What is the purpose of earned value management (EVM)?

Earned value management (EVM) serves a crucial role in assessing project performance and progress by integrating scope, schedule, and cost metrics. Its primary purpose is to provide project managers with a quantitative measure of project health, facilitating better decision-making and forecasting.

Through EVM, project managers can compare the planned progress and expenditures against the actual performance. Key metrics such as Planned Value (PV), Earned Value (EV), and Actual Cost (AC) allow for evaluating whether a project is on track, ahead, or behind schedule, and whether it is staying within budget. This holistic view enables the identification of variances and trends, aiding in proactive management and corrective actions when necessary.

While creating a budget, determining stakeholder satisfaction, and managing project resources are important aspects of project management, they do not encapsulate the unique function of EVM. Budget creation is forward-looking and typically completed at the start of a project, stakeholder satisfaction is a subjective measure not easily quantified by EVM, and resource management focuses more on the utilization and allocation of resources rather than assessing overall project performance against planned objectives.