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What are the
benefits of using Earned Value Management? |
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In a typical spend plan analysis,
physical progress is not taken into account when analyzing cost
performance. Instead, a project’s actual costs to date are
simply compared to planned costs, often with misleading results.
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Example:
A task has a planned value (PV) of $1000, and actual costs (AC)
of $1000.
It appears this task has perfect
cost performance, and is in good shape to finish on-budget
(Figure 1). |
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Figure 1 |
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Figure 2 |
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However, if physical progress is
taken into account, the results may differ.
In Figure 2, the
project has spent $1000 in actual costs, but is behind schedule
and has only achieved
$750 of Earned Value.
This is called a
cost overrun, and this project would have a Cost Variance (CV)
of -$250. |
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From this example, we can see that
EVM expands on the two-dimensional analysis– “Has this project
spent more or less money than planned?”– by adding the third
dimension– “What did we get for the money we spent?” |
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earned value, earned value software, bcws |