Earned value management under risk diamantas, viktor k. Pdf engineering, procurement, and construction epc specially in oil, gas. Gregg will present the use of risk work packages with budget and schedule values entered into the project planning process. Wp1081 earned value mosaic projects project management. Interfacing risk and earned value management x 17477p2fm. Lauren participated in the group that produced the apm booklet, interfacing risk and earned value management and assisted in early development of a basic ev examination for the apm. Evm helps managers evaluate and control project risk by measuring project performance and progress. Dedicated online training module in a structured and professional manner to understand the fundamental concepts of earned value management system evms. Interfacing risk and earned value management standing of how project management planning, monitoring and control can be improved through the integration of the two process. Earned value management focuses on managing the pmb component of the overall project cost.
Purpose epas evm procedures describe the agency methods for collecting and reporting performance information on major it investments see section 9, definitions, for a description of major it investment. Interfacing earned value and risk management risk decisions. Jan 30, 2012 david hillson, the risk doctor, explains how earned value management evm and risk management can be used together to improve project decisionmaking and control. For each chunk of work, define its value as the budget assigned to it. Aaces earned value professional certification study guide, 3rd edition. Jan 01, 2011 earned value management under risk diamantas, viktor k. In the case of earned value management, performance measurements focus on cost and schedule management. In this presentation david hillson offers practical.
Interfacing risk and earned value management ebook. Earned value management under risk, international journal. Earned value management 1 earned value management evm is a project management technique that objectively tracks physical accomplishment of work. Ecitb level 3 and level 5 diploma in project controls.
Prior to that lauren was a member of the australian performance measurement association from 1991. Project management is sometimes compartmentalised into its discrete elements product decomposition, planning, scheduling, cost estimating, requirements management, risk management, and performance techniques such as earned value management. Management of construction cost contingency covering upside. Earned value management under risk, international journal of. Complete schedule risk analysis for remaining work, estimate work remaining. Evm is used to track the progress and status of a project and forecasts the likely future performance of the project. A brief introduction to earned value management and its use. Earned value management evm and risk management rm are very.
Consequently, both evm and rm encourage those using the techniques to take appropriate. Pdf impact of integrating earned value management and risk. Interfacing earned value with risk management youtube. The cost management focuses on the cost performance of the project. Interfacing risk and earned value management apm 7. However, this baseline must be agreed against a realistic project projec.
Integration between evm and risk management repositorium. Earned value management evm is a project management tool that effectively integrates the project. Earned value management involves the establishment of a baseline that combines work, budget, schedule and responsibility. Aug 21, 2017 earned value management is the key to unlocking the door to a plethora of project status metrics is earned value, which is a way of placing a value on the progress of work achieved. Interfacing earned value and risk management by val jonas, ceo, risk decisions group lauren bone, managing director, bone consulting ltd. But both techniques emphasise the need to move from analysis to management, using the information to support proactive decisionmaking. Earned value management evm is an industry standard for monitoring the performance of ongoing projects.
This guide identifies the added value achievable when evm and rm are combined in a project context see appendix b. Benefits of interfacing risk management and earned value management potential benefits to be had from interfacing evm and rm good practice, and hence the benefits to project management as a whole, are suggested in appendix b, which identifies the improvement to rm from evm good practice and to evm from rm good practice. This paper examines how organizations can realize this integration, an effort that can help them develop the risk management and evm maturity needed to generate integrated project. You could compare this to the actual amount of work that you. Much in earned value management evm hinges on the monetized value you place on accomplished work or progress on deliverables. Earned value management can be a wonderful toolto integrate scope, time and cost. This integrated approach to managing the projectgives us visibility into project performanceand lets us forecast future performance. Earned value analysis is the project management tool that is used to earned value. Project management is sometimes compartmentalised into its discrete elements product decomposition, planning, scheduling, cost estimating, requirements management, risk management and performance techniques such as earned value management. Edwina was a member of the working group that produced the apms interfacing risk and earned value management guide and is a member of the apm risk specific interest group committee. When you complete that chunk of work, you have earned its value. This paper examines how organizations can realize this integration, an effort that can help them develop the risk management and evm maturity needed to generate integrated project cost and. Evm relies on the establishment of a baseline against which performance can be measured in terms of schedule, resource usage and cost. Earned value analysis and risk analysis to expose underlying drivers of performance.
It looks at the relationships between the earned value ev and the actual cost ac. Management of construction cost contingency covering. In use since the 1960s, the eia748 standard for earned value management systems evms, section 2, provides a list of the 32 guidelines for use in establishing and applying an evms. Earned value ev is a way to measure and monitor the level of work completed on. Risk management and earned value management are both used to improve project decisionmaking and control. David hillson, the risk doctor, explains how earned value management evm and risk management can be used together to improve project decisionmaking and. Evmme course contents mosaic projects project management. The schedule management focuses on the schedule performance of the project. Interfacing earned value and risk management sound risk management process and robust earned value management evm application each offer the opportunity to improve project control and provide the project manager with reliable information on which to base proactive management decisions.
An integrated diagnostic tool for program management, commander n. Earned value management evm and risk management rm processes share a common aim of providing decision makers with the best informa tion available. Earned value management evm and project risk management are normally considered separately in project management. Sound risk management processes and robust earned value management application each offer the opportunity to improve project control and provide the project manager with reliable information on which to base proactive management decisions. Interfacing risk and earned value management book shop. Apm discussed interfacing of earned value management evm and risk management rm for monitoring and control ccr as follows. Earned value management is the key to unlocking the door to a plethora of project status metrics is earned value, which is a way of placing a value on the progress of work achieved. Refer to the ipmr implementation guide for ipmr tailoring guidance.
Organize the project programme portfolio scope into a meaningful structure for execution and implementing the. This guide looks at the benefits of looking at project management techniques as a cohesive whole. Cdc unified process practices guide earned value management up version. Most project managers that use earned value performance management consider risk as a somewhat separate process with risk registers, mitigation and contingency planning. Management reserve, technical performance measurement, earned value, and risk management. Earned value management evm 122506 evm introduction 2 122506 evm introduction 2. Impact of integrating earned value management and risk.
The evm procedures explain how epa program offices are to receive, organize, analyze, and report. Management reserves mr are the contingencies created to cover unforseen risk events and will only be transferred into the baseline if an unexpected risk event occurs. The earned value management and risk management are two well known and. Integrating risk and earned value management white paper introduction in most organisations, risk and earned value ev management are undertaken as separate processes. Earned value management system guideline scalability guide. More important, earned value can be an early warning signthat we need to make adjustments if we want to stay on the project plan.
All too often, the disciplines are practiced in isolation with focus on the mechanisms rather than the management value. Interfacing risk and earned value management a practical. The actual cost of work performed is also below the. Potential benefits to be had from interfacing evm and rm good prac tice, and hence the benefits to project management as a whole, are sug gested in appendix b, which identifies the improvement to rm from evm good practice and to evm from rm good practice. Interfacing earned value and risk management by val jonas, ceo, risk decisions group lauren bone, managing director, bone consulting ltd management solutions. Earned value management evm is a proven project management practice that provides visibility into a projects technical scope, schedule,and cost progress. Sep 29, 2017 risk management and earned value management are both used to improve project decisionmaking and control. Pisano, sc, usn, program executive office for air asw, assault, and special mission programs peoa practical risk management. The united states department of defense dod has spearheaded many major advances in modern project management. The integration between earned value management evm and. Interfacing risk and earned value management pgc symposium. One of these involves the integration of risk management and earned value management evm. The performance baseline is set up in the planning phase to measure any time and cost. An automated framework for the integration between evm and.
Authors of the existing studies have generally focused on either evm or. Evm integrates the scope, schedule, and cost of a project. More often than not, even where the need for a level of integration has been recognised, processes are not in place to assure the correct use of data derived from each of. Evm integrates these factors into a single practice. Wayne abba president college of performance management. Integrated earned value management and risk management. Paper presented at pmi global congress 2012emea, marsailles, france. Consequently, both evm and rm encourage those using the techniques to. L bone, v jonas cost performance index stability, national contract management journal, 1993 vol 25. The performance baseline is set up in the planning phase to measure any time and. Plan academy earned value management formulas cheat sheet. Management reserves mr are the contingencies created to cover unforseen risk events and will only be transferred into the baseline if an unexpected risk event occurs and is at the discretion of the project sponsor.