Earned Value Management

Jerry Robbins, MEng

EVM in Practice

Tools

  • Microsoft Project 2007
  • Microsoft Excel 2007

Prerequisites

There are some absolute prerequisites to ensure success with EVM:

  • Complete WBS
    • It is essential that all the work to be done is accounted for. If not, the project will likely fall behind due to unforeseen or unexpected delays due to the extra work. This list of work items should be deliverables-oriented.
  • Accurate Estimates
    • The plan is only as good as its estimates. Bad estimates lead to improper expectations. The estimates should be as accurate as possible. They can be changed later when more information is known.
  • Realistic Schedule
    • In addition to accurately assessing the amount of effort for each task, it is important to include contingencies for when things may not go as expected.
  • Frequent Progress Updates
    • Update the "% Work Complete" regularly (weekly or monthly). Closely monitor the progress of the work being done.
  • Do something about it!
    • Act on the information that is revealed. If the Schedule Performance Index indicates that a particular task is dragging down the project, take immediate action.

Setting Project with Microsoft Project

  1. Setup Project Information (Calendar, Non-working Days)
  2. Create complete WBS. Identify all the project work to be done. Express as a deliverable.
  3. Assign, as accurately as possible, an estimate on each work item, expressed as Work (not Duration).
  4. Add Resources with their calendars.
  5. Link the work items together at the lowest level.
  6. Level the Resources.
  7. Set the Baseline. (EVM data is stored in the Baselines.)

Insights using EVM in Microsoft Project

Watch the critical path. An SPI or CPI of less than 1 indicates inefficiency either in schedule or cost control. If this drag is in the critical path, it must be addressed immediately.

To get an idea of how late or early the project likely will complete, filter to "Critical Items", then check for negative values in SV (Schedule Variance). The sum of the variances in these cost representations of work can be divided roughly by the resource rates to derive hours of work. This total can then be laid onto the calendar to determined a more realistic finish date.

If actual resource rates are unavailable or should not be shared, rates of $1 may be used. This does not negate the value of the schedule data (SV, SPI).

"One can practice good project management without EVM.

But one cannot practice EVM without good project management."