Earned Value Management

Writers' First Review Draft:    (2V91)

Term    (2VIG)

Earned value management (EVM)    (2VIH)

Origin/Source for Inclusion of the Term    (2VII)

OMB Circular No. A–11 (2005) Section 300—Planning, Budgeting, Acquisition, And Management of Capital Assets    (2VIJ)

OMB Context Definition    (2VIK)

EVM is a project (investment) management tool effectively integrating the investment scope of work with schedule and cost elements for optimum investment planning and control. The qualities and operating characteristics of earned value management systems are described in American National Standards Institute (ANSI)/Electronic Industries Alliance (EIA) Standard –748–1998,Earned Value Management Systems, approved May 19, 1998. It was reaffirmed on August 28, 2002. A copy of Standard 748 is available from Global Engineering Documents (1–800–854–7179). Information on earned value management systems is available at www.acq.osd.mil/pm.    (2VIL)

Reference/URL OMB Context Definition    (2VIM)

OMB Circular No. A–11 (2005) Section 300—Planning, Budgeting, Acquisition, And Management of Capital Assets    (2VIN)

Business Definition    (2VIO)

EVM is an industry standard way to: • Measure a project’s progress • Forecast its completion date and final cost and • Provide schedule and budget variances along the way.    (2VIP)

By integrating three measurements, it provides consistent, numerical indicators with which you can evaluate and compare projects.    (2VIQ)

Reference/URL for Business Definition    (2VIR)

Earned Value Analysis: What Is It? Why Do I Need It? How Do I Do It? http://www.osec.doc.gov/cio/oipr/ITPLANPAGE.HTM Accessed June 29, 2005    (2VIS)

Technical Definition    (2VIT)

Earned Value Management is a project management technique that relates resource planning to schedules and to technical cost and schedule requirements. All work is planned, budgeted, and scheduled in time-phased planned value increments constituting a cost and schedule measurement baseline. There are two major objectives of an earned value system: to encourage contractors to use effective internal cost and schedule management control systems; and to permit the customer to be able to rely on timely data produced by those systems for determining product-oriented contract status.    (2VIU)

Reference/URL Technical Definition    (2VIV)

“Definitions of Terms” http://www.balancedscorecard.org/basics/definitions.html Accessed June 29, 2005    (2VIW)

Context Definition 1    (2VIX)

An EVM is a set of business practices that, when applied to a project or program: • Integrate scope, schedule, and cost objectives, • Establish a baseline plan for accomplishment of project or program objectives, and • Employ earned value techniques for performance measurement during the execution of the project or program.    (2VIY)

Reference/URL Context Definition 1    (2VIZ)

“Project Management and The Acquisition Process”, Jerry Harper, Department of Commerce Office of IT Policy & Planning,    (2VJ0)

Context Definition 2    (2VJ1)

Reviewer Comment: 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 finished so far with the estimates 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.    (2VJ2)

Reference/URL for Context Definition 2    (2VJ3)

Reviewer Comment: Earned Value Management, “Wikipedia”, http://en.wikipedia.org/wiki/Earned_value_management Accessed July 20, 2005    (2VJ4)

Context Definition 3    (2VJ5)

Reference/URL for Context Definition 3    (2VJ6)

See Also Related Terms    (2VJ7)