Fundamentals of Earned Value Management (EVM) Training
Fundamentals of Earned Value Management Training covers the concepts and techniques associated with EVM.
What is EVM?
Earned Value Management (EVM) is a valued tool in the Project Management used to track measures. EVM is a requirement for all main capital-funded IT programs in the U.S. Federal Government.
The main notion of EVM is more than a specific project management process or technique. It is like an umbrella encompassing 32 guidelines that demonstrate a series of requirements that a contractor’s management system must meet.
- Providing the foundation to capture work progress evaluations against the baseline plan
- Relating technical, schedule, and cost performance
- Offering valid, timely, and auditable data/information for proactive project management analysis and action
- Offering managers practical tools for effective decision making
The notion of earned value management became an essential method to program management in 1966 when the United States Air Force authorized earned value in combination with the other planning and controlling requirements on Air Force programs. The requirement was allowed, the Cost/Schedule Planning Control Specification (C/SPCS). Although it has had recurring updates to its title, such as Cost/Schedule Control System Criteria (C/SCSC), Earned Value Management Systems Criteria (EVMSC), and the current 32 guidelines in the EIA-748 Standard for Earned Value Management Systems (EVMS), the notion and its requirements have stayed basically constant. The EVM notion expressed in these requirements is a comprehensive management method, that once integrated on any kind of program, it offers all levels of management with early reflectiveness into cost and schedule problems. Earned value management is today used on programs globally. But, main EVM users include the United States, Europe, England, Canada, Australia, China, and Japan. It is a requirement of many U.S. Government organizations, including the Department of Defense (DoD), the National Aeronautics and Space Administration (NASA), the Department of Energy (DOE), the Intelligence Community, the Department of Homeland Security (DHS), the Federal Aviation Administration (FAA) and Department of Transportation (DOT), Health and Human Services (HHS), and others.
The 32 Guidelines Sections
- Planning, Scheduling and Budgeting
- Accounting Considerations
- EVMS Analysis and EVMS Management Reports
- Revisions and Data Maintenance
This first section includes 5 guidelines that discuss organizing the work. One of the most basic is that the contractor must develop a work breakdown structure (WBS) stretched down to a level that explains the tasks that will be achieved as well as their relationship to product deliverables. Also is important the organization breakdown structure (OBS) that determines who is accountable for the work effort defined in the WBS. It is at this stage where the WBS (what) and OBS (who) cross that describes a control account, a key management control point. The person accountable for the work effort (scope, schedule, and budget) is the control account manager (CAM). This is the basis for confirming the contractor’s planning, scheduling, budgeting, work authorization, and cost accumulation processes are fully integrated.
- Planning, Scheduling, and Budgeting
The second section includes 10 guidelines that provide the fundamental requirements for planning, scheduling, and establishing the time-phased budgets for the tasks. The incorporated main schedule is the project’s roadmap to meet contract objectives. Such schedule must be resourceful to identify the budget for the work as scheduled. The resourceful schedule is the foundation for the monthly budget, or BCWS, for each task and therefore the project. This time-phased budget is the performance measurement baseline (PMB). The overall budget for each task, control account, or the whole project is described as the budget at complete (BAC). Because most projects are started with some level of uncertainty, project managers usually put aside a ration of the total project value as a management reserve (MR). MR supplemented to the BAC equals the total project budgeted value, expressed as the contract budget base (CBB).
- Accounting Considerations
This part is a very upfront, long standing project management set of 6 guidelines for capturing actual costs (ACWP) used for project work effort. Actual costs must be included in a way adjusted with the way work is planned and budgeted. The section expresses the demand to choose the proper time to schedule a crucial project resource, material, and to ensue performance data properly. The section also specifies a typical sense practice to accrue the costs for the material in the same month as the BCWP was taken (earned) to inhibit a very misleading cost variance, also known as “booking lag.”
- Analysis and Management Reports
The fourth section of 6 guidelines is very crucial, as much as it needs human consideration to cost and schedule variances, documenting cause, impact, and correction action, and identifying a new approximation at complete (EAC), if warranted. The variance calculations during Earned Value Management assessment are usually performed at the control account level that delivers the capability to review the data through the WBS and/or the OBS.
- Revisions and Data Maintenance
The final section is a set of 5 baseline control guidelines that concentrate on disciplined and timely integration of customer directed changes, including stop work orders (SWO). The guidelines also apply to internal re-planning and project assessment. Absence of baseline control can significantly harm a project. Determining and maintaining a schedule and budget baseline is crucial to be able to evaluate work achieved for each reporting cycle. The Revision and Data Maintenance section is a must for proactive, meaningful earned value management when there is a constantly changing baseline.
Benefits of EVM
- Improves the planning process
- Nurtures a clear outline of the work scope
- Creates clear responsibility for work effort
- Incorporates technical, schedule, and cost performance
- Offers early warning and assessment of potential Earned Value problems
- Determines problem areas for instant and active management consideration
- Allows more precise reporting of cost and schedule effects of known problems
- Improves the capability to analyze and integrate technical, schedule, cost, systems analysis, and risk factors
- Provides consistent and clear communication of progress at all management levels
- Enhances project visibility and liability
Fundamentals of Earned Value Management training is a 2-day course designed for:
- Members of the project management office
- Project managers
- Business analysts
What Will You Learn?
Below are the major topics covered by EVM training (more details can be found HERE):
- Project Management Theory, Application, and Project Controls
- Project Performance Information
- Trends and Directions
- Developing the Measurement Baseline
- Earning Method
- Earned Value in Action
- Earned Value Management System
- Incorporating Systems and Processes
- TONEX EVM Hands-On Workshop Sample
Fundamentals of Earned Value Management