Earned Value Management compares actual performance to planned performances; however, it does have limitations. Determine in advance how you plan to use this tool to advance your project and relay information so you are not wasting essential time over analyzing the chart.
Is Your Plan Correct?
Earned Value Management was never intended as a stand-alone tool. Instead, it should be used with other schedules and reports to discern where your budget and project time line stands. In addition, if your initial plan is flawed, your tracking will never match your plan. This becomes burdensome because you will not only need to adjust your planned project, you will need to adjust your actual plan.
How Do You Convey The Information?
Earned Value Management (EVM) is beyond most stakeholders. Both the terminology and the formulas are unfamiliar unless you are using the application daily. So conveying the information to your team members and stakeholders must be straightforward. You can do this by using charts and not detailing the formulas you used to get the results. Showing the detail that was used to reach the comparison EVM provides will most likely cloud the report.
Different Opinions & Quality Control
If your team is trained in Earned Value Management, debates can arise on the best mathematical formulas to use in the project tracking process as well as differing views on what to track. Some formulas include the budget and completion, others include the cost variance or even the estimate at completion. These are only a few of the many efforts EVM can be used to track.
Earned Value Management shouldn't be used on continuous efforts. It works best on smaller, simple projects. Getting into technical projects or projects with many tiers can cause the project manager to allow the project to become derailed in the details.
EVM does not tell the whole story on evaluating your project and might not accurately represent what is necessary for a project to achieve specific functionality. But, perhaps most importantly, EVM only covers cost and schedules and, therefore, no quality control is factored into EVM. Without the right vision and guidance, your project can be on time and on budget--and still be the worst product ever made.