Earned Value Management - EVM
Contents |
Abstract
Earned Value Management is a very powerful and popular project monitoring tool. Monitoring and controlling are key practices in project management, serving the purpose of informing the project managers on the advancement of the project. They take as inputs the results of the planning process and investigate if the plans are being implemented in an anticipated way. In this context, Earned Value Management is mainly used in highly complex environments like construction and infrastructure and allows for a combination of time and cost controlling (ISO 21500), therefore guaranteeing a more holistic overview of the project advancement than other monitoring tools.
This paper will firstly provide a description of the tool and its purpose including formulas and essential vocabulary. Then, it will provide a framework on how to apply this method. Lastly, it will look into its limitations, and explore the reasons why it is mainly used in very complex projects and environments [1]..
How to do Earned Value Management
“How is your project going?” is a very frequently asked question to project managers and one it’s not easy to answer. As pointed out by Lukas, Joseph A.2 one of the techniques that are frequently in project management is comparing the planned expenditure curve with the actual one. However, this approach can cause major errors and provide misleading information. As projects are complex processes that involve a large number of aspects and dimensions, controlling just one of these dimensions is reductive. For example, in this case, it is not clear if the work is being accomplished with less money than anticipated, or if the project is behind schedule. The scope of earned value management is to provide a bi-dimensional tool, that is able to plot both the time and cost dimension of the project, therefore providing a more holistic monitoring tool that in one single graph contains a large amount of information on the project.
