Earned Value Management - Explained
I've always found the way Earned Value Management in textbooks and the way its used in real life are worlds apart. Textbooks agonize over the definitions of the terms without explaining how to apply them. EVM is a system that uses cost as a baseline to compare project activities and get a holistic view of project performance. For each activity and the project as a whole you can determine whether its on schedule and budget. The three numbers (all expressed in dollars): Planned Value - How much you should have done up to a point in time. Earned Value - The budgeted cost of the work you've completed. Actual Cost - How much you've actualy spent Using these three variables you can answer questions like: Are we over or under budget? This is the difference between the value of our budget we have "earned" (i.e. we are 50% done, we should have spent 50% of our budget). And our actual cost. Are we ahead or behind schedule? The difference between where we should be (we should be 50% done), and how much work we've actually done (we've only done 40% of the work) Here is my attempt to explain it clearly. (Like and comment - it helps the youtube algorithm!)