Earned Value Management

EVM 10:00

Overview

What Is this chapter about?

Earned Value Management integrates the assessment of current results, deadlines, and costs. Based on the current status of task implementation (value generated), the time and cost required to achieve the objective are assessed. This enables early action to ensure delivery on time and within budget.

To whom is this chapter primarily addressed?

In small projects, the project manager monitors progress, determines earned value, and develops corrective measures. In larger projects, this responsibility is typically assigned to a project controller or a project management office.

What is the significance of the process discussed in the chapter?

Early and continuous monitoring of progress using earned value, combined with deadline projections, enables timely identification of problems and corrective action. This ensures a constant focus on the project goal and supports meeting the sponsor’s requirements and expectations.

How does the process work in practice?

The first step is to assess what has been achieved within a given period and with what level of effort. Actual results are compared with planned results. Trend analysis of reliable intermediate results supports deadline assessment. Cost and liquidity control enable evaluation of the project’s further course and corrective action.

What are the main challenges?

Calculating generated value and forecasting its development is difficult. Optimistic assessments should be replaced by conservative estimates. Payment plans and actual expenditures often diverge—continuous monitoring and double-entry bookkeeping are essential.

What are the key success factors in this process?

Honest assessment of actual results and accurate financial reporting are essential for evaluating progress and forecasting outcomes. The project manager’s judgement is critical when selecting corrective measures to achieve the project goal.

Goal

The objective of Earned Value Management is to measure project progress to achieve the objectives defined in 07:00 Planning & Scheduling (P&S), while taking unplanned events into account.

Deviations from the plan that exceed minor adjustments trigger further steps in the 14:00 Change Management (CM) and/or 12:00 Problem Solving Management (PSM) processes.

EVM reports enable the project manager and the project team to identify deviations from planned performance within a given period, monitor project progress, and forecast further developments, including deadlines and costs. This information may also be made available to other project stakeholders, enabling them to plan project-related activities more effectively.

Process

As part of this process -the current status of the project is first determined in order to forecast its further course. Once deviations are identified,corrective actions are initiated to minimise risk and increase the likelihood ofachieving the project objectives.

Lecture notes

Download EVM EN.pdf