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Earned value management

Earned value management is a project management technique for estimating how a project is doing in terms of its budget and schedule.

Earned value compares the work the project team has finished so far with the estimates they made in the beginning of the project. This gives a measure of how far the project is from completion. By extrapolating from the amount of work already put into the project, the project manager can get an estimate on how much resources the project will have used at completion.

This technique is based on the critical path concept. An alternative project performance measurement and management technique is critical chain, which utilizes buffer management instead. The reason is that the earned value management method does not distinguish between the progress on the project constraint (i.e. its critical chain) from progress on the non-constraints (i.e. other paths in the project network). This can sometimes lead the project manager to expetite non-critical work at the expense of critical work in pursuit of better earned value measures, resulting in delayed project completion. This is a case of local optimalization, resulting from a lack of subordination of local measures to global measures.

To apply earned value to a project, the project manager needs the following primary data:

From this data, the project manager can calculate

See also

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