Earned Value Management

Earned Value Management (EVM) is a method for measuring a project’s performance. Earned Value Management is a complex task of controlling and adjusting the baseline project schedule during execution, taking into account project scope, timed delivery and total project budget. The method is useful during execution of a project because it tells us where we are going with schedule and costs, indicating any variance to plan.

Introduction

An important part of successful project management is to have accurate and reliable information and the current performance is the best indicator of future performance. By using trend data, it is therefore possible to forecast cost and schedule overruns early in the project.

Background

The Earned Value Management method was introduced in the 1960s as a financial analysis specialty in United States Government programs, but has since been a significant branch of project management. In the late 1980s and early 1990s, it was no longer used by EVM specialists only. The EVM was emerged as a project management methodology to be understood and used by managers and executives also, and today EVM has become an essential part of every project tracking.

The method can be used to measure the real progress of a project, and combines the measurements of the project management triangle: scope, time and cost. Thereby the EVM method provides early indications of expected project results based on project performance and highlights the possible need for corrective action. These indications become available to management as early as 20 percent into the project (Fleming).