A big part of earning a living as a project manager is being able to tell how well your project is doing at any given time. This means having accurate reports on every aspect of the project in order to have answers to the big questions: Is it gonna be on time? and Is it gonna be on budget? Earned value management report tells you exactly how far along is your project, and is it progressing at a satisfying rate. Here’s how to do EVM in 2020.
The basics of EVM
When a project is initiated, it’s presumed that you have the scope, time and budget defined. To monitor if everything is on track, the principles of earned value management defined specific metrics.
The basic principle of earned value management (EVM) is that the value of the piece of work is equal to the amount of funds budgeted to complete it.
- Planned value (PV): This is the approved budget for the work scheduled to be completed by a set date.
- Earned value (EV): This is the approved budget for the work actually completed by the specified date.
- Actual costs (AC): The costs actually incurred for the work completed by the specified date.
To describe your project’s schedule and cost performance with EVM, you use the following indicators:
- Schedule variance (SV): This is a measure of the difference between the work that was actually done against the amount of work that was planned to be done. This clearly shows is the project is on schedule or not.
- Cost variance (CV): This is the measure of the difference between the amount that was budgeted for the work meant to be done and the amount that was actually spent for the work performed. Thus this shows if the project is on budget or not.
- Schedule performance index (SPI): This is the ratio between the budget that is approved for the work that is performed to the budget that is approved for the work that was planned in the first place. This is a relative measure of the project’s time efficiency.
- Cost performance index (CPI): This is the ratio between the approved budgets for the work that is performed to the budget that was actually spent for the stipulated work. It is a relative measure of the cost efficiency of the project and can be used to estimate the cost of the remainder of the task.
EVM applied to an actual software project
Jira as a project management tool has become quite a standard when managing software projects. There are a lot of Jira plugins that can make Project Budget Management easier and there are a few that actually automate Earned Value Management. Of course, some of them are free, some paid, and based on your company financials, you’ll eventually find the right match for your organization.
But, every organization is specific, and since we’re way past the “one size fits all” faze of product development in IT, after a long time of searching and trying out different plugins, we decided to put our heads together and make a project management solution on our own.
When we start a new scrum project in Jira, the first thing we do is set up tracking of expenses in our project budget management tool. With these kinds of Jira plugins, the great thing is that you don’t have to leave Jira’s interface to get all your info in one place.
Then, after a few expense logs, we enter the realm of EVM.
Horreum EVM plugin for Jira is an extension of the PBM plugin. Once the prerequisites are fulfilled, and the data for the report keeps rolling in from Jira, you can kiss your sheets goodbye and start making EVM reports 2020 style!
Automating EVM reports in 2020.
Click on the green “Get EVM analysis” button.
Wait for it a few seconds…
I want it, where can I get Horreum Earned Value Management plugin
If you want to:
- Escape from a lifetime of data entry
- Stop connecting one formula to another from one sheet to another
- Put an end to losing time you could spend doing anything but work
- Impress your PMO with an up to date perspective on ongoing projects
Go to Atlassian Marketplace, type in “earned value management”, click the Horreum EVM plugin and start the installation.
But what it will save you are things you can’t put a price tag on.