An earned value management system is important to make sure you’re compliant and following guidelines for US federal contracts. In general terms, earned value management, or EVM, is a project management technique that helps predict whether your initiatives will be finished on time and within budget. The relationships between cost and schedule give EVM the ability to predict performance.
Earned value management software platforms are best for project teams that want to come in on-budget based on industry-standard methodologies.
These software platforms have other benefits aside from satisfying compliance guidelines as well.
When you use an EVM system, you can track your project performance as you go, including not only the total project costs but the costs for each of the projects falling under that umbrella. The overarching benefits of earned value management software include real-time visibility, insight, and transparency. You can see early on when problems could come up so you can correct them accordingly and in a timely way.
What Is Earned Value Management?
Earned value management is a set of calculations that look at cost and time to monitor scheduling and budget. It’s a way to see the current project status and forecast where the project might be going.
A value is assigned to each task, laying the groundwork for a formalized process.
EVM standards are used by the Department of Defense.
Typically EVM would rely on breaking a larger project into separate tasks. Each task is assigned a value, and everything, including the tasks and subtasks, equate to 100%.
When something is completed, it’s added to the total earned value.
Earned value looks at the planned value and actual cost as well. Planned value is the cumulative value anticipated to have been earned by any given point in a timeline. Actual cost is the money you spend to achieve a certain amount of value.
Prior to this approach, project management was based only on comparing the budgeted costs to actual costs.
Clients to like the EVM approach because it boosts their confidence in the contractors they’re working with, and it may also improve communication and client control over a project. Contractors also benefit from this approach because it helps them with risk-planning and to take corrective action when needed.
Objectives of EVM Software
An EVM software solution should achieve a certain set of objectives.
First, it should be able to assign portions of a budget, which require a definition of the scope of work. Then, there should be a baseline that’s established to evaluate cost performance and progress.
Many modern EVM software solutions will include scheduling and cost components, reporting, and accounting. You could also opt for software that integrates with your existing accounting platform.
Features to Look for In Earned Value Management Software
Earned value management software is important to have in place to budget, measure progress, track changes, forecast, and report performance.
The following are features and things to look for in EVM software.
Import Proposal Data
It can be useful to find a software solution that lets you input your estimate and cost estimate data into the system to create your budget baseline. Then, as your budget changes, you can make updates according to workflow process features.
Look for an interface that feels easy-to-use and intuitive. This will let everyone access information easily in a centralized database. You should also be able to set specific controls for who can access what. For example, you might want software that lets you customize specific views of data sets as needed.
Look for an EVM software solution with robust, comprehensive reporting that will let you create pivot tables.
Who Should Use EVM Software?
An EVM software solution can be appropriate in a variety of situations and for different projects, including:
- Small and medium-sized business contractors can use this type of software for their projects.
- For the oil and gas industry, it’s possible to merge large projects and also this brings together a sense of visibility for teams that are dispersed around the country or globe.
- There is a place for EVM software in scientific research which can help teams create forecasts that they can then compare to their funding.
EVM software can be used in engineering and construction to organize budgets, costs, and also to have access to data quickly that can be used in decision-making.
Finally, as you’re choosing EVM software, don’t forget about the importance of strong customer support. You should have a guarantee from your provider that if you submit a ticket, it can be resolved quickly.
Having EVM software can take complex scenarios and make them a manageable part of your projects for better accountability and outcomes.
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