Project Management

The Earned Value Budget Square

Vladimir is a project manager in Moscow.

What is earned value? According to A Guide to the Project Management Body of Knowledge (PMBOK® Guide), the value is the benefit results of a project. It implies that this benefit is quantifiable, and the earned value is intended to measure a project’s benefits in some monetary units like dollars.

The expected benefits of a project are not all received by all the stakeholders at once. The earned value varies and accumulates during the course of the project. In the article, EV denotes the variable measures of the benefits that have been gathered by the stakeholders at the certain moment of the project.

The EV changes from zero (no value yet received) to the maximum (all expected value obtained by the project stakeholders). The earned value concept implies that this maximum is the planned and baselined project budget, or budget at completion (BAC). Therefore, the maximum for EV persists unless the cost baseline is changed through the Perform Integrated Change Control process.

The Earned Value Coordinate System
As stakeholders expect to receive value from the project, the EV can be treated as an output variable. In other words, EV depends on another variable that serves as an input for the model. While expecting some value from the project, the organization invests resources and assets in it—or speaking in monetary terms, spends some money. The money spent…

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