Controlling the Project Cost with EVA

Any project manager will meet the project cost objective if money spent at the project completion is on budget or under budget. Project budget is usually approved when the project is authorized, and should be a major project restriction. Sometimes project budget is changed when a project rebaseline is motivated.

EVA analysis shows cumulative variances up to date and forecast values at project completion. This information allows the steering committee to take decisions and propose corrective or preventive actions. Measure and adjust regularly is key to control project costs.

See bellow an example of EVA analysis charts:

Data PV=€469K, AC=€348K and EV=€250K, shows cost performance to date is not acceptable:

Root analysis found out that client was asking for more requirements without accepting deliverables. Following the escalating process, a meeting was called to extend scope, schedule and cost.

Budget at Completion –BAC– was increased from €750K to €800K. Cost baseline was changed:

Finally, this was the EVA analysis at project closure:

The project finished with an over cost of €55K, very high for sure, but not so high as estimated in the previous report of €294K. In fact, charts show the improvement after rebaseline.

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