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2.4 DETERMINING THE APPLICABILITY OF THE EVM SYSTEM (EVMS)
2.4.1 INTRODUCTION
An EVM system (EVMS) is a system of principles, methods, and processes that integrates with tools and people to
assess performance of integrated portfolio, program, or project management as described in Section 1. Tailoring the
EVMS to meet stakeholders’ needs is a consideration in project initiation as described below. EVM can be as simple as
an integration of the PMBOK
®
Guide processes with the addition of EV techniques. It can be an enhanced, disciplined
framework used within a system for the purpose of managing a project that integrates scope, cost, and schedule time-
phased baselines with established performance measures. Often the EVMS is integrated with other organizational
needs and is described as an enterprise-level EVMS description that governs the use of the framework. It also describes
the processes, practices, techniques, procedures, rules, and tools to be implemented in a project. A project team may
also consider tailoring the framework by considering lean principles to meet project and stakeholder needs.
An organizational EVMS typically codifies EEFs, such as organizational culture and governance, information
technology tools, legal restrictions, customer requirements, and so forth, into a system description. Other procedures
are incorporated as OPAs, which are usually implemented within a project management set of processes/system.
Depending on the EEFs, the project team can usually tailor the implementation of the organizational EVMS to the
needs of the project. Not all elements of an EVMS need to be implemented on a project for EVM to be an effective
management tool, as implementations can be simple or elaborate.
2.4.2 CONSIDERATIONS FOR IMPLEMENTATION OF EVMS
During project initiation, a decision is made as to whether an EVMS will be used for the project and, if so, to what
extent. EVMS comprises the additional work that includes development of processes, definitions of stakeholders’ roles and
responsibilities, and the supporting IT infrastructure. The implementation of an EVMS becomes part of the project scope as
a deliverable, and it is incorporated into the project management plan and the WBS scope description/dictionary. Another
approach is to consider the implementation of an EVMS as a separate project that is connected with the current project.
During project initiation, it is important to assess additional benefits/considerations for other functions/organizations
within the company to use an EVMS, including:
Is the project considered to be a complex/high-risk project?
Is EV mandated by the sponsor or company policy or improvement action initiated by the project/program/
portfolio manager?
Is accurate, timely, and reliable reporting to stakeholders a key success factor?
22 Section 2
Additional questions to consider when making the decision to implement EVMS that result from consideration of
EEFs and/or OPAs are:
Can you provide reliable data for your project status?
If you use EVM, how mature is the organization that is applying EVM?
Is it used in all the projects in the organization or only in some areas?
Do people at all levels understand the concepts that EVM uses?
Does your organization typically use EVM? If not, what obstacles does that pose?
Does your organization’s project governance model already incorporate EVM?
Are there manual or software methods defined for your organization’s use of EVM?
Are there subject matter experts (SMEs) available to assist with the development and use of EVM?
Does the contract (if applicable) mandate EVM?
Are there plans, policies, or procedures for performing EVM in your organization?
Are there lessons learned available in the organization’s knowledge management database/repository related
to EVM?
Are there directives regarding EVM from the enterprise PMO?
Is there a project management information system (PMIS) used by the organization?
Are there templates to aid in the use of EVM?
Do the sponsor and other key stakeholders understand EVM?
Do the accounting personnel understand EVM?
If no OPAs are available to implement EVM on your projects, are there sufficient resources and budget to
develop the required project processes to implement EVM?
If EVM is not used to manage project performance, what will the project manager and project team use to
manage project performance?
Are there project constraints (schedule, cost, scope, quality, benefits, and/or risk) that are influencing the
decision to use EVM?
Do the EEFs and OPAs include tailored approaches for the agile/hybrid components of the project?
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Are partner organizations and subcontractors ready to systematically provide data required to support EVM?
What are the requirements of the financing organizations and other stakeholders regarding performance reporting?
A consolidated set of OPAs into an EVMS description is not required but might be advantageous when an
organization intends to implement EVM systematically across its portfolio of projects. The EVMS to be used should be
described in the project management plan as outlined in Section 3.2. Specific needs to be considered when planning
an EVM system include:
Tailoring of an existing organizational EVMS (OPAs) in coordination with the process owner, if applicable;
Tailoring/interface with organizations and/or customer PMIS; and
Standardization of indexes, thresholds, documentation, and reporting.
The project management plan should address the extent to which the project will use OPAs and EEFs, and how
the system will affect the integrated management approach. Whereas other project management Knowledge Areas
or supporting activities may be managed by a specialist, the accountability of integration management should not be
delegated or transferred. The project manager has the overall responsibility for the execution of the project and should
lead the design and implementation of the EVM framework on the project. A management tool is aimed at helping
managers to make better decisions without eliminating accountability.
2.4.3 TAILORING OF EVM
Once the implementation of EVM is established, it may be tailored for use on projects based on complexity, risk,
and other factors as outlined in this section. The application of EVMS descriptions and OPAs should be tailored based
on stakeholder requirements, project risks, project funding, project importance, complexity, and other considerations.
The stakeholders and project team should provide input when determining whether to implement EVM on a project.
Examples of tailoring EVM include:
Defining and having to track various items in the baseline, such as undistributed budget and authorized
unpriced work;
Reporting variances on a cumulative basis only or to a specified level of the work breadkdown structure (WBS);
Requiring varying threshold levels for variance reporting;
Using EVM only on some specific scope components;
Revising the level of suppliers’ and contractors’ involvement;
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Using available information from existing data sources such as financial systems, project management
systems, and time-tracking systems; and
Using a governance approach structured to meet the organization’s objectives, yet being flexible enough to
implement an agile/hybrid project.
The decision to tailor an EVM approach should be made during the initiating phase, described in the project charter
prior to the planning phase (see Section 3), and finalized during the planning phase.
2.4.4 DEPLOYMENT OF EVMS
The deployment of an organization-wide EVMS can be approached as a separate project with the full complement
of project attributes. When developed within a specific project, the project may become a subproject or a scope
component of it. To be successful, the EVMS deployment should be managed under a project management process.
Consideration should be given to the following areas:
Organizations should decide if they will:
Blend the additional earned value framework needs into existing process documents,
Write completely new and separate process documents, or construct a combination of both.
Since EVMS is a distributed, collaborative, inclusive (integrated) management system, its principles should
be understood and embraced by all project management personnel and decision leaders through effective
training and mentoring.
Sponsorship toward the application of EVM should be provided by project governance.
Most commercially available project management software contains an EV module with varying levels of scope,
cost, and schedule collection required. The need for new performance management tools and their integration
with the legacy infrastructure within an organization should be addressed along with the development of data
process flow between systems.
High-level requirements should:
Include an analysis of the project complexity and stakeholder needs,
Include the organizational systems to establish governance structure for managing program and project
risks across all teams, and
Ensure governance structure is tailored to be consistent with the project requirements, including stakeholder
needs.
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Each of these areas above should be addressed during planning and implementation. The degree to which each
item is addressed is entirely based upon the effective tailoring of the system to suit each organization’s and project’s
specific performance management environment, objectives, and goals. From the start of the project, during initiation
and planning, care should be taken to align the EVM requirements to the individual situation. Later, continued
functionality and benefits should be verified as the system is deployed and used during project execution. Continuous
improvement of the EVMS should be pursued actively by the project team throughout the project (see also Section 4.7).
During closing, as described in Section 5, both a lessons-learned exercise and knowledge management activities are
conducted to ensure the improvement of the EVMS for the subsequent project phases and future projects.
Once EVM is implemented, the use of information related to scope, schedule, and cost is made available for
project performance analysis. This provides the leadership with valid, timely forecasts and feedback to guide portfolio,
program, and project management decision making toward success.
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