Getting Started with Earned Value Management

Identify and Organize all Project Steps

First, identify all tasks that need to be accomplished and organize the tasks into sub-groups (1). Breaking down activities into the smallest possible steps makes it easier to pinpoint schedule and cost performance problems.

Allocate the Budget and Schedule Tasks

Each activity in the project should have a planned Budget-at-Completion (BAC). All subsequent earned value calculations will be based on this amount (2). In addition to the BAC, each task should also have a specific duration (3), which provides the basis for monitoring actual costs and physical progress.

Update Task Status and Enter Actual Costs

As the project progresses, percent complete for unfinished tasks should be updated and monitored (4). Earned Value (EV) is determined by relating this physical progress to the BAC. Along with task status and budget, it is necessary to maintain actual costs accrued for each task in order to calculate cost performance (5).

Use the Data to Make Informed Decisions

Now that all tasks have been scheduled, and the BAC, EV, Percent Complete, and AC are known, further analysis can be performed, including schedule and cost variances, performance efficiency, and estimates-at-completion.

Earned Value Reports

For further reading, try this free Earned Value Management eBook:

Successfully Presenting Earned Value is a free e-book which will help you learn to implement and present Earned Value schedules. It offers both an explanation of Earned Value Management principles, and step-by-step instructions. This e-book is offered at no charge. After reviewing it, you may be interested in downloading our Milestones Professional software. Milestones Professional was used to produce the presentation-ready Earned Value reports shown in the e-book and can be used to make schedules in many formats, including Gantt charts, Milestone charts, Summary charts, Resource Charts and more.

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