Earned value (EV) is one of the most sophisticated and accurate methods for measuring and controlling project schedules and budgets. EV has been used extensively in large projects, especially in government projects. PMI is a strong supporter of the EV approach because of its ability to accurately monitor the schedule and cost variances for complex projects.

Although it is sophisticated, EV can be scaled to be appropriate for any size of project. The key is in the project planning.

There are three primary advantages to using EV:
1. Accuracy in reporting
2. Ability to deal with the uneven rate of project expenditures and work
3. The early warning it provides project managers, allowing them to take the necessary corrective action should the project be spending more money than it is physically accomplishing.

Other less professional methods for measuring budget and schedules generally only monitor the percent of the time through the schedule and make the often mistaken assumption that this is also the percent that the project should be through the budget. But cost and project progress generally are not evenly expended through a project. The reason EV stands above the alternatives is that it accurately deals with this reality. EV warning signals become available to management as early as 15 to 20 percent into a new project, in ample time to take corrective measures.

How to Implement EV

In order to employ earned value, we must have a baseline plan (including a detailed, workload leveled, progress schedule) in place that will allow us to continuously measure seven points of data. The textbooks, including the referenced ones at the end of this paper, say that this is easy. However in my reality it often is not easy because scheduling to this level of detail at the beginning of the project is challenging and dynamic.

Earned value requires the kind of data most projects have, but we may not look at the data in quite the same way. Earned value has a focus on its percent-complete position