defines where a project is going so that proactive managers can act, giving them greater scope for decision making.
Benefits of Earned Value Management:
- EVM provides one reliable central data source, which results in faster reporting cycles offering more time for analysis.
- All authorized work is integrated using a product-oriented work breakdown structure. This helps to coordinate the contributions from each department and ensure that work, schedule, and cost are properly integrated.
- Managing issues highlighted as areas of concern helps management to focus on the most critical issues. This clearly defined process reduces the risk that something will be overlooked.
- Significant cost and schedule variances are detectable when planned work has reached as little as 10% completion on any portion of the project. This means a projects performance and productivity issues can be identified early in a project’s life.
- EVM monitors budget, schedule and scope, accurately measuring performance and predicting the future of the project’s performance.
- EVM can be reported in real-time offering Mangers and stakeholder early warning signs to a project going off track.
- EVM is time-phased, therefore the more regularly that it is checked and calculated, the more likely a successful outcome for your project.
Earned Value Management removes the guesswork from project performance by providing accurate, empirical data from which decisions can be based upon. EVM seamlessly integrates data throughout a project into a single system, improving both the scope definition as well as the analysis of the overall project performance. With EVM you can predict the future project performance more accurately while alleviating risk and satisfying stakeholders and management.