Earned Value Analysis in Project Management

If you have trained yourself to be a project manager and have a basic understanding of how to do an earned value analysis, you will save your organization time and money. It is an instrument whose correct use will lead you to detect what can be the situations that will be hard to deal with and their possibility of happening problems earlier than normal. For this reason, this is one of my favorite instruments to use in project management.

What is Earned Value Analysis?

If we ask what the it is for, we can say that it is a tool that helps to analyze the data related to the performance of the project since the beginning and predict how the project will progress in the next stage. The information obtained from this analysis can be used to optimize the project strategy and thus increase the chances of success. In a project, realized and earned values are different measures of progress. Actual cost is the amount spent during a project, while earned value is the amount of work completed. At the intersection of both lines, there is no work to be done for that period.

What is it used for?

Project managers can use it as a way to measure positive and negative changes and improvements, a way to assess whether we are making good progress or not. Thanks to it, projects can be better managed with useful and practical data. Establishing a cost baseline and schedule baseline is the first step in using earned value analysis. To calculate earned value, they track actual costs and compare them to the baseline. With the analysis of this data, a project manager can identify the flaws in the project and make the necessary adjustments to keep it on track.

See also: Variance Analysis

Regression Analysis

Reserve Analysis

MultiCriteria Decision Analysis

Monte Carlo Analysis

Sensitivity Analysis

What-if Scenario Analysis