Earned Value Management (EVM) is a technique for measuring project performance and progress. It involves establishing a performance measurement baseline at the start of a project based on its scope, schedule, and budget. Actual costs and schedule progress are then measured against this baseline through metrics like cost variance, schedule variance, cost performance index, and schedule performance index. EVM allows a project manager to identify any variances early to make corrections and periodically estimate expected final costs based on current performance. Following EVM best practices helps integrate project scope, schedule, and resources for improved management and predictability of project outcomes.

1. Earned Value Management is for
the management of “projects”
• A contract or a budget is a “project”
• A project has specific scope of work
• A project requires authorized budget
• A project requires a master schedule

2. Earned Value is 3 dimensional
Planned Value
1. What work has been authorized? (from PMS)
2. What is the budget for the work authorized?
Earned Value
3. What work has been accomplished? (from PMS)
4. What was the budget for work accomplished?
Actual Costs
5. What are the actual costs for the EV?

3. 1) Scope the entire project before...
You must define 100% of the project scope,
using a Work Breakdown Structure (WBS).

5. 3) Integrate all project processes
You must decompose the project scope
into manageable cells which integrates
scope + schedule + resources

6. 4) Plan and schedule the project
Earned value management requires scheduling:
1. A formal Project Master Schedule (PMS)
2. Vertical traceability (PMS to all schedules)
3. Horizontal relationships linked (CPM)

7. 5) Identify the measurement metrics
You must define how you will convert
Planned Value into Earned Value

8. 6) Plan and schedule the project
Earned value management requires scheduling:
1. A formal Project Master Schedule (PMS)
2. Vertical traceability (PMS to all schedules)
3. Horizontal relationships linked (CPM)

9. 7) Identify the measurement metrics
You must define how you will convert
Planned Value into Earned Value

10. 8) Form a project baseline
You must establish a time-phased
performance measurement baseline
made up from CAPs, providing the basis
for measuring project performance.

11. 9) Record project direct costs
You must inform the project managers
what they have spent…to compare against
the Earned Value
---the trend is to weekly measurement…of hours---

12. 10) Measure project performance
EVM requires 3 dimensional measurement:
• Planned Value
• Earned Value
• Actual Costs
• EV – PV = Schedule Variance (SV)
• EV ÷ PV = Schedule Performance Index (SPI)
• EV – AC = Cost Variance (CV)
• EV ÷ AC = Cost Performance Index (CPI)

13. 11) Periodic estimates at completion
You must periodically estimate
a statistical “range” of final cost results,
based on earned value performance data
---which provides the “early warning”---

14. 12) Manage all changes to the project
You must manage all changes to the project,
either approving or rejecting each change
and incorporating the approved changes
into a revised project baseline.

15. The “rewards” from the use of
Earned Value Management

16. # 1 You join a select group of projects
which are predicting their final results
from the 15% 20% completion point...
...in time to make a difference.

17. # 2 You will employ a “single”
management control system
to provide enterprise-wide data on
all capital projects
---the CPI is the common metric on any project---

18. # 3 You will use an “integrated”
management control system
to combine the project’s
technical + time + resources

19. #4
You will employ
“Management by Exception” (MBE)
principles to monitor performance
against the approved baseline
---the “CPI” and “SPI” constitute the exceptions---

20. # 5 You will know your project’s
true “cost efficiency”
the Cost Performance Index(e)
based on actual performance
---the CPI never completely recovers!!!---

21. # 6 You will know the project’s
Schedule Performance Index (SPI) to
isolate & quantify & manage the work
scheduled...but not performed

22. # 7 You can use
Earned Value Management data
to monitor the remaining effort
within management’s expectations

23. Earned Value provides
fundamental Project Management
You can practice good
project management without EVM,
you cannot practice EVM effectively
without good project management”