Tammo T. Wilkens, MBA, P.E., PMP, CSM, has over 46 yrs. of expansive professional experience, including 31years in project management for various industries: software development, engineering, and construction for both private and public sectors. He has lectured and presented papers in multiple areas of project management and is a recognized subject matter expert in planning, scheduling, and earned value management. His experience includes professional development and mentoring of employees, training students in scheduling software systems, and developing and delivering PMP exam preparation courses.
Tammo currently teaches the Certificate in “Project Management” and “Microsoft Project 2019 Scheduling” courses at Cal State Dominguez Hills. Tammo is the author of the MS Project Training Manual.
“Earned Value is nothing more than percent complete. The beauty of it is that it can be applied to any kind of project!”-Tammo T. Wilkens MBA, PE, PMP, CSM
What is Earned Value and Why is It So Popular?
Earned Value (EV) by definition is the measure of work performed expressed in terms of the budget authorized for that work. A methodology that combines scope, schedule, and resource measurements to assess project performance and progress is Earned Value Manangement (EVM). Lastly, a rigorous (EVM) process with strict (EV) measurement and reporting requirements would result in the Earned Value Management System. Earned Value Management is the most useful tool to express progress on any project. Through the certification process of every Project Manager is the greatest task to learn how to calculate Earned Value properly. Knowledge of this tool relates to both Cost and Time Management areas. The following diagram highlights the key questions that can be answered through the Earned Value (EVM) Management System:
Earned Value Example and Answers
As you can see within our example there is a clear thought process of how we may truly compare “Apples to Oranges.” – Tammo T. Wilkens MBA, PE, PMP, CSM With this advantage, unspoken fear of using (EV) within an Agile project will disappear. It was suggested that a solid approach to a cumbersome project is to correlate the cost aspect in terms of labor hours instead of the dollar amount. This approach will alleviate the financial burden. The next diagram would share the answer to our example if you attempted to work through the model. As a refresher, the following chart will remove the mysterious nature of reporting (EV) status. For a detailed explanation of all acronyms seen here, please refer to your PMBok 6th edition.
The presentation gave us a great avenue to utilize this tool easier. Each moment was jam-packed with very valuable information. I will leave you with the following:
If you are using Microsoft Project, you may not have noticed that it calculates the EAC inefficiently. They calculate the EAC at all levels of the WBS. When in fact, you have to calculate it at the bottom and then roll it up. “The sum of the products is not equal to the product of the sum.” -Tammo T. Wilkens MBA, PE, PMP, CSM
If you found the presentation valuable, please Carpe Diem and register for your next event at pmi-oc.org.