In its simplest sense, Earned Value Management (EVM) can be considered as a technique which is used to measure and monitor the project progress, primarily with an eye on cost parameters
EVM essentially provides a platform where one can observe, monitor the project scope, monitor progress, measure the difference between estimated aspects of the project & the delivered aspects of the project.
Earned Value Management, has a very important role in any project that is to be delivered. It ensures the success of the project. It even helps in finding if there is any lag in any aspect of the project during the time when the project is in process and also after its completion.
Now, the question arises as what are the aspects or the parameter that should be looked upon while determining Earned value Management in a complex project. The answer to this question lies in using a tool like a Balance Score Card which can provides the metrics with the help of which one can apply the earned value management principles on any project irrespective of its complexity.
While smaller projects are not difficult to negotiate, large projects which may span months and may include various constraints are best negotiated with KPIs. Under EVM one of the most important parameter is financial aspect of the project. For estimating the financial aspect, KPIs such as "Profitability Percentage", "Budget of Project Execution", "Earned revenue", and "Cost of work performed" are determined. Then these are compared with the parameters the estimates that were earlier estimated while laying out the project.
Just briefing on the financial aspect of the project is not sufficient. We need to estimate the project costing also. This will include all the costs involved in the project. This can be calculated by determining using KPIs like "Actual cost of project", "estimated cost of project", "Cost Performance Index" and "Cost Schedule Index". Costing needs to be determined carefully as this is one of the crucial aspect of any project.
Combining financial aspect & project costing is not just sufficient. Any project need to give output too. We need to measure the performance index of the project. The performance index of the project is measured by calculating "Return on investment to customer", "Return to company", "Schedule Performance Index" and "Cost Variance".
This tells to which extent the project is successful in giving its output.
Last but not the least, another & the most crucial aspect is customer satisfaction. Customer satisfaction is the wholesome that a company looks for while deciding & delivering any project. Customer is the last end where the company has to deliver the project with its output. This is determined by determining the "Quality of project", "Customer feedback", "Customer satisfaction index", "Customer Perspective". This can be done by conducting surveys, taking feed back from customers, market reviews etc.
All the metrics indicated play an important role in determining the success of any project. These are the crucial aspects of earned value management and they help in monitoring the progress of the project at any point of time during and after the completion of the project. These aspects if monitored carefully can be a boon for the project and streamline the usage of earned value management in any project.