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Earned value management system (EVM) is a practice which project management professionals developed
to evaluate performance & progress of a project. Implementation of this system in a project can provide,
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1 Key elements of the Earned value management (EVM) system can be identified as follows,
1.1 Planned value [PV]
1.2 Earned Value [EV]
1.3 Actual Cost [AC]
1.4 Cost variance [CV]
1.5 Cost performance index [CPI]
1.6 Scheduled variance [SV]
1.7 Schedule performance index [SPI]
1.8 Estimate to complete [ETC]
1.9 Estimate at completion [EAC]
1.10 Work breakdown structure for EVM system
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Expected budget estimated (as per the work) based on the work breakdown structure is called as planned
value. This should be identified based on the project schedule. Values should be identified in accordance with
the project time frame. Based on the project programme each month planned value should be derived.
This is the Key element of Earned value management system(EVM). Project manager should be determining
the actual accomplishment of work on a given date based on the work breakdown schedule.
This is the actual cost of the each element based on the work breakdown schedule.
This indicates the cost performance of the project, particular work or element. CV is the difference between
Earned value & actual cost [CV =EV- AC]. If cost variance is a positive value it shows complimentary
indication of the project, particular work or element.
This shows cost efficiency of the project, specific work or element. Formula to derive CPI is EV/AC (ratio
between earned value & actual cost). If this value is equal or greater than the one it means efficiency of
expenditure of the project, specific work or element is good.
This shows whether the project is achieving the baseline schedule or not (whether project, work or element is
behind the schedule or ahead the schedule) in accordance with the WBS. Formula to scheduled variance is
difference between the EV and PV.
this shows work efficiency of the project or work element. Formula to derive SPI is EV/PV (ratio between
earned value & planned value). If this value is equal or greater than the one it means efficiency of work done
of the project or the specific work is good.
This is the cost required to complete all the balance work of the project or specific work. Calculation of ETC
should be more accurate and it can be difficult.
EAC is the value of actual cost plus estimated to complete (EAC= AC+ETC) or the anticipated total cost of
the completion of the project or the work element.
For implementation of Earned Value Management (EVM) process Project Manager should make a
comprehensive plan for both budget & time of the project. This should be planned & implement before project
starts, budget and time should be according with the work breakdown structure (WBS).
Major works should be identified and time and cost should be allocated among each element in accordance
with the work schedule. At the execution period PM should asses below three things to asses earned value.
1. Value should have done at any date given as per the project plan
2. Produced value at the time
3. Amount of money spent
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6/29/2020 What is Earned value management system (EVM) · Quantity Surveyor blog
Above graph the works has been segregated in to major categories in building construction. In detailed WBS
schedule these work should be more categorize under these major headings. Simple example of excavation
works for small 3 building construction as follows,
As per above graph it is clearly showing this work has been delayed for 11 days. Management can
easily identified where the delay occur (item nr 2.3 has delayed 2 days, item nr 2.4 has delayed 4 days
& item nr 1 has delayed 2 days. Due to these delays commencing dates of other works such as
cleaning & clearing also delayed). But the good thing is that work has been finished within the
original budget.
Further to the above example, below shows how EVM can used for track time & cost of a project.
These examples has given for compete project (on month of May status).
As per the below example 1- planned value is 130,000, ETC is 170,000 and project programme has
exceeded from 12 months to 14 months. Earned value as per month of May is 40,000.
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6/29/2020 What is Earned value management system (EVM) · Quantity Surveyor blog
Graph 1
As per the below example 2- planned value is 130,000, ETC is 170,000 and project programme has
exceeded from 12 months to 14 months. Earned value as per month of May is 58,000.
Graph 2
As per the below example 2- planned value is 140,000, ETC is 130,000. Earned value as per month of
May is 58,000.
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Graph 3
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1 COMMENT
nuwan
OCTOBER 10, 2019 AT 3:48 PM
good job,
read more article’s about quantity surveyor duties
http://quantitysurveyor4u.blogspot.com/2019/09/quantity-surveyor-duties-in-pre-contract-stage.html
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