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Topics: Cost Management, Earned Value Management, Integration Management
EVM: What are the limitations or this is the best?

We knew that EVM is a tool that helps PM to measure project's performance (as discussed in PMBOK). Apparently, not all projects used EVM. Are there limitations of EVM, if any or none at all? Your thoughts...

Joefil -

Any tool, no matter how powerful, has limitations. EVM has a number of prerequisites including:

* Discipline in defining & decomposing scope
* Financial reporting systems which can provide the level of granularity required
* Stakeholder maturity in understanding and accepting EVM analysis

It also has a couple of Achilles Heels:

1. If there are multiple parallel non-critical paths, a team could provide the illusion of being ahead by building up a lot of inventory of partially completed tasks. To avoid this, a 0/100 progress reporting rule along with inch pebble decomposition helps.

2. Like all forecasting approaches, EAC is based on a set of assumptions. If those assumptions are invalid, so is the forecast.


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