What is Earned Value Management - EVM? PM in Under 5

TL;DR

Earned Value Management (EVM) is a performance tracking system used by the US Department of Defense and many government programs to measure and manage project performance.

Transcript

in this video I want to answer the question what is earned value management or EVM earn fan management was developed by the United States Department of Defense in the 1960s to track the performance of its programs and to this day all government programs in the United States use earned value management as their means of measuring and managing perfor... Read More

Key Insights

• 📽️ Earned Value Management (EVM) is a widely used performance tracking system for projects, particularly in the US government sector.
• 📅 EVM provides measures of cost performance, schedule performance, and forecasts for future performance.
• 📽️ EVM combines cost and schedule data to gain a comprehensive understanding of project performance.
• 💦 The primary measures used in EVM are budget at completion, budgeted cost of work scheduled, budgeted cost of work performed, and actual cost of work completed.
• 📽️ EVM allows project managers to identify deviations from the plan and make adjustments to improve project performance.
• ❓ Forecasts generated through EVM include estimates to complete and at completion, as well as various variance calculations.
• 🫰 CPI and SPI are performance indexes used in EVM to assess cost and schedule performance, respectively.

Questions & Answers

Q: What is the purpose of Earned Value Management (EVM)?

The primary purpose of EVM is to measure and manage project performance by integrating cost and schedule data and providing forecasts for future performance. This helps project managers identify deviations and make informed decisions.

Q: How is the budgeted cost of work scheduled calculated?

The budgeted cost of work scheduled, also known as the planned value, is determined by multiplying the budget at completion by the proportion of the planned work to the entire project.

Q: What is the difference between the budgeted cost of work performed and actual cost of work completed in EVM?

The budgeted cost of work performed (earned value) represents the value of tasks completed according to the budget, while the actual cost of work completed reflects the actual money spent on completed tasks.

Q: What forecasts can be generated through earned value analysis?

Earned value analysis can produce forecasts such as estimate to complete, estimate at completion, cost variances, scheduled variances, variance at completion, cost performance index (CPI), and schedule performance index (SPI).

Summary & Key Takeaways

• Earned Value Management (EVM) was developed by the US Department of Defense in the 1960s to track program performance.

• EVM measures and manages project performance by analyzing authorized budgeted value, budgeted cost of work scheduled, budgeted cost of work performed, and actual cost of work completed.

• EVM combines cost and schedule performance, allowing for forecasts and calculations to understand project performance.