Editing Earned value management (section)

== Overview ==
Earned value management is a project management technique for measuring project performance and progress. It has the ability to combine measurements of the [[project management triangle]]: [[Scope (project management)|scope]], time, and costs.

In a single [[System integration|integrated system]], EVM is able to provide accurate forecasts of project performance problems, which is an important aspect of project management.

Early EVM research showed that the areas of planning and control are significantly impacted by its use; and similarly, using the methodology improves both scope definition as well as the analysis of overall project performance. More recent research studies have shown that the principles of EVM are positive predictors of project success.<ref>Marshall, Robert. ''The Contribution of Earned Value Management to Project Success of Contracted Efforts''. Journal of Contract Management, 2007, pp. 21-331.</ref> The popularity of EVM has grown in recent years beyond government contracting, a sector in which its importance continues to rise<ref>
{{cite web
| title = KM Systems Group Announces First Annual wInsight Industry Group Conference – "WIGCON": Earned Value Management (EVM) is an important tool for improving Department of Defense, Federal Agency, and Government Contractor Project Performance
| publisher = [[Dow Jones & Company]]
| website = [[MarketWatch]]
| date = 21 September 2011
| url = http://www.marketwatch.com/story/km-systems-group-announces-first-annual-winsight-industry-group-conference-wigcon-2011-09-21
| access-date = 15 November 2011}}</ref> (e.g. recent new [[DFARS]] rules<ref>
{{cite news
| title = New federal contracting rules can help or hurt, says former contracting officer
| newspaper = Huntsville Times
| date = 23 September 2011
| url = http://www.al.com/42/index.ssf/2011/09/new_federal_contracting_rules.html
| access-date = 15 November 2011}}</ref>), in part because EVM can also surface in and help substantiate contract disputes.<ref>{{cite news
| title = U.S. Penalizes Huntington Ingalls
| agency = Reuters
| date = 11 November 2011
| url = http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=defense&id=news/awx/2011/11/11/awx_11_11_2011_p0-393081.xml&headline=U.S.%20Penalizes%20Huntington%20Ingalls
| access-date = 15 November 2011
}}{{Dead link|date=December 2019 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

=== EVM features ===
Essential features of any EVM implementation include:
* A [[Schedule (project management)|project schedule]] that identifies work to be accomplished. Sometimes incorrectly called a [[Project plan|Project Plan]].
* A valuation of planned work, called planned value (PV) or [[budgeted cost of work scheduled]] (BCWS)
* Pre-defined "earning rules" (also called metrics) to quantify the accomplishment of work, called earned value (EV) or [[budgeted cost of work performed]] (BCWP)
* Actual Cost which is also known as Actual Cost of Work Performed (ACWP)<ref>{{Cite web |url=https://pmstudycircle.com/2012/05/planned-value-pv-earned-value-ev-actual-cost-ac-analysis-in-project-cost-management-2/ |title=Planned Value (PV), Earned Value (EV) & Actual Cost (AC) in Project Cost Management &#124; PM Study Circle |access-date=2020-10-04 |archive-date=2020-09-26 |archive-url=https://web.archive.org/web/20200926091526/https://pmstudycircle.com/2012/05/planned-value-pv-earned-value-ev-actual-cost-ac-analysis-in-project-cost-management-2/ |url-status=dead }}</ref>
* A plot of project cumulative costs vs time especially to show both early date and late date curves

EVM implementations for large or complex projects include many more features, such as indicators and forecasts of cost performance (over budget or under budget) and schedule performance (behind schedule or ahead of schedule). Large projects usually need to use quantitative forecasts associated with earned value management.{{sfn|Project Management Institute|2021|loc=2.8.7 Checking Results}} Although deliverables in these large projects can use adaptive development methods, the forecasting metrics found in earned value management are mostly used in projects using the predictive approach.{{sfn|Project Management Institute|2021|loc=2.8.7 Checking Results}} However, the most basic requirement of an EVM system is that it quantifies progress using PV and EV.

=== Application example ===
Project A has been approved for a duration of one year and with a budget. It was also planned that the project spends 50% of the approved budget and expects 50% of the work to be complete in the first six months. If now, six months after the start of the project, a project manager reports that he has spent 50% of the budget, one may presume that the project is perfectly on plan. However, in reality the provided information is not sufficient to come to such a conclusion. The project can spend 50% of the budget, whilst finishing only 25% of the work, which would mean the project is not doing well; or the project can spend 50% of the budget, whilst completing 75% of the work, which would mean that project is doing better than planned. EVM is meant to address such and similar issues.