What are the benefits of using Earned Value Management?
In a typical spend plan analysis,
physical progress is not taken into account when analyzing cost
performance. Instead, a project’s actual costs to date are
simply compared to planned costs, often with misleading results.
A task has a planned value (PV) of $1000, and actual costs (AC)
It appears this task has perfect
cost performance, and is in good shape to finish on-budget
However, if physical progress is
taken into account, the results may differ.
In Figure 2, the
project has spent $1000 in actual costs, but is behind schedule
and has only achieved
$750 of Earned Value.
This is called a
cost overrun, and this project would have a Cost Variance (CV)
From this example, we can see that
EVM expands on the two-dimensional analysis– “Has this project
spent more or less money than planned?”– by adding the third
dimension– “What did we get for the money we spent?"
For further reading, try this
free Earned Value
Successfully Presenting Earned Value is a free
e-book which will help you learn to implement and present Earned
Value schedules. It offers both an explanation of Earned Value
Management principles, and step-by-step instructions. This
e-book is offered at no charge. After reviewing it, you may be
interested in downloading our Milestones Professional software.
Milestones Professional was used to produce the
presentation-ready Earned Value reports shown in the e-book and
can be used to make schedules in many formats, including Gantt
charts, Milestone charts, Summary charts, Resource Charts and