Project managers are expected to know the progress of their projects at all times. Are you meeting expectations? Staying within budget? Staying on schedule? These can be tough questions to answer without the use of EVM (earned value management).
Fortunately, EVM doesn’t require a different approach to project planning and management. Rather, it extracts useful information from planning work that you’re routinely doing.
The Need for EVM
If every project went according to plan, there would be no need for EVM.
EVM serves to illustrate the difference between what was planned and what is actually happening. It’s an early warning system that alerts management to the realities of project performance.
In essence, EVM creates a performance “contract” for a project. It clarifies exactly what was expected to happen before the project was launched, and then measures whether those expectations are coming true during execution.
The problem with most contracts is that sellers (in this case, project managers) don’t want to commit to a fixed price. They want to spend money as necessary in order to get the work done.
On the other hand, the buyers (members of senior management) want to know exactly what their money will be purchasing. They want a firm commitment from the project manager.
EVM helps to solve this conflict by providing a firm estimate of performance (developed in the planning stage) and then generating interim measures of whether that estimate is being realized.
This information was drawn from Global Knowledge’s Earned Value Management course.
This article was originally published in Global Knowledge’s Business Brief e-newsletter. Global Knowledge delivers comprehensive hands-on project management, business process, and professional skills training. Visit our online Knowledge Center at www.globalknowledge.com/business for free white papers, webinars, and more.
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