Earned value is a term used in project management to refer to the process of assessing and evaluating the performance and progress of a given project in a purposeful and objective manner. According to Semolic (2009) and Webb (2009), most project managers usually use earned valued due to its ability to combine measurements of scope of a project, schedule of activities and costs incurred during the development and implementation of a project using a single system that is highly incorporated and integrated. Earned value helps in proper management, control and planning during project implementation. In addition, earned value is also preferred to other project management techniques because of its ability to provide accurate forecasts of cost estimates.
According to Fleming and Koppelman (2010), earned value was introduced in project management more than forty years ago to facilitate establishment and determination of the most appropriate techniques of managing projects. Earned value also helped in determining the success of projects at their early stages. I would also assert that earned value management can also be used to track expenses incurred during implementation of projects as well as to communicate the status and progress of projects. Through earned value management, project managers are able to compare the current performance and progress of a project with the projected performance. Through earned value management, a project manager is able to evaluate the performance of the project and take the necessary actions in order to ensure that the project is completed within the stipulated cost and period. As Lock (2007) and Pinto (2010) asserts, earned value management is used to detect variations in the progress of the project thus enable the project manager to take appropriate corrective measures. Earned value management utilizes a combination of various measurements that provides both qualitative and quantitative data for effective decision making during implementation of a project.
I would further assert that earned value management uses trend data to forecast or estimate the future performance of a project. To conclude, I would also assert that earned value is an important management tool that helps project managers to realize the target goals and objectives easily.