What is Earned Value Management?

Earned Value Management (EVM) is a method of projecting cost or schedule overruns in a large project. It primarily defines a working relationship between the Federal government and its contractors. Many elements are involved and will be detailed later, but generally include task definition, appropriate communication pathways, cost projections, and comparisons between the actual and projected cost of a project. Thus, two sets of values are created; one firm set prior to project initiation and one fluid set based on the real costs of meeting tasks and objectives. EVM is a form of comparative analysis between the two throughout the life of the project.

With baseline values fixed prior to starting a project, the technique can locate deviations in project progress early, while they are small, before the cost to correct them becomes overwhelming. An Earned Value Management System can also be referred to as a cost/schedule control system (C/SCC). Early agreement on the EVM methodology, objectives and criteria is critical for projects that may last for many years. The main objective is always to contain cost, save money if at all possible, and locate early warning signs of deviation from the planned timeline of the project.

Earned Value Management is not a process, it is a system of criteria applied to baseline values and actual costs alike. No system can be used for more than one project – each is unique.