Definition: Earned Value Management (EVM) is a project management technique used to assess a project's progress and performance by integrating scope, schedule, and cost data. It provides a systematic approach to measuring project performance against the baseline plan, thereby enabling project managers to make informed decisions and take corrective actions as necessary.
Planned Value represents the authorized budget assigned to the work scheduled to be accomplished up to a specific point in time. It serves as a benchmark for measuring the project's planned progress and cost expenditure.
Earned Value is the value of the work actually performed and completed up to the current date. It quantifies the project's progress in terms of budgeted costs for the work performed.
Actual Cost refers to the total expenditures actually incurred and recorded in accomplishing the work performed for a specific activity or work breakdown structure component. It provides a real-time assessment of the project's cost performance.
EVM provides a quantitative measurement of a project's progress, enabling stakeholders to understand how efficiently resources are being utilized and whether the project is on track.
By comparing EV, PV, and AC, EVM allows early identification of schedule and cost variances, enabling proactive management interventions to address potential risks and delays.
With comprehensive data on project performance, stakeholders can make informed decisions regarding resource allocation, schedule adjustments, and risk management strategies.