Earned Value Management

Earned Value Management

Earned Value Management (#EVM) has a long history back to the 19th century. The United States Department of Defense (DoD) is prominent advocates since 1967. EVM was adopted as a standard ANSI/EIA-748 in 1992. (Source).
However, there are some criticisms:


With growing popularity of agile methods, EVM was criticised as being too cumbersome and wouldn’t work without a work breakdown structure (WBS) and a baseline of fixed requirements in the midst of rapidly changing requirements.
#AgileEVM solves this by introducing the following mapping:
EPC (Expected percent comlete) = number of completed itrerations / number of planned iterations
APC (actual percent complete) = number of completed story points / number of planned story points

Earned Schedule Management

Another criticism of EVM is the effect that SPI becomes less meaningful if a project runs beyond the original dead line – called the “Late finish problem”: SPI = EV/PV approaches 100% at project end not showing any delay. Similarily there is also an “Early finish problem” if the project finishes too fast. (Source)
A proposed solution is the introduction of Earned Schedule Management (ESM) expanding EVM by the following metrics mesured in time (not in cost):
ES (Earned Schedule) = time at which EV = PV
AT (Actual time) = until status date
TV (Time variance) = ES – AT

Value Delivered

Last but not least, EVM is considered as too much focussed on cost not recognizing the real value because PV is based on the cost baseline. While this is okay in a Waterfall project, in agile or lean contexts additional metrices shall be considered, e.g.

  • Value delivered
  • Features used/features delivered
  • Team member happiness
  • Escaped defect counts or trends

I’ll elaborate on this in a seperate post.