Earned Value Management: why is it not largely utilized yet? A brief note.

Published by Massimoluigi Casinelli on

Basis of Earned Value Management (EVM)

EVM recognizes the strict interdependence between time and costs in project management and it is, therefore, the most powerful methodology to track, in an integrated manner, time-costs-performance, giving to project managers a meaningful tool to control their projects. EVM metrics is “fascinating” and gives you an effective mean to analyze the project performance at different level of details, because of the easy correlation between EV metrics with WBS.

EVM implementation

Unfortunately, EVM implementation is less easy than you can expect; there are some false-views that may hinder EVM implementation.

The most important obstacle in implementing EVM is thinking that it’s, ultimately, a set of “magic” formulas to calculate “outstanding” metrics to monitor cost and time, I. e. the EV metrics (EV, AC, BC, SPI, CPI).

In realty EVM implementation requires to adopt a specific project organization and a set of processes, according to a well defined project management model. This “model” is defined by EVMS, ANSI 748. Out of this scheme EVM can be “practiced” partially and probably the outcomes would be disappointing and EVM will be assessed by company’s management as something “not applicable in our organization”, but in reality it is a problem of poor culture.

For example, the concept of “control account” that is where you can effectively manage and control time-costs-performance, requires to set up the project organization adequately.

In most cases this is far to become true and companies think they can implement EVM without changing their project organization, the company’s organization itself, as well as the culture of their project managers and project directors.

Another practical example is the cost estimating process and the successive budget process build up: both these processes must be organized consistently and in compliance with project management processes defined into ANSI 748.

If you wish expand further these aspects, you might read this post , which describes the importance of using the CBS (cost breakdown structure) in EVM implementation.

Massimoluigi Casinelli

I am a chartered civil engineer and certified CCP (cost engineering and total cost management) at AACE International, with thirty years of experience in project management of the construction sector. I deliver expert planning, programme management and project controls on multibillions-Euro infrastructure programmes, including highways and railways, metro, air terminals and complex buildings (commercial, residential, schools), with some experience in oil & gas and power. I worked in advanced contexts of project management (from matrix organizations of EPC contractors to large employers organized to manage complex capital projects), by undertaking various roles in the field of project management / controls and contract management; this diverse range of experiences allowed me to gain knowledge on the various components of project controls (schedule, cost estimating, budgeting and cost control, progress and performance measurement, risk and claim management). I am an Italian citizen, currently in Italy.

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