Earned Value Management (EVM) Guide from PMBOK 7th Edition

Earned Value Management is a critical concept in the Project Management Professional (PMP) certification exam. EVM helps measure project performance and progress. Following are some key points:

Importance: EVM allows project managers to track the true cost of the project against the plan. It gives an accurate picture of the project's health, alerting managers when costs are not aligning with the work accomplished. This can pinpoint issues early and provide time for corrective action.

Concept: EVM combines schedule performance and cost performance to answer the question, 'What did we get for the money spent?' It results in metrics, namely Schedule Variance, Cost Variance, Schedule Performance Index, and Cost Performance Index, which help in forecasting, variance analysis and control. The three components of EVM are Planned Value (PV), Actual Cost (AC), and Earned Value (EV).

Workings: Calculate EV as the percentage of the total budget assigned to a task multiplied by the percentage of the work completed. The variance analysis then uncovers project performance and the conformance to the initial projections.

Exam Tips: Understand the formulas (like SPI=EV/PV, CPI=EV/AC etc.) and their implications. Do not memorize them, grasp their essence. Be comfortable with using some basic math for computations. Expect scenario-based questions where you need to compute variances or indexes.

Remember: The greater the variance, the greater the risk. Practice a lot of mock test questions based on this concept and learn to apply EVM on a case-to-case basis.