Managing project cost involves several moving parts. Project managers need to consider the costs of labor, material, and so forth when defining a project’s required resources. Then, they need to assign estimated costs to these resources, create a budget (which usually requires approval), and plan a way to control the costs as the project is executed. As project managers know, the execution of project is often
very different from how it is planned. So, what can project managers do to stick to the budget in an unpredictable world?
Earned Value Management, or EVM, is a technique used to track the progress of a project against the original project plan. Project managers use this tool at different times during the course of a project to analyze how the project schedule and project costs deviate from expectations. EVM can be used on large or small projects to
1. measure achieved results,
2. forecast project completion time and the final project cost,
3. detect issues and calculate variances in the schedule and budget,
4. and improve overall control of project success.
There are plenty of available resources that can be used to put EVM to work on your projects. Many people rely on Microsoft Project or on enterprise resource management software provided by their company. However, there are several tools out there like this free Excel template that can help you get started.
For a thorough exploration of EVM, here is a free class on how to get started with Earned Value Management. It provides an in-depth discussion on how to benefit from this tool and start delivering project results with minimal deviation from the schedule and budget.
Don’t have time to watch the entire class? Here is an article with a basic explanation of all the calculations involved in EVM and how to use them.