Interfacing Earned Value And Risk Management

Sound risk management processes and robust earned value management application each offer the opportunity to improve project control and provide the project manager with reliable information on which to base proactive management decisions. All too often, the disciplines are practiced in isolation with focus on the mechanisms rather than the management value. They can compete with each other for resource and project management attention, rather than leveraging the advantages each has to offer. Instead, it should be recognized that they complement each other and deliver more holistic project management. This paper explains how risk and earned value approaches work together during different phases of a project life cycle, starting with setting the baseline, then change control as the project progresses, finally looking at how to improve "estimates to complete." This paper goes through the steps required to implement risk and earned value side by side, to take advantage of these benefits, improve project control, and increase the chances of project success. It begins by establishing the baseline. In addition, it details how to allow for risk in the baseline. The paper then overviews change management. It demonstrates how to combine the two disciplines of risk management and earned value management, support better decision-making, encourage effective communication, and increase your chances of delivering a successful project. It identifies the benefits of bringing the two disciplines together.