Earned Value Management

Earned Value Management (EVM) is a technique which integrates (ie pulls together) Project Schedule and Cost management into one monitoring and control system.It originated in the US Department of Defence in the 1960s where it was called Cost Schedule Control System (CSCS) or CS²

Essentially EVM allows us to solve the project monitoring issue presented in the simple project budget chart seen above.

At “time now” (ie any time we are looking at the graph) what is the progress of our project?

We are looking at a point during June and the graph and data is telling us that we are under budget.

Fantastic, right? That Project Manager really knows his stuff, pity we don’t have more like him.

However the graph doesn’t tell us whether our Project Manager has managed to complete all of the work that was scheduled to be completed by this time i.e. whether we are behind schedule which, would explain the budget figure. We also don’t know whether the actual work that has been completed has cost us more than planned which would mean that we are both over budget and behind schedule.

Using EVM allows us to set indicators which would tell us the answers to both of these questions. It also allows us to calculate the final budget to complete throughout the project based on our current performance and this feature gives us a useful predictive capacity in our projects.                               

Quite Common to see this technique mandated for use by Contractors working on Australian Defence Department projects. Many private PM organisations also utilise EVM

This technique is covered in more detail in our Online Diploma of Project Management Program