Newsletter – Let's Talk Earned Value Management
It's simply a project performance measuring tool that shows whether the work done is keeping up with the money spent. That's all Earned Value Management (EVM) does, it compares what you planned, what you achieved, and what you spent to show whether your project is performing well or not.
If you've spent long enough in project controls, you'll know that schedules and cost reports often tell different stories. The planner says we're on track; the quantity surveyor says we are burning cash too fast. Somewhere between the two, lies the truth; enters – Earned Value Management (EVM).
Earned Value Management: Web Overview
Feature by Rahul Pun
What Earned Value Management measures
Earned Value Management gives planners, quantity surveyors and project managers a common way to compare progress and cost at the same reporting date. Planned Value is the budgeted value of work scheduled by that date. Earned Value is the budgeted value of work actually completed. Actual Cost is what was spent to complete that work.
What to do when the measures diverge
If earned value is below planned value, the team has completed less work than planned. If actual cost is above earned value, it has spent more than budgeted for the work completed. These comparisons help teams spot deterioration early, investigate the causes and discuss whether forecasts or corrective actions need to change.
Putting the measures to work in Primavera P6
Rahul recommends building a realistic, resource- and cost-loaded programme, setting a baseline and keeping progress and cost data current. With the right inputs and configuration, P6 can track earned value and report schedule and cost performance indicators. The measures are most useful when the team agrees how progress is measured and reviews the results together.
The original LinkedIn edition also includes project and staff news and a Chinese version.