Earned Value Management Tool

One of my best tools is an implementation of the earned value management technique for use with Excel spreadsheets. Earned value management ("EVM") is a child of the old PERT/COST system of project management developed by the Department of Defense in the 1960's (see Wikipedia for a detailed description). It provides a quick, graphic means of determining progress towards schedule as well as budget.

 

A typical EVM chart is shown below. The black line represents the project fee budget distributed over the project duration. The red line represents the actual fee spent so far on executing the project. The blue line represents the project fee that has been earned. The relationship between these lines indicates whether the schedule and budget status of the project.

If the blue line is above the red line then the project has earned more fee than it has spent so the project is making money. Conversely, if the red line is above the blue line then the project has spent more fee than it has earned and, thus, is losing money.

 

To determine progress against schedule we look at the relationship between the blue and black line. If the blue line is to the right of the black line then we have earned more fee than expected for a given moment in time - so we are ahead of schedule. When the blue line is to the left of the black line then we are behind schedule since we have not earned the fee that the budget assumed would be earned by that moment in time.

 

I can incorporate this type of analysis into your project tracking Excel spreadsheet if you have one, or create one for you.