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Why Should a Project Manager Care About Earned Value?

Dec 11, 2013

In simplest terms, Earned Value Management (EVM) is a method of measuring project performance.  There are many ways to measure performance, and EVM is a well-known, standard method, mandated in the case of many government projects.

The intent of this article is not to provide a detailed description of all the EVM metrics and calculations, but to identify the primary reason that a PM should care about earned value.

In order to properly measure performance on any project, there are some basic pieces of information that are required.  These include at least the following:

-        A baseline to measure against

-        A method of tracking progress


To define a proper baseline, a PM must have this basic data:

-        Total Budget (What will the project cost when completed?)

-        Schedule (When will the work be performed?)

-        Ongoing costs (When will the budget be used?)

Additional Baseline data could (and should) also include the following:

-        Resources (Who will do the work?)

-        Milestones or checkpoints for deliverables

Tracking Progress

To measure progress on a project, there must be a way to track:

-        Progress (When is work performed?)

-        Actual costs (When was money spent?)

All of the information listed above is always part of any good project management plan.  Without this information, there is no objective way to know whether a project is on track for success.  Since this information is all that is required to perform basic EVM calculations, all project managers should care about Earned Value, even if it is called by another term.  In other words, if a PM is not maintaining the data needed to measure earned value, they are not maintaining enough data to properly manage the project.

The reason EVM is widely used is that it provides a standard terminology, objective ways to measure and compare individual projects, tasks within projects, or a portfolio of multiple projects.  While EVM, like project management, certainly has a “science” side, there is also an “art” to using EVM.  These are discussed in other blog entries.

Questions about Earned Value Management? Leave them below.

Written by: Glenn Copen

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