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GEIA EIA-748-B Document Information:
Title
Earned Value Management Systems
Government Electronics & Information Technology Association
Publication Date:
Jun 1, 2007
Scope:
INTRODUCTION
An Earned Value Management System (EVMS) for program management
will effectively integrate the work scope of a program with the
schedule and cost elements for optimum program planning and
control. The primary purpose of the system is to support program
management. The system is owned by the organization and is governed
by the organization's policies and procedures. The principles of an
EVMS are:
• Plan all work scope for the program from inception to
completion.
• Break down the program work scope into finite pieces that can
be assigned to a responsible person or organization for control of
technical, schedule, and cost objectives.
• Integrate program work scope, schedule, and cost objectives
into a performance measurement baseline plan against which
accomplishments may be measured. Control changes to the
baseline.
• Use actual costs incurred and recorded in accomplishing the
work performed.
• Objectively assess accomplishments at the work performance
level.
• Analyze significant variances from the plan, forecast impacts,
and prepare an estimate at completion based on performance to date
and work to be performed.
• Use EVMS information in the organization's management
processes.
The essence of earned value management is that, at some level of
detail appropriate for the degree of technical, schedule, and cost
risk or uncertainty associated with the program, a target planned
value (i.e., budget) is established for each scheduled element of
work. As these elements of work are completed, their target planned
values are "earned". As such, work progress is quantified and the
earned value becomes a metric against which to measure both what
was spent to perform the work and what was scheduled to have been
accomplished.
Schedule variances, which cannot be seen in a stand-alone budget
versus actual cost tracking system, are isolated and quantified,
and the cost variances are true cost variances that are not
distorted by schedule performance. This provides for early
identification of performance trends and variances from the
management plan, and allows management decision making while there
is adequate time to implement effective corrective actions. Without
earned value, one can only compare planned expenditures with how
much has been spent, which does not provide an objective indication
of how much of the planned work was actually accomplished.
For the benefits of earned value to be fully realized,
comprehensive planning at the outset, combined with the
establishment and disciplined maintenance of a baseline for
performance measurement, are required. This combination of
comprehensive planning, baseline maintenance, and earned value
analysis yields earlier and better visibility into program
performance than is provided by non-integrated methods of planning
and control. This enhances overall program management value through
decisions based on the use of EVMS information.
The intent is to provide management information using the
organization's resources and a scaled EVMS application that
achieves the program requirements and is compliant with the EVMS
principles. EVMS scalability is viewed as spectrum employing the
principles of EVMS as fundamental to all programs and the EVMS
guidelines (Section 2) as applicable to large complex and/or
high risk programs. This scalability allows any program, regardless
of size and complexity, to realize the benefits of earned value
management.
Note: In the context of this standard, a program is a group of
related projects supporting a mission that are managed in a
coordinated way to obtain benefits not obtained from managing them
individually. As the management principles are the same to achieve
success the two terms, program and project, are used
interchangeably in this standard.
Note: In the context of this standard, organization is used as a
generic term and may include but is not limited to: public and
private corporations and companies; Federal government agencies,
departments and activities; state and local government entities;
Federally Funded Research and Development Centers (FFRDC) and
similar organizations, educational institutions, and non-profit
entities that are likely to be owners of earned value management
systems.
About IHS
IHS (NYSE: IHS) is a leading global provider of critical technical information, decision-support tools and related services in a number of industries including aerospace and defense, automotive, construction, electronics, and energy. IHS serves customers ranging from large governments and multinational corporations to smaller companies and technical professionals in more than 100 countries. IHS been in business for more than 45 years and employ more than 2,300 people around the world.
