Project Management

The EVM Crystal Ball

Andy Jordan is President of Roffensian Consulting S.A., a Roatan, Honduras-based management consulting firm with a comprehensive project management practice. Andy always appreciates feedback and discussion on the issues raised in his articles and can be reached at [email protected] Andy's new book Risk Management for Project Driven Organizations is now available.

I once asked a project manager why she hated earned value management so much. Her response was that it was just a lot of calculations that told her nothing that she didn’t already know--she was over budget and behind schedule. That might be a common mindset, but it really does sell EVM short. EVM can be a valuable tool not only to help you understand where you are now, but also about where you are going to be.

In this article I want to look at how EVM can help you forecast where your project will be at completion (something that can assist you in making decisions around any project changes that may be necessary), as well as assisting in decisions around extra resources that may be required. Potentially this can also help with a decision as to whether it makes sense to continue with the project. I’m assuming some basic familiarity with EVM terms in this article, but you don’t need to be an EVM expert to follow along.

How EVM calculates forecasts
EVM provides forecasts at project completion, and for that reason it focuses on costs more than schedule (at project completion earned value will always equal planned value so there won’t be any variance). It generates those forecasts by extrapolating the current status to predict what the situation will be at completion. Consider the following example:

  • Earned Value (EV) = $45,000
  • Actual…

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