Earned Value Management Training

.consulting .solutions .
partnership
Project Progress –
Earned Value Management
Global Services
Earned Value Management Training
Agenda
1 Measuring the progress of a project
2 Financial meaning of project progress
3 Earned Value Management definitions
4 Earned Value Management in practice
5 Appendix: ANSI EVMS Guidelines
© msg global solutions | May 2016 | Earned Value Management Training 2

Measuring the progress of a project
How to measure the progress of a car travel?
• You have planned to travel from Point A to Point B, and…

• … you have selected an optimal path to reach the target
• After some time you take a break in a petrol station and

you would like to know:
- How far am I from the target?
- What have I accomplished so far?
- Will I get to the target on time?
- Will I spend the expected budget?
• In a few words
- How can I measure the progress of my journey?
- Is there a simple single number I can depict this project with?

How to measure the progress of a car travel – Possible responses
• By the distance
- km travelled so far (or complement of remaining km) Vs total km
- Total km: originally planned or a new fresh estimate?
• By time
- Time spent so far (or complement of remaining time) Vs total duration
- Total duration: originally planned or a new fresh estimate?
• By energy/cost spent
- Highway in the first half is faster and requires less petrol per km, then regional roads to target
- Highway tolls
- Distribution of Flat Vs hilly roads in the road path
• Externals
- Traffic distribution in the remaining part, should we change the route?

How to measure the progress of a car travel – More responses
• Mental cost
- Tired of driving? No alternative driver? Mental cost per km increases
- Travel mates were sleeping in first half, now they are awake and talking
• Talks reduce possibility of bored driver, discussions make the driver nervous
• Pessimistic view
- Still far from the target destination, if I have a car failure now I am worst than at start
• If I had no car at starting point, I might hire a new car, get on a train, etc.
• Optimistic view
- Driver on a new path/car (projects are unique) is getting more and more experience and can
drive more efficiently
• Can we release some contingency?

How to measure the progress of a car travel – Practical example
Approach Numbers Progress

By distance 500 km total travel; driven so far 200 km
By distance (2) New estimate: 530 km (deviations, revised estimate, etc.)
By time 1h:45m + 15 min break, total estimate was 5h:30m including
contingency
By time (2) New estimate: 5h:50m
By cost Petrol cost + tolls + coffee = 20 €: remaining 36 €
Mental Cost Assuming to apply some mental cost metrics
Route change Remaining increases by 5%
Pessimistic Combine: “Car failure” (progress - 50%) 1% probability and “No car
failure” (progress as any above) 99% probability
Optimistic Add 5% to any above (equivalent to more contingency release)

How to measure the progress of a car travel – Practical example
Approach Numbers Progress

By distance 500 km total travel; driven so far 200 km 40.0 %
By distance (2) New estimate: 530 km (deviations, revised estimate, etc.) 37.7 %
By time 1h:45m + 15 min break, total estimate was 5h:30m including 36.4 %
contingency
By time (2) New estimate: 5h:50m 34.3 %
By cost Petrol cost + tolls + coffee = 20 €: remaining 36 € 35.7 %
Mental Cost Assuming to apply some mental cost metrics e.g. 36 %
Route change Remaining increases by 5% 31 – 37 %
Pessimistic Combine: “Car failure” (progress - 50%) 1% probability and “No car 34.1-39.8%
failure” (progress as any above) 99% probability
Optimistic Add 5% to any above (equivalent to more contingency release) 36 – 42 %

How to measure the progress – Bottom Line
• Many different approaches to measure the project progress

• But any approach can be translated into objective metrics
- By defining the rules of the game at project start
- By measuring consistently throughout the project
• Need to define metrics to measure the project progress, taking into account different
stakeholders’ views:
- Customer: No progress until something released
- Finance: Cashflow Vs P&L + be cautious
- Board / Manager: Whatever metric show how project is going on
- External forces to either be optimistic or pessimistic
- etc.

While you end sipping your coffee
• Still not half through your trip to your destination

• Travel mates are a bit tired
- You, as a driver, are already tired
• Feeling you’ll be late to the appointment at final destination
• So: Got nothing after the first hours and related costs?
• Look at the almost half-full glass

- You’ve completed part of the journey, you’re closer to the end
• And start filling the rest of the glass

- Re-estimate the remaining
- Keep calm and continue

Agenda

Financial Meaning of Project Progress
Invoices pattern and Cost pattern (Fixed Price)
300
250
200
150 Cost
Invoices
100
50
0
0 1 2 3 4 5 6 7 8 9 10 11 12

Monthly profit based on invoices (Fixed Price)
120
100
80
60
Monthly cost
Monthly Invoice
40
Monthly profit
Cumulative profit
20
0
0 1 2 3 4 5 6 7 8 9 10 11 12
-20
-40

Invoice, Costs and Revenue
• Costs are incurred continually

- Resourcing cost each month
- Possible spikes (e.g. equipment acquisition at the beginning of the project)
• Have you bought a map before starting your trip?
• Invoices are issued as per contract terms & conditions
- Monthly for Time & Material
- At milestones for Fixed Price
- Instalment at contract signature
• Revenue ≠ Invoices
- Cfr. Profit & Loss Vs Cash flow
- Monthly profitability based on invoicing is swinging up and down
• In T&M invoicing might be delayed or invoice might be raised one month later

Earned Revenue
• Requirement
- Approach to estimate the revenue portion earned at a given point of the project
- Simple and practical
• But financially sound
- As much objective as possible
- Including the risk status of the project
- For fixed price project
• But usable for T&M projects as well
• Project Manager in charge of this evaluation
• Profitability based on
- Earned Revenue
- Costs

Agenda

Earned Value Management Definitions
Earned Value Management – Input variables
Cumulative
Values BAC Input Definition
Today When we assess the progress of the project
PV Planned Value:
Budgeted Planned Costs to be spent as per today
costs BAC Baseline at Completion
Baseline total cost planned for the whole
project
AC
AC Actual Costs incurred until today
PV
Additional alternative input (either one or the other)
Input Definition
Actual EV
ETC Estimate to Complete
Cost
Estimated costs to complete the project
EV Earned Value (Costs)
Earned Estimation of progress compared with total
Value costs
Start of Today Planned end of Time

project project

Earned Value Management – Computed variables
Cumulative
Values BAC Input Definition
SV Schedule Variance = EV – PV
SPI Schedule Perf Index = EV/PV
Budget How are we performing against the

schedule? Are we late or ahead?
Good if EV>PV or SV>0 or SPI>1
AC CV Cost Variance = EV – AC
CPI Cost Perf Index = EV/AC
BV
PV CV How are we performing against the cost?
How much value delivered for the
SV incurred cost?
Good if EV>AV or CV>0 or CPI>1
Actual EV
Cost BV Budget Variance = PV – AC = CV – SV
(not frequently used)
Earned POC Percentage of Completion = EV / BAC

Value The progress of the project!

project project

Earned Value Management is “Cost”-based
• All EVM variables should be homogeneous (same unit of measure)

Examples:
- Costs
- Budget (T&M)
- Person-days
- Function Points
- Story Points
- etc.
• Not a unit of measure of cost

- Value delivered to the customer
- Revenue earned or progressed
• Need to compare with a Cost
- BAC “matching” the Value of the Contract (“Normalization”)
- At the end of the project EV = BAC

Forecasting the future (cost)
• Estimating
- EAC (Estimate at Completion): Final total costs
• Focus on the bottom line
- ETC (Estimate to Complete): Remaining Costs
• Focus on what’s next, leaving sunk costs aside
• Two approaches to estimate the total final costs

• Approach 1: History teaches us, i.e. the efficiency is not changing
- AC spent to deliver EV, what needed to deliver BAC?
• AC : EV = EAC : BAC  EAC = BAC * AC / EV = BAC / CPI
- Remaining costs are computed
• ETC = EAC – AC = BAC / CPI – EV / CPI = (BAC – EV) / CPI
• Approach 2: We’re master of the future, leveraging on the past history
- ETC is estimated (human assessment), Total costs are computed
• EAC = AC + ETC

Some more minor variables (seldom used)
• Variance at Completion (VAC) = BAC – EAC

- Good if positive, we’ll be spending less to the deliver the same value
- Actually there is some good practical use of it
• Time Estimate at Completion (TEAC) = SAC / SPI
- Estimate based on original Schedule at Completion and Schedule Performance Index
• Similar to estimating EAC based on past CPI
• Time Variance at Completion (TVAC) = SAC – TEAC
• Burn Rate = (EAC – AC) / (BAC – PV) (“Forward looking”)

- What’s remaining to complete (ETC) divided by what forecast to be remaining at current date
- If > 1, maybe insufficient staffing to complete the project on time
• Resource Availability = AC / PV (“Backward looking”)
- If < 1, insufficient staffing so far (assuming cost efficiency)

Earned Value Management – Summary of formulas
Cumulative
Values BAC SV = EV - PV
CV = EV - AC
BV = PV - AC = CV - SV
CPI = EV / AC
Budget
SPI = EV / PV
% completion = EV / BAC
AC % spent = AC / BAC
EAC = BAC / CPI (assuming same efficiency)
BV
PV CV ETC = EAC - AC = (BAC - EV) / CPI
SV Note: ETC computed from past efficiency
Alternatively estimate ETC,
Actual EV
Cost then EAC = AC + ETC
VAC = BAC - EAC (Variance at Completion)
Earned TEAC = SAC / SPI (Estimate)

Value TVAC = SAC - TEAC (Variance)

project project (SAC)

Earned Value Management – Four scenarios
AC
AC SPI < 1 EV SPI > 1

PV CPI < 1 PV CPI < 1
EV
EV
AC
SPI < 1 SPI > 1
PV CPI > 1 PV CPI > 1
EV
AC

Agenda

Earned Value Management in practice
Bored with the theory ?
• Lost track in the car travel?

- The initial requirement:
• Approach to estimate the revenue portion earned at a given point of the project, …
- One definition in bold:
• POC (Percentage of Completion) is the progress of the project
• Evaluating EV or POC are equivalent

- POC = EV / BAC
- Earned Revenue (Value) = POC * BAC
Can be computed as Revenue by using the Total Value of Contract
• Two ways to compute the project progress

- Based on what performed so far (Evaluating the EV)
- Based on remaining cost (Evaluating the POC from ETC)

Two approaches to evaluate the project progress
Focus on… … what performed … remaining costs

Questions What have we delivered so What are the remaining
far? costs?
What have we produced? How much have we spent Vs
What is customer the most recent forecast of
perceiving as delivered? total cost?
Objective Delivered / Produced Spent costs
Subjective Deliverables completion ETC
Independent from Costs and ETC Deliverables
Sharable with customer Yes, but… Not in Fixed Price, but…
Metric set-up More “scientific” Easier, rates only
The two approaches can be combined to cross-check

Approach 1: Progress based on what performed
• Metric to measure what done

• Based on weighted deliverables and overall contribution
- Weight could be based on effort in baseline or perceived value
• Simple weighting: classify deliverable by a few (3 to 5) complexity values
• ETC based on past efficiency
• At project start EV is usually low (preparing, setting, few or no products)
• Progress on each deliverable can be shared with the client.
• Pro’s:
- More orthodox
- More objective
• Theoretical guys would love it
• Con’s:
- More complex
- Need a robust assessment of baseline (and of each Change Request)

Approach 1: Combining completion of all deliverables
Scope item % of Completion Weight (baseline cost) EV Contribution

Deliverable 1 100% 100 100
Deliverable 2 50% 300 150
…
Deliverable N 0% 100 0
Prj Mgmt 10% 500 50
Contingency 0% 500 0
Total Prj POC BAC EV
Contingency is a
component of the project
POC = EV / BAC
budget; it is released
BAC = EV =
during the project ∑i BACi ∑i EVi

Approach 1: Deliverables completion
• The % of completion of a single deliverable can be assessed with thresholds:

- Multi-Step:
• Expert Judgement 1 (25%)
• Expert Judgement 2 (50%)
• Ready for Review or Unit Test (75%)
• Submitted to Client (90%)
• Accepted by Client (100%)
- Activity Credit:
• 0 / 50%
• 50 / 100%
- Customer view (safe side)
• 0% until…
• … 100% at customer approval
• Services are measured in terms of effort (similar to the second approach)
- Project management cost spent Vs total scheduled
- Number of training days held compared with the total planned

Approach 1: Deliverables detailed
• All project costs should be reflected into deliverables

- Exception: Services (Project Mgmt, Training) and Contingency
- Risk of budget trickles
• Customer value has low relationship with costs to produce
- OK to share grade of completion with customer, but not the weights if Fixed Priced
• Deliverables can be detailed as much as appropriate

- Few details  More subjective assessment
- Many details  Too complex to track
- Be practical
• Each deliverable need an owner, who confirms progress

Earned Value Management in Practice
Approach 2: Progress based on costs incurred Vs remaining
• Bottom-up evaluation of ETC by project team members

- Risk of 90% completion syndrome
• EV is computed from AC (spent) and ETC (remaining)
• Baseline cost (BAC) is not used at all
- Focus on up to date costs estimate
• Usually not shared with the customer, unless Time&Material
• Pro’s:
- ETC is up to date
- Earned revenue follows cost profile
• ”Constant” profitability
• Con’s:
- Less formal
- Partly subjective

POC based on costs incurred Vs remaining
Budget POC (% of completion) = AC / (AC + ETC) = AC / EAC

(preferably
cost rather ETC EV = POC * BAC
than Earned Revenue = POC * TCV
hours) Spent so
far Current GM = (POC*TCV – AC) / (POC*TCV) = 1-EAC/TCV
BAC AC EAC GM = (TCV – (AC+ETC) ) / TCV = 1 – EAC / TCV
• POC: Percentage of Completion

• POC is based on cost
- As in previous approach, earned revenue is linked to POC, so ETC impacts revenue
recognition
- ETC is assessed, future efficiency not necessarily the same as past efficiency
• If POC is based on costs and ETC, current Margin and EAC Margin are the same
• MS project or other planning tool (efficiently used) is required

Estimate to Complete (ETC)
• AC (gone) Objective value, which cannot be changed (sunk cost)

Subjectivity
• EV Partly objective (# of features implemented, weighted) – (Approach 1)
• ETC Partly subjective – (Approach 2)
• ETC assessment is an opportunity

- Can we do it with less cost, keeping the same quality?
- Do we have more info to reduce uncertainty and revise the initial estimate?
- Can we enlarge the scope of the activity (Change Request) to add more value, with some more
effort, leveraging on the economy of scale?
• If ETC is not continually estimated in a proper way

- Risk is ignored, possibly negative revenue in the future
- Too late to act on the causes
- Lost opportunity

Comparing the two approaches with a single deliverable
• One deliverable only • One deliverable only

- Initial estimate 100 - Initial estimate 100
- Spent: 80, or 80% of baseline - Spent: 80, or 80% of baseline
- Remaining: 40 - Remaining: 40
- Level of completion: 50% - Level of completion: 50%
• POC based on deliverable completion • POC based on actuals and ETC

- POC = 50% - POC = 80 / 120 = 67%
- Focus on value - Focus on costs and cost profile

• ETC is not used • Deliverable completion is not used
• Assuming the same efficiency in the future • Margin so far is set equal to the margin just
• Hours spent or remaining to spend are not estimated at the end of the project
relevant for progress, only for profitability • Take into account future (in)efficiency
• Low progress at initial stages • Beware of ETC under-estimate

Tricky questions
• Waterfall more suitable than Agile, due to better scope definition?

- EVM can be used for iterative approaches as well (deliverables detailed by iteration)
- Story points can be used as metrics
• Should we use EVM for Time&Material project?

- Earned Revenue is already computed based on rates
- Customer might be interested in
• measuring what they get from money spent
• estimating ETC and EAC for budget monitoring
• CPM Vs EVMS – Which is better in controlling the project?

- CPM provide more insights on the schedule risks and final date of completion (TEAC)

Challenges in forecasting
• Uncertainties accumulates at the end

- Human issues
• “The estimate (of future tasks) was correct” (Anchor effect)
• “How much do I have left?” (Wishful & optimistic thinking)
• “We will start next week” (Student syndrome, avoiding activities which present more risks)
- Late acknowledgment of problems
- 90% completion syndrome
• Different approach in forecasting

- The remaining deliverables require the planned budget
• EAC = AC + (BAC – EV) (Atypical estimate)
- The (in)efficiency stays the same
• EAC = AC + (BAC – EV) / CPI (Typical estimate)
- Worst, if we’re late
• EAC = AC + (BAC – EV) / (CPI*SPI) (Pessimistic estimate, if SPI<1)

Agenda

ANSI EVMS Guidelines (ANSI/EIA 748-C) 1
Summary of Guidelines
Area Guidelines (high level)

Organization (5)  Define contractual effort and assign
responsibilities for the work
Planning, Scheduling & Budgeting  Plan, schedule, budget and authorize the
(10) work
Accounting (6)  Accumulate costs of work and material
 Report on progress/accomplishments to
date
Analysis & Management Reports  Compare planned, earned and actual
(6) costs, analyze variances and develop
estimates of final costs
Revisions and Data Maintenance  Incorporate internal and external changes
(5)
1. Source: National Defense Industrial Association

ANSI EVMS Guidelines
Organization
1. Define the authorized work elements for the program. A work breakdown structure
(WBS), tailored for effective internal management control, is commonly used in this
process.
2. Identify the program organizational structure including the major subcontractors
responsible for accomplishing the authorized work, and define the organizational
elements in which work will be planned and controlled.
3. Provide for the integration of the company’s planning, scheduling, budgeting, work
authorization and cost accumulation processes with each other, and as appropriate,
the program work breakdown structure and the program organizational structure.
4. Identify the company organization or function responsible for controlling overhead
(indirect costs).
5. Provide for integration of the program work breakdown structure and the program
organizational structure in a manner that permits cost and schedule performance
measurement by elements of either or both structures as needed.

Planning, Scheduling, and Budgeting (1/2)
6. Schedule the authorized work in a manner which describes the sequence of work and
identifies significant task interdependencies required to meet the requirements of the
program.
7. Identify physical products, milestones, technical performance goals, or other indicators
that will be used to measure progress.
8. Establish and maintain a time-phased budget baseline, at the control account level,
against which program performance can be measured. Initial budgets established for
performance measurement will be based on either internal management goals or the
external customer negotiated target cost including estimates for authorized but
undefinitized work. Budget for far-term efforts may be held in higher level accounts until
an appropriate time for allocation at the control account level. On government
contracts, if an over-target baseline is used for performance measurement reporting
purposes, prior notification must be provided to the customer.
9. Establish budgets for authorized work with identification of significant cost elements
(labor, material, etc.) as needed for internal management and for control of
subcontractors.

Planning, Scheduling, and Budgeting (2/2)
10. To the extent it is practicable to identify the authorized work in discrete work packages,
establish budgets for this work in terms of dollars, hours, or other measurable units.
Where the entire control account is not subdivided into work packages, identify the far
term effort in larger planning packages for budget and scheduling purposes.
11. Provide that the sum of all work package budgets plus planning package budgets
within a control account equals the control account budget.
12. Identify and control level of effort activity by time-phased budgets established for this
purpose. Only that effort which is unmeasurable or for which measurement is
impracticable may be classified as level of effort.
13. Establish overhead budgets for each significant organizational component of the
company for expenses which will become indirect costs. Reflect in the program
budgets, at the appropriate level, the amounts in overhead pools that are planned to be
allocated to the program as indirect costs.
14. Identify management reserves and undistributed budget.
15. Provide that the program target cost goal is reconciled with the sum of all internal
program budgets and management reserves.
Accounting
16. Record direct costs in a manner consistent with the budgets in a formal system
controlled by the general books of account.
17. When a work breakdown structure is used, summarize direct costs from control
accounts into the work breakdown structure without allocation of a single control
account to two or more work breakdown structure elements.
18. Summarize direct costs from the control accounts into the contractor’s organizational
elements without allocation of a single control account to two or more organizational
elements.
19. Record all indirect costs which will be allocated to the contract.
20. Identify unit costs, equivalent unit costs, or lot costs when needed.
21. For EVMS, the material accounting system will provide for:
 Accurate cost accumulation and assignment of costs to control accounts in a manner
consistent with the budgets using recognized, acceptable, costing techniques.
 Cost performance measurement at the point in time most suitable for the category of material
involved, but no earlier than the time of progress payments or actual receipt of material.
 Full accountability of all material purchased for the program including the residual inventory.
Analysis and Management Reports (1/2)
22. At least on a monthly basis, generate the following information at the control account
and other levels as necessary for management control using actual cost data from, or
reconcilable with, the accounting system:
 Comparison of the amount of planned budget and the amount of budget earned for work
accomplished. This comparison provides the schedule variance.
 Comparison of the amount of the budget earned and the actual (applied where appropriate)
direct costs for the same work. This comparison provides the cost variance.
23. Identify, at least monthly, the significant differences between both planned and actual
schedule performance and planned and actual cost performance, and provide the
reasons for the variances in the detail needed by program management.
24. Identify budgeted and applied (or actual) indirect costs at the level and frequency
needed by management for effective control, along with the reasons for any significant
variances.

Analysis and Management Reports (2/2)
25. Summarize the data elements and associated variances through the program
organization and/or work breakdown structure to support management needs and any
customer reporting specified in the contract.
26. Implement managerial actions taken as the result of earned value information.
27. Develop revised estimates of cost at completion based on performance to date,
commitment values for material, and estimates of future conditions. Compare this
information with the performance measurement baseline to identify variances at
completion important to company management and any applicable customer reporting
requirements including statements of funding requirements.

Revisions and Data Management
28. Incorporate authorized changes in a timely manner, recording the effects of such
changes in budgets and schedules. In the directed effort prior to negotiation of a
change, base such revisions on the amount estimated and budgeted to the program
organizations.
29. Reconcile current budgets to prior budgets in terms of changes to the authorized work
and internal replanning in the detail needed by management for effective control.
30. Control retroactive changes to records pertaining to work performed that would change
previously reported amounts for actual costs, earned value, or budgets. Adjustments
should be made only for correction of errors, routine accounting adjustments, effects of
customer or management directed changes, or to improve the baseline integrity and
accuracy of performance measurement data.
31. Prevent revisions to the program budget except for authorized changes.
32. Document changes to the performance measurement baseline.

Marco Perezzani msg global solutions ag (Headquarters)
Project Portfolio Services and PM Community Eichwatt 3, 8105 Regensdorf
Leader Switzerland
Marco.Perezzani@msg-global.com www.msg-global.com
.consulting .solutions .partnership

Earned Value Management Training

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.consulting .solutions .

1 Measuring the progress of a project

2 Financial meaning of project progress

3 Earned Value Management definitions

4 Earned Value Management in practice

5 Appendix: ANSI EVMS Guidelines

© msg global solutions | May 2016 | Earned Value Management Training 2

How to measure the progress of a car travel?

• You have planned to travel from Point A to Point B, and…

• After some time you take a break in a petrol station and

© msg global solutions | May 2016 | Earned Value Management Training 3

How to measure the progress of a car travel – Possible responses

© msg global solutions | May 2016 | Earned Value Management Training 4

How to measure the progress of a car travel – More responses

• Can we release some contingency?

© msg global solutions | May 2016 | Earned Value Management Training 5

How to measure the progress of a car travel – Practical example

Approach Numbers Progress

© msg global solutions | May 2016 | Earned Value Management Training 6

How to measure the progress of a car travel – Practical example

Approach Numbers Progress

© msg global solutions | May 2016 | Earned Value Management Training 7

How to measure the progress – Bottom Line

• Many different approaches to measure the project progress

© msg global solutions | May 2016 | Earned Value Management Training 8

While you end sipping your coffee

• Still not half through your trip to your destination

• Look at the almost half-full glass

• And start filling the rest of the glass

© msg global solutions | May 2016 | Earned Value Management Training 9

1 Measuring the progress of a project

2 Financial meaning of project progress

3 Earned Value Management definitions

4 Earned Value Management in practice

5 Appendix: ANSI EVMS Guidelines

© msg global solutions | May 2016 | Earned Value Management Training 10

Invoices pattern and Cost pattern (Fixed Price)

© msg global solutions | May 2016 | Earned Value Management Training 11

Monthly profit based on invoices (Fixed Price)

© msg global solutions | May 2016 | Earned Value Management Training 12

Invoice, Costs and Revenue

• Costs are incurred continually

© msg global solutions | May 2016 | Earned Value Management Training 13

© msg global solutions | May 2016 | Earned Value Management Training 14

1 Measuring the progress of a project

2 Financial meaning of project progress

3 Earned Value Management definitions

4 Earned Value Management in practice

5 Appendix: ANSI EVMS Guidelines

© msg global solutions | May 2016 | Earned Value Management Training 15

Earned Value Management – Input variables

Start of Today Planned end of Time

© msg global solutions | May 2016 | Earned Value Management Training 16

Earned Value Management – Computed variables

Budget How are we performing against the

Earned POC Percentage of Completion = EV / BAC

Start of Today Planned end of Time

© msg global solutions | May 2016 | Earned Value Management Training 17

Earned Value Management is “Cost”-based

• All EVM variables should be homogeneous (same unit of measure)

• Not a unit of measure of cost

© msg global solutions | May 2016 | Earned Value Management Training 18

Forecasting the future (cost)