Earned Value Management or EVM is changing the way that companies do business. You may have heard that statement before, about many different things, but this is not hyperbole or exaggeration. Traditional project management cost analysis, that only states the percentage of budget used to-date, is a dinosaur. Our clients demand better, and they know the data is there. We can give them the information they want with EVM.
What is EVM?
Earned Value Management is a way for you to measure how much work your team has performed on a project – or the earned value. It goes beyond budget or hours to measure true progress. EVM will tell you where your project is at with relation to your budget.
When you use EVM to its full advantage, you should be able to answer three questions:
- What have you done so far?
- What is the current status of the project?
- What will happen next?
Applying Earned Value Management
The Project Management Institute (PMI) calls EVM a “disciplined approach to project management.” The organization finds that this technique is simple to employ in projects of all sizes, as long management is consistent and diligent. PMI says that while earned value management may be perceived as cumbersome, it simply isn’t when you structure your management efforts to reflect earned value from the beginning.
Earned Value Analysis vs Earned Value Management
Sometimes, you will hear it called Earned Value Analysis or EVA, but the result is the same. Technically, one is the ANALYSIS of earned value while the other is MANAGING that earned value, but people who practice EVA do so to manage earned value and people who practice EVM need to analyze earned value before taking action. The terms are used interchangeably in many texts. In this article, we are going to refer to the tool as EVM for consistency.
Why Do CROs Use EVM?
Modern business has the ability to collect massive quantities of data – the analysis you do needs to keep pace with that innovation.
Earned Value Management is rapidly becoming a best practice in the world of contract clinical research because it provides meaningful insights. The best CROs know this, so they incorporate earned value management techniques throughout their operations and processes. Keep in mind, EVM is a tool that looks at the planned value of a project, the budgeted cost of the work performed, and the actual cost of that work to the CRO then compares those figures to monitor variance. For a CRO, this helps to keep costs in check.
EVM also has a time component. Performance and costs are frequently measured against project schedules. This practice keeps studies within budget as well as on track. If EVM points to more unfavorable cost performance, the CRO will have that information early enough to act on that information and address any performance issues before they become problems.