The term Earned Value is often used to describe both a management system and a data item produced from that system, the budget value for completed work (See Budgeted Cost for Work Performed — BCWP).
An Earned Value Management System (EVMS) is designed to provide valid, timely, and auditable project cost and schedule status information to both company management and its customer that requires system compliance with the 32 EVMS guidelines in the EIA-748-D Standard for Earned Value Management Systems and the latest revision to the appropriate department or agency EVMS guidance documents.
EVMS is an integrated management control system comprised of major subsystems and processes, which include:
- Work Organization
- Planning and Scheduling
- Work Authorization and Budgeting
- Indirect Cost Management
- Management Analysis and Reporting
- Change Management
- Material Management
- Subcontract Management
- Risk Management
- System Surveillance
Effective project management demands a management control system that is both sensitive and responsive to day-to-day project progress. Further, the availability of reliable cost and schedule projections for individual contracts, as well as segments of those contracts, are required for successful project management and control. EV is based upon planning and performance data generated at the working level. Data summarized from this level are used by upper management for decision making, projecting final costs and future funding requirements, and for reporting contract cost/schedule performance measurement data to the customer.