What are the benefits 

of using earned value analysis?

Earned Value Management (EVM) provides a clear picture of where your project stands
versus where it should have been as planned (Unit Note 7). It also shows the actual work
completed against the projected schedule. EVM is a project management methodology that
integrates schedule, cost, scope, and risk.

EVM benefits:

 The biggest benefit to implementing EVM is that it is a single system that can track the
project in terms of Scope, schedule, and budget. Project managers do not have to learn
multiple systems. EVM can measure the amount of work completed, forecast the cost and
completion date, compare the actual performance of the project versus the plan, and
finally track the project's budget in real time (Breuker, 2021).

 EVM is an Excellent Measure of Progress. This is how anyone invested in the project
will want to know how things are progressing at a given point in time. It answers the
question when someone asks about the project completion. 50% complete.

 EVM Enables Accurate Forecasting. It is one of the best forecasting tools for high-risk
development programs. Using Earned Value (EV) data to forecast completion
costs, project stakeholders can accurately plan resources, including making
funds available, ensuring projects deliver necessary benefits.

 EVM Supports Management such as business intelligence tools is great to produce EV

data, however one of biggest benefits is that it allows project managers and stakeholders
to focus on issues that have the biggest cost and schedule risk.

 EVM Promotes Good Project Management Disciplines that integrates schedule, cost,
scope, and risk to produce good EV data, therefore use to effectively manage the project.

 EVM is Cost Effective.

What are the challenges or risks of using earned value analysis?

Three common limitations of earned value are:

 You need a well-defined project scope. It relies on having a well-defined project scope so
that value can be assigned to specific activities. 

 You need well-defined project dates. EV calculations are date-driven, therefore you’re
looking for value earned during a specific time period of when the work was scheduled.
  You need skilled staff.  For adopting EV, it’s important to have experienced project
professionals who can produce the inputs for the EV tools and interpret the outputs.

EVM is a powerful tool for project management, implementing it comes with its own set of
challenges. The following are the most common: (LogRocket Fronted Analysis, (2023))

 Inaccurate data: The accuracy of data is crucial for EVM as it helps you measure
project performance. If the data is inaccurate, then the EVM results will be unreliable.

 Lack of stakeholder buy-in: Without stakeholders buy-in, you will find it extremely
hard to fully utilize EVM which will lead to inaccurate results. Educate stakeholders
about the benefits of EVM and how it can help them make good decision-makings.

 Poorly defined project scope: This challenge defined project scope and to overcome it,
you should ensure the scope is well-defined and understood by all stakeholders. As well,
you should ensure your project charter, delivery plan, and project kick-off are your best
friends.

 Lack of project management process integration: This is the fourth most common
challenge. It can lead to inaccurate EVM results therefore integrating it into the project
management processes is the best solution.

Are there projects where earned value analysis may be more useful than other types of
projects?

According to our reading and when searching the internet on the subject, I concluded that
EVM is not best for all project-types. It is best used on development-type projects that are
process-driven (i.e., “waterfall”). For example, construction projects, engineering/manufacturing
are best suited for this king of projects.

Here are some best practices for incorporating EVM: (LogRocket Fronted Analysis, (2023))

 Establish a baseline: Establish a baseline from which you can compare actual progress
and costs.

 Define project tasks: Define project tasks clearly and break them down into manageable
activities.

 Assign resources: Assign resources to each task to ensure that they are adequately
resourced.

 Track progress: Track progress against the baseline to ensure that tasks are on schedule
and on budget.

 Calculate EVM metrics: Calculate EVM metrics such as Cost Variance (CV), and
Schedule Variance (SV) to evaluate project performance.
  Analyze EVM results: Analyze EVM results to identify trends and potential issues that
require corrective action.

 Communicate EVM results: Communicate EVM results to stakeholders regularly to

ensure that everyone is aware of project progress and potential issues.

 Use EVM to make data-driven decisions: Use EVM metrics to make data-driven
decisions about project management, including resource allocation, schedule adjustments,
and corrective action.

 Continuously improve: Continuously improve EVM processes by incorporating lessons

learned into future projects.

References:
Grygierowski, S. (2023). Unit 7 Notes: Evaluating & Forecasting,
https://moodle.royalroads.ca/moodle/mod/book/view.php?id=679288

Lewis, J. P. (2011). Project Planning, Scheduling & Control: a hands-on guide to bringing

projects in on time and on budget (5th ed.). New York: McGraw-Hill. (Ch. 8 and 20). Retrieved
from Ebook Central e-book database. Note: Please refer to the RRU Library’s e-book guide for
instructions on accessing, printing, and downloading e-book content.  Note that printing and
downloading from e-book databases is usually limited to a portion of the book. For assistance,
please contact: ask@royalroads.libanswers.com. 

Christensen, D. S. (1999, Summer). Using the Earned Value Cost Management Report to

Evaluate the Contractor's Estimate at Completion. Acquisition Review Quarterly, 283-296.
https://www.dau.edu/library/arj/ARJ/arq99/chrisevm.pdf

Reichel, C. W. (2006). Earned value management systems (EVMS): "you too can do earned
value management" Paper presented at PMI® Global Congress 2006—North America, Seattle,
WA. Newtown Square, PA: Project Management Institute.

Breuker, Michael , (2021). 5 BENEFITS OF EARNED VALUE MANAGEMENT (EVM), 16

nOVENVER 2021. HTTPS://WWW.PINNACLEMANAGEMENT.COM/BLOG/5-BENEFITS-
OF-EARNED-VALUE-MANAGEMENT-EVM

LogRocket Fronted Analysis, (2023). What is earned value management (EVM)?,

https://blog.logrocket.com/product-management/earned-value-management/#:~:text=Inaccurate
%20data%20is%20one%20of,EVM%20results%20will%20be%20unreliable.