Earned Value Project Management (EVM)

Improving Project Management through using Earned Value

Earned Value  Management is a means by which projects can improve delivery performance through accurate cost and schedule performance information, thus  increasing the focus on schedule and budget performance and goals.

The origins of Earned Value  Management (EVM) embody Project Management 'best practices' in project planning and performance measurement.  EVM provides meaningful performance management information to project teams to inform their decision making. The principles of EVM represent best practice project control in project-based management.

Earned Value  Management is at the heart of the project control systems applied by the governments of the UK, USA and Australia, to help manage the performance of major suppliers engaged on development contracts. It is also widely used in other industries such as Construction and Oil & Gas.

Implementing Earned Value Management Systems (EVMS)

For organisations implementing an Earned Value  Management System, the challenge lies not just in the mechanics of the method, but more often in the cultural change required to underpin an EV based project control system.

PMIS has been involved in implementing formal EVM Systems on major projects in the UK since 1993, enabling us to develop a 4-phase approach, which is designed to create an environment where open communication can flourish.

This 4-phase approach is supported by a detailed step-by-step framework that builds a solid foundation for the resulting EVMS. It is designed to ensure that the Earned Value Management System is sufficiently robust to complete an Integrated Baseline Review  successfully.

Phase 1 – Initialisation

The objective is to establish a sound understanding of Earned Value  Management among those responsible for project delivery, so that they may establish the work and organisational framework by which the project will be managed.

Phase 2 - Data Integrity

The objective is to use the defined project framework and processes, to ensure the vertical & horizontal integrity of plans, to create an EVM Performance Measurement Baseline, which is the cornerstone of an EVM System.

This phase will result in the formal authorisation of the Performance Measurement Baseline, an essential step to achieving a successful Integrated Baseline Review.

Phase 3 - Data Maturity

The objective is to create a dynamic planning environment supporting the continuous use of EV performance data and maintaining effective control of project changes that impact upon the project baseline.

Phase 4 - Decision Support

The objective is to embed EV data into the practice of daily management of the project, leading to an improvement in decision-making based upon an informed analysis of real project status.

Creating an Earned Value Management Requirement

Customers increasingly require contracts to be pro-actively controlled to assure delivery on time, to budget and to specification. Customers look for confidence in the project status information being supplied, and are increasingly achieving this by defining contractual agreements that require Earned Value  Management to be used by their suppliers.

The experience of our staff in developing contractual frameworks for Earned Value has proved valuable to clients. The major considerations include:

• defining and communicating your EV requirement including the incorporation of the Integrated Baseline Review process

• assessing the merits of payment by EV

• determining appropriate data access requirements

• defining performance review cycles and processes

What is an Integrated Baseline Review?

The purpose of an Integrated Baseline Review (IBR) is to assess a set of project management processes and to establish the degree of risk associated with the project’s Performance Measurement Baseline plan delivering on time, to budget and to specification.

Where it is important to have confidence at an early stage that the baseline plan for a project is realistic and capable of delivery, an Integrated Baseline Review may be deployed.

Preparing for an Integrated Baseline Review (IBR)

If you are required to perform  an Integrated Baseline Review, our Earned Value Management specialists will support and guide you on how to prepare for it. This can include:

• IBR training

• implementing an effective project communication programme

• interview preparation & coaching of executives, managers and selected members of the project team

• reviews of project documentation and data integrity

We will work closely with you and your customer to ensure that the Integrated Baseline Review objectives and measures of success are reasonable and appropriate to the nature of contract being undertaken.

Email today to find out more on how to conduct a successful Integrated Baseline Review.

Related Pages:

Earned Value Management Training
Earned Value Management Implementation Support

Further Project Management Training Courses

Links, Downloads and References

For more information on the principles of Earned Value  Management and how it is applied.

UK MoD: Strategy for mandating / using EVM

US Department of Defence EVM
PMI College of Performance Measurement
NASA EVM
Australian Department of Defence EVM
 
References

UK MoD Commercial Policy Guideline No.8 – Earned Value Management – Commercial Issues (Nov 2004)

US NDIA ANSI 748 – A Standard for Earned Value Management Systems – Intent Guide (Jan 2005)

About PMIS:

PMIS is a leading specialist provider of project management training, Prince2 training, APMP training course, project risk management training, benefits realisation training. Whether you are looking for public or tailored project management training, PMIS provides first-class earned value training, project management courses, IT project management training, and project manager certification.