PRACTICE STANDARD FOR EARNED VALUE MANAGEMENT

PRACTICE STANDARD FOR EARNED VALUE MANAGEMENT

1. INTRODUCTION

   • A practice standard is a document that describes established norms, methods, processes, and practices
   • The information in this practice standard evolved from the recognized good practices of earned value management
   • The practice standard provides guidelines for managing individual projects.

2. PURPOSE OF THIS PRACTICE STANDARD

   • Identifies a subset of project management practices that are used for earned value management
   • Promotes a common vocabulary .
   • There are many different methodologies and tools for implementing the processes described in this practice standard.

3. RELATIONSHIP TO THE PMBOK ® GUIDE

   • It is assumed that a project has been initiated following the processes outlined in the Initiating Process Group
   • High-level requirements documentation has been gathered along with other information in the project charter
   • Stakeholders have been identified
   • Enterprise environmental factors
     • Government or industry standards
     • Infrastructure
   • Organizational Process Assets
     • Processes and procedures
     • Corporate knowledge base

4. ASSUMPTIONS

   • The organization has the corporate policies and procedures to support EVM.
   • The organization has the integrated information systems necessary to implement EVM
   • The project management team has the knowledge and skills needed to plan, execute, and control projects using EVM.
   • Project team members and other stakeholders have suffi cient training and understanding of EVM concepts to plan their work accordingly

5. STRUCTURE OF THE PRACTICE STANDARD

   • Introduction
   • Inputs
   • Description
   • Outputs
   • Considerations
   • Summary

6. EARNED VALUE PROJECT MANAGEMENT OVERVIEW

   • Earned value management is a management methodology for integrating scope, schedule, and resources.
   • EVM can play a crucial role in answering management questions
     • Are we delivering more or less work than planned?
     • When is the project likely to be completed?
     • Are we currently over or under budget?
     • What is the remaining work likely to cost?

7. EVM AND THE PROJECT MANAGEMENT PROCESS

8. 3 BASIC EVM TERMINOLOGY

   • Actual Cost (AC)
   • Budget at Completion (BAC).
   • Contingency Reserve
   • Distributed Budget
   • Earned Value (EV)
   • Estimate at Completion (EAC)
   • Estimate To Complete (ETC).
   • Management Reserve (MR).
   • Performance Measurement Baseline (PMB)
   • Summary Level Planning Budget (SLPB)

9. CONSIDERATIONS

   • EVM is scalable, and implementing the approach depicted in the EVM system diagram
   • Measuring and comparing the value of the work performed (earned value) with the value planned and actual costs expended to accomplish that work as the project progresses.
   • Developing forecasts, for example, EAC, ETC, VAC, etc.

10. BASIC EVM CONCEPT

    • EVM facilitates the planning and control of cost and schedule performance, thus improving project management visibility and understanding.

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