Earned Value Management

Earned Value Management (EVM) is the project management methodology that integrates scope, schedule, and cost. The framework allows project management professionals to monitor these three components. EVM provides an objective measure of progress while delivering early warning indicators through trends and estimates.

You can maintain earned value methods for the following earned value types:

  • Earned value Start/End Percentage: Percentage values are assigned to the start and end points of the activities. At the start of the activity, a particular percentage of the project is completed and the budget amounts are then released based on these percentages. :

    Example: For an activity, the Scheduled Start Date is 1st Jan 2012, Scheduled End Date is 20th March 2012 and the budget amount is 10000 EUR.

    • Start Percentage = 70%
    • End Percentage = 30%
    • Time Phase Budget in Period 1 (Jan 12) = 10000 * 70% = 7000 EUR
    • Time Phase Budget in Period 2 (Feb 12) = 10000 * 0 = 0 EUR
    • Time Phase Budget in Period 3 (Mar 12) = 10000 * 30% = 3000 EUR
    Note: You can manually define the split percentage for the start and end of the activities.
  • Earned value Percentage Complete : The budget amounts are released in proportion to the progress percentage of the project. The budget must be equally divided over the time period of activity start and end date.

    Example: For an activity, the Scheduled Start Date is 1st Jan 2012, Scheduled End Date is 20th March 2012 and the budget amount is 10000 EUR.

    • Since the EVM is percentage complete, time phase the budget proportionately over the duration of the activity.
    • Activity Duration: 31 Days (in Jan) + 29 Days (in Feb) + 20 Days (in March) = 80 Days
    • Time Phase Budget in Period 1 (Jan 12) = 10000 / 80 * 31 = 3875 EUR
    • Time Phase Budget in Period 2 (Feb 12) = 10000 / 80 * 29 = 3625 EUR
    • Time Phase Budget in Period 3 (Mar 12) = 10000 / 80 * 20 = 2500 EUR
  • Earned value Milestones : Milestones are attached to the activity and a percentage or amount of the budget is assigned to each milestone. When a milestone is reached, the assigned budget is released.

    Example: For an activity, the Scheduled Start Date is 1st Jan 2012, Scheduled End Date is 20th March 2012 and the budget amount is 10000 EUR.

    • The Activity is linked to Milestone M1 and M2.
    • M1 (Scheduled Completion Date) = 12th Feb 2012
    • M2 (Scheduled Completion Date) = 20th March 2012
    • Percentage assigned to M1: = 40%
    • Percentage assigned to M2: = 60%
    • Time Phase Budget in Period 1 (Jan 12) = 0 = 0 EUR
    • Time Phase Budget in Period 2 (Feb 12) = 4000 = 4000 EUR
    • Time Phase Budget in Period 3 (Mar 12) = 6000 = 6000 EUR
    Note: You can manually enter or modify the percentages for each milestone.
  • Level of Effort: The earned value is equal to the scheduled or planned value of the project. The budget amounts are released in proportion to the effort. If a project is completed in the specified time, the budget is released based on the effort made to complete the project.
  • Apportioned: The budget amounts are released based on the linked activities that use the same earned value method. This method is used for distribution of the earned value across the activities.

    Example:

    • When an activity A2 is linked to activity A1:

      • Earned Value (EV) method of the activity A2 = Apportioned.
      • Earned Value (EV) method of the activity A1 = Percent Complete.

      The activity A2 also must use the Earned Value (EV) method of A1, Percent Complete.