Basic concepts of earned value management evm this article provides an introduction to the basic concepts of earned value management evm, from initial project planning through execution including data analysis techniques and baseline revisions. The project team determines an equivalence between scope, schedule, cost to do this. The basic premise of earned value management evm is that the value of a piece of work is equal to the amount of funds budgeted to complete it. To guide you with the creation of an outstanding earned value analysis, we have listed several examples of earned value analysis in pdf. Jason led new program start ups where he was responsible for mentoring program teams to facilitate successful pro. Earned value is a wellknown project management tool that uses information on cost, schedule and work performance to establish the current status of the project. This publication provides guidance at both the foundation and the practitioner level. Many practicing professionals find the earned value terms and definitions confusing. Earned value analysis is the current buzzword for effective project control. Earned value analysis is a project management tool that monitors the amount of work accomplished and compares this to the original plan to help determine if a project is on track. Earned value terminology lets start out by clarifying the terminology associated with earned value, because many people incorrectly use. Earned value management to better understand earned value management, lets take a look at how earned value management compares with traditional management.
With the eva, the planned and current costs of a project are identified on any desired reporting date, as well as the earned value, as well as other figures like time and cost efficiency. Eva provides a singular view of scope, schedule and cost. It measures the project progress and helps in identifying the critical activities thereby. It takes into account multiple variables like cost schedule and resource to present a. The earned value analysis eva is a project controlling procedure and is one of the key performance indicators of a project, like the cumulative flow diagram. Earned value management 1 earned value management evm is a project management technique that objectively tracks physical accomplishment of work. Earned value example is based on a simple software development project i explain in a short video.
Earned value analysis schedule and cost variance schedule variance. In earned value analysis eva everything is measured and reported as money or monetary equivalent. It is the financial look at what work was budgeted to be completed by now, what the budgeted cost. Earned value analysis or earned value management is considered to be one of the more difficult concepts of project management. Each side is of equal length and you estimate that each side will contain the same material and labor costs as well as take the same amount of. Here are some of the solved problems to demonstrate use of for earned value management which could be beneficial to pmp aspirants. Jason has over 15 years experience in program management specializing in earned value management. You expect the factors for cost variance to continue in the same way in future. As we showed you during the introduction, earned value analysis requires four things to be set up during the project planning phase.
Primavera p6 enables you to control project progress and performance using earned value management technique. Particularly, it focuses on the progress measurement by applying the earned value management evm. Earned value mangement for dummies, deltek special edition. In the above chart, the task or project is behind schedule and over budget, often expressed as cost variance earned value less actual cost and schedule variance earned value less planned value.
This article gives an earned value management example, explains earned value management formulas, analysis, and chart. Earned value exercise 7 lets look at a simple example to see how earned value is calculated and used. Earned value management example problems milestonetask. These downloadable examples can be your references if you want to begin the drafting phases of your analysis document.
The cost management focuses on the cost performance of the project. As part of evm, you use the following information to assess your schedule and cost performance throughout your project. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Take note that the entire point of doing an earned value analysis is so that you you are able to keep track of a projects progression so that you are able to guarantee its completion. Evm integrates the scope, schedule, and cost of a project. It looks at the relationships between the earned value ev and the actual cost ac. Apm guidelines 2008 provide guidance on the approach at a foundation level. Jason kinder is director of product marketing for epm enterprise program management at deltek. It represents the effort of practitioners, academics and other stakeholders who have all given their time, knowledge. Earned value management explained on a simple example. When you collect the earned value data for your project, you get the following data. Earned value management terms and formulas for project.
Evm is used to track the progress and status of a project and forecasts the likely future performance of the project. In construction industry earned value analysis eva is the one of the most popular and standard method of measuring a works progress at any given time, also forecasting its final date of completion and completion cost. The problem is that majority of those who are in charge of these projects arent able to manage every aspect that would ensure its completion. There are 7 steps to performing earned value analysis effectively.
The schedule management focuses on the schedule performance of the project. Analysis of the earned value management and earned. Earned value management evm is a systematic process used to measure project performance at various times throughout a. Complete schedule risk analysis for remaining work, estimate work remaining. A job analysis will gather and analyze information about the content and the human requirements of a job, as well as the context in which the jobs are performed. For this project, because this is an example we will simply produce all of the earned value metrics in one table. Earned value analysis project management milestonetask.
A simple example of earned value management evm in action. The intent is to inspire an appreciation for the earned value concept and emphasize how performance measurement techniques can be a valuable management tool. Pdf project management through earned value management. Earned value measurements problems pmp math practice. Rating is available when the video has been rented. Let us understand equivalence by the following example.
Cdc unified process practices guide earned value management up version. It is expressed as the difference between the budgeted cost of work scheduled planned value and the budgeted cost of work performed earned value. The intent is to inspire an appreciation for the earned value concept and emphasize. It focuses on the two main variables that are inevitably crucial for every project. How to use earned value management in primavera p6. Schedule variance sv is a measure of schedule performance of the project. Earned value analysis is an important tool in analyzing the performance of any construction project. While schedule recovery may yet be possible, the cost. Earned value analysis is a recommended technique for monitoring and controlling project execution.
Ev qualifications are currently offered at two levels. Earned value management evm worked example tutorial. Pdf analysis of project performance using earned value. You have the wbs and have identified the activities. There is an important and fundamental difference between the data available for analysis in a traditional management environment as compared to an. Each side is of equal length and you estimate that each side will contain the same material and labor costs as well as take the same amount of time to complete. In this tutorial, i will show you how to use earned value management in primavera p6. Brief introduction to earned value management evm 122506 evm introduction 2 122506 evm introduction 2. The act of analyzing will tell you everything from the projects current state, the amount of work. Earned value analysis explained for project management. Pdf earned value method as a tool for project control. This article provides an introduction to the basic concepts of earned value management evm, from initial project planning through execution including data analysis techniques and baseline revisions. In general most of the earned value analysis problem in the pmp exam come with a brief story and some additional data.
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