Earned Value Management (EVM) is a statistical method that allows project managers to track the actual performance of the project against the planned schedule and budget. It provides an analysis method that permits the project to be measured by progress achieved:
- Performance Measurement: EVM enables real-time quantitative analysis of project performance, aiding in the identification of variances in the progression of a project versus its initial plan & scope.
- Cost Control & Forecasting: EVM offers a unique approach to budget control and cost forecasting. At any given point in a project's lifecycle, teams can compare the earned value (work actually accomplished) against both the planned value (planned work) and actual cost (resources consumed). These measurements provide key insights into the current costing position and the anticipated final cost.
- Risk Management: Providing a consistent and measurable methodology, EVM allows for early detection of potential risks and deviations, empowering project managers to make corrective actions swiftly.
Using the progress physically achieved to date, a project manager can re-forecast a project’s total cost and date of completion, either via trend analysis or utlising the project’s “burn rate”. This method relies on a key measure known as the project’s earned value.
Earned Value Management is a tool for capital project managers and owners to proactively optimize efficiencies, enhance cost savings, and take the guesswork out of project management through precision and predictive capability.
