Earned value allows monitoring the work from two related perspectives—schedule and cost—and since they are often independent, the two views provide an integrated look at progress.
Integrated cost control focuses on aligning actual costs of the work performed with what it should have cost to do the work performed, according to the original cost estimate. Thus, costs are not looked at against the planned budget, but rather against the work actually done to date. This approach integrates cost control with the work performed, e.g., it is OK to be over the original cost estimate by $100,000 if you have done $100,000 worth of work and you are that much ahead of schedule.
Cost variance (CV) = budgeted cost of work performed - actual cost of work performed
Schedule variance measures the work performed against what it should have cost to the work performed. Earned value is essentially the value of the work you have done, enabling you to invoice the customer.
Schedule variance (SV) = budgeted cost of work performed - budgeted cost of work scheduled
Quality is integrated into the performance-monitoring system by assuring that reports on completed work are based on doing it right the first time. Team members understand in an integrated monitoring system that when they report %complete, work is indeed complete according to the quality standards in the scope of work and technical specifications for the work.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.