Other Benefits of EVM

Planning Tool

EVM imposes the discipline of planning all work in sufficient detail so that the cost, technical effort, and schedule dependencies are known at the outset. When EVM is used as a planning tool, all work is planned from the beginning—-current work in detail, future work outlined at higher levels. As the work is planned to a manageable level of detail, it is broken into descriptive work packages that are allocated a portion of the program budget. These units are then spread across the program schedule to form the performance measurement baseline, which is used to detect deviations from the plan and give insight into problems and potential impacts.

Management Reporting Tool

EVM measures program status with objective methods to determine work accomplished. These measures are based on specific criteria that are defined before the work starts. As work is accomplished, its value is measured against a time-phased schedule. Programs should use a networked schedule that highlights the program’s critical path.47 The earned value is measured in terms of the planned cost of work actually completed. This added feature of including earned value allows for objective measurements of program status that other reporting systems cannot provide.

Analysis and Decision Support Tool

EVM indicates how past performance may affect future performance. For example, EVM data isolate cost and schedule variances by WBS element, enabling an understanding of technical problems that may be causing the variances. Problems can be seen and mitigated early. In addition, opportunity can be taken in areas that are performing well to reallocate available budgets for work that has not yet started.48

  1. For information on reliable integrated master schedules, see GAO, Schedule Assessment Guide: Best Practices for Project Schedules, GAO-16-89G (Washington, D.C.: December 2015).↩︎

  2. We consulted the expert community on the issue of reallocation of budget for completed activities that underrun. The experts explained that while the term budget in EVM represents the plan, it is not the same thing as funding. Therefore, in EVM, a control account’s budget is fully earned once the effort is 100 percent complete, even if the actual cost of the effort was more or less than the budget. As a result, budget for past work, earned value, and actual costs need to stay together in an EVM system in order to maintain reporting integrity. However, if a WBS control account’s or work package’s actual cost is underrunning the planned budget, this may suggest that the budget for future work packages may be over-budgeted as well. If that is the case, then budget for future work could be recalled into management reserve to be available for critical path activities.↩︎