Earned Value Management (EVM) helps project managers to measure project performance. It is a systematic project management process used to find variances in projects based on the comparison of worked performed and work planned.

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EVM is used on the cost and schedule control and can be very useful in project forecasting. The project baseline is an essential component of EVM and serves as a reference point for all EVM related activities. EVM provides quantitative data for project decision making. EVM Rewards and Recognition According to the NASA Headquarters Library, the first version of Earned Value Management (EVM) was developed by the Defence Department (DoD) to track its programmes during the sixties. Since 2005, EVM has been a part of general federal project risk management. Today EVM is a mandatory requirement of the US government. The Office of Management and Budget (OMB) promotes use of EVM as a preferred performance-based management system to manage software projects.

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EVM is also used in the private sector by companies in a variety of industries, consulting firms and educational establishments. Some of the most well known organisations practicing EVM are: • NASA • Project Management Institute (PMI) • Society of Cost Estimating and Analysis • Defence Acquisition University • Federal Acquisition Institute • Acquisition Management (UK) Based on reports of the General Accounting Office (GAO) in August 1996 a memorandum of understanding concerning common cost and schedule management for acquisitions was signed by Australia, Canada, and the United States. This gives international recognition to EVM worldwide. EVM Measures EVM consists of the following primary and derived data elements. Each data point value is based on the time or date an EVM measure is performed on the project.

Primary Data Points • Budget At Completion (BAC) • Total cost of the project • Budgeted Cost for Work Scheduled (BCWS) / Planned Value (PV) • The amount expressed in Pounds (or hours) of work to be performed as per the schedule plan • PV = BAC *% of planned work. • Budgeted Cost for Work Performed (BCWP) / Earned Value (EV) • The amount expressed in Pounds (or hours) on the actual worked performed • EV = BAC *% of Actual work • Actual Cost of Work Performed (ACWP) / Actual Cost (AC) • The sum of all costs (in Pounds) actually accrued for a task to date For example say we should have completed £800 pounds of work by today. We completed £600 worth of work. The BCWP is £600.