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Earned Value Management
What is EVM?
Earned Value Management (EVM) is a project management tool that integrates the scope, schedule, and cost parameters of a project.
Why implement EVM?
EVM benefits owners and contractors alike by allowing them to compare the cost and schedule of the work completed with the actual value of the work in place. One of the benefits of such comparisons, among many, is that it can assist the project manager in forecasting the cost and time it will take to complete the project, and in developing corrective action plans to get a project back on track, when required.
MBP's Approach
MBP works closely with owners, contractors, and consultants using an EVM methodology based on the industry accepted American National Standards Institute/Electronic Industries Alliance (ANSI/EIA) 748 requirements to:
- Define and integrate the work and organization structures to allow cost and schedule budgeting and performance measurement.
- Establish and maintain a Performance Measurement Baseline (PMB) and Management Reserves (MR), and determine the variance thresholds for performance.
- Perform the Integrated Baseline Review (IBR) with the client and contractor.
- Compute cost and schedule variances (CV, SV), cost and schedule performance indexes (CPI, SPI) and the Estimate at Completion (EAC).
- Analyze and report significant variances at least monthly and report findings to management using cost performance reports (CPR) so that corrective actions may be taken, where appropriate.
- Incorporate, and document authorized changes to the PMB.
Benefits
At MBP, we utilize our expertise in project management and controls to provide value added EVM services, which results in our clients receiving a more accurate measurement of performance throughout the life of the project. Our EVM approach is focused on supporting our clients to assist them in achieving their planned scope, schedule, and cost requirements from the time an initial budget has been prepared through project execution and closeout. Making use of our EVM services generally results in projects for which there is:
- An improved understanding of scope, schedule, cost, and performance measurement goals.
- Better visibility into project data and performance.
- Additional information to assist clients in the decision making process.
- An ability to conduct more timely and frequent monitoring of "where we are" versus "where we should be", and bottom-up reviews.
- More detailed documentation, reporting and improved consistency in the way planned and actual data are recorded.
- Enhanced collaboration and partnering among interested parties.
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