Earned value management - commonly abbreviated to EVM - is an important tool in the project manager’s repertoire. A set of techniques for objectively measuring progress on any major project, EVM was first developed in the 60s by the US Defense Department and quickly became standard practice in government contracting. More recently, it’s gained traction in the wider private sector, in part because it’s so useful in settling contract disputes.
EVM measures project performance and progress by combining measurements of scope, time and costs. The practice is great for demonstrating progress and is equally useful in predicting potential problems or shortfalls in the future. While you can apply EVM to any project, it is usually used on larger projects, but it is increasingly being used on more complex, short term projects like shutdowns, turnarounds and outages (STO) in the oil and gas and nuclear industries.
Here’s a very simple, theoretical example. Your STO project is scoped to cost $10m and take two months. At the end of month one, you’ve spent $5m. Superficially, it looks like you’re on schedule. But if you’ve done more than half of what you expected by this stage, you’re ahead of the game. By the same principle, if you’ve only achieved 25% of the work you have a problem. EVM can tell you where you are, in real time, at every stage of the STO project.
Putting EVM into action usually means plotting the curves of planned value against actual earned value. By comparing the two, a project manager can identify every element of work completed and present the STO team with an accumulated total of earned value at the end of every day during the project’s timescale.
Of course, while that’s an easy principle to describe, it can be a lot harder to achieve, particularly in the context of a complex STO project.
To make EVM work in your favor you need to have all your information in one place, in real time. Project management software can do this for you, and mpower from Monitor has been specifically tailored to give you the data you need, when you need it.
mpower uses integrated dashboards to give you cost and performance information in a single comprehensive view. It saves you from compiling reports, as you can clearly see what actions have taken place and what remains to be done, and information can easily be shared with the entire team, as well as other stakeholders.
mpower has been specifically developed and tailored for STO projects. It supports efficient consolidation and management of the entire scope of work, including cost estimates and budgets. It links financial, scheduling and work package data on one dashboard, tracking actual incurred and accrued costs, and you can access all functionality from anywhere in the world, via the web.
As with any new system, implementing mpower requires an investment in time. But many of its features are designed specifically for EVM practice, so it can be easily and quickly deployed on your STO project, even if work has already begun. mpower also lets you leverage value from your existing investment, because it integrates seamlessly with popular software suites including SAP, Oracle E-business, IBM Maximo, Primavera and Microsoft Project.
The high performance, fully integrated project cost management solution