Project Management For Dummies®

Chapter 19. Monitoring Project Performance with Earned Value Management

In This Chapter

• Understanding Earned Value Management

• Interpreting variances

• Approximating an activity's Earned Value

Because you're reading this chapter, I assume you're looking for a way to assess your ongoing project performance. Earned Value Management (EVM), formerly called Earned Value Analysis (EVA) is a technique that helps determine your project's schedule status and cost status from your resource expenditures alone. EVM is particularly useful for identifying potential problems on larger projects.

To get the most from this chapter, you should have some prior experience or knowledge in project management. This chapter helps you better understand EVM by defining it, discussing how to determine and interpret variances, and showing you how to use it in your project.

Defining Earned Value Management (EVM)

Monitoring your project's performance entails determining whether you're ahead or behind schedule and over or under budget. However, just comparing your actual expenditures with your budget normally can't tell you whether you're over or under budget. With EVM, you can assess your project's schedule and expenditures based on your expenditures to date.

In this section, I explain many of the terms you may encounter when you do an EVM analysis.

Understanding the EVM formulas

Suppose you're three months into your project and you've spent $50,000. According to your plan, you shouldn't have spent $50,000 until the end of ...