{"id":2993,"date":"2022-10-13T10:58:03","date_gmt":"2022-10-13T17:58:03","guid":{"rendered":"https:\/\/www.projectp.com\/ppblog\/?p=2993"},"modified":"2023-01-18T11:51:32","modified_gmt":"2023-01-18T19:51:32","slug":"earned-value-management-evm-whats-the-hype","status":"publish","type":"post","link":"https:\/\/www.projectp.com\/ppblog\/2022\/10\/13\/earned-value-management-evm-whats-the-hype\/","title":{"rendered":"Earned Value Management (EVM), What’s The Hype?"},"content":{"rendered":"\n

Earned Value Management (EVM) has existed for at least 50 years. In project-driven organizations, it is an essential measure of project performance and part of most project management policies. However, one of the significant barriers to the success of an EVM system is the notion that EVM is only valid for large complex projects. <\/p>\n\n\n\n

I used to think that as well, but over the past 4 or 5 years have seen, that while not perfect, it can be helpful on smaller, less complex projects and, when recognized as a Key Performance Indicator (KPI), can help organizations to take corrective action earlier in the project to prevent costly overruns in schedule and budget.<\/p>\n\n\n\n

EVM History <\/strong><\/h2>\n\n\n\n

There is no shortage of information about using earned value management (EVM) techniques to help organizations measure and control project performance. Every project management training organization, conference, and publication includes some discussion of EVM. Although elements of EVM existed in early 20th-century industrial engineering, it was in 1967 that one of the first organizations to formalize the idea, the National Defense Industrial Association (NDIA), published their EVM policy to help better manage increasingly complex defense programs. <\/p>\n\n\n\n

Since then, hundreds of guides and frameworks have been published to help individuals and organizations understand and implement EVM for their projects. Many organizations have made it part of their PMO (Project Management Office) policy, but often the measures are either ignored or \u2018hidden\u2019 from reports. Like so many things that are good for us, it is sometimes too difficult to implement.<\/p>\n\n\n\n

EVM Barriers to Adoption<\/strong><\/h2>\n\n\n\n

Organizations that resist using EVM to manage their projects may consider the discipline required to be \u2018overkill\u2019 and too difficult to implement for their smaller, less complex projects. I used to agree with that position, but over the past few years, I have changed my mind and have seen where organizations can benefit from even the most basic implementation of EVM. My experience is primarily associated with using Oracle Primavera P6 EPPM<\/a> to generate earned value performance indicators, and these are the examples that will follow, but the same principles can be applied using other project management software.<\/p>\n\n\n\n

When implemented and followed, EVM is a valuable tool for organizations to better understand and control their projects. When project managers and project sponsors pay attention to EVM KPIs, downward project trends can be addressed sooner in the project, and corrective actions can be taken to prevent projects from spiraling out of control.<\/p>\n\n\n\n

The Value Proposition for EVM Adoption<\/strong><\/h2>\n\n\n\n

Many organizations use a standard project status report template that relies on the subjective \u2018user-entered\u2019 Red-Yellow-Green indicators, narrative updates, and non-data-driven information. Something like this:<\/p>\n\n\n\n

Project Name<\/td>PROJECT A<\/td>Start Date<\/td>1\/1\/22<\/td>Finish Date<\/td>6\/30\/22<\/td><\/tr>
Budget<\/td>$100,000<\/td>Cost to Date<\/td>$45,000<\/td>Remaining Budget<\/td>$55,000<\/td><\/tr>
Scope<\/td>GREEN<\/mark><\/td>Schedule<\/td>YELLOW<\/mark><\/td>Budget<\/td>YELLOW<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Followed by a list of bullets:<\/p>\n\n\n\n