Companion to: Return on Investment from Implementing an EVMS, by Paul Bolinger
Quick Summary
- There is no universal ROI percentage for an EVMS. A credible estimate starts with what the company already does well, the avoidable losses it faces, and the cost of closing specific gaps.
- Published research links EVMS maturity with better cost performance: a 2023 study of 35 projects totaling more than $21.8 billion found that high-maturity projects averaged 54% less cost overrun against their baselines than low-maturity ones.
- Paul Bolinger’s full article explains where the financial return comes from, how to calculate a return the company can defend, and how to test the business case on a representative project before committing to a full implementation.
Is an Earned Value Management System (EVMS) worth the investment to implement? Any business weighing an EVMS implementation has to answer that question, and it rarely gets a straight answer. In a new article for the H&A EVMS Education Center, Paul Bolinger builds a business case for disciplined project management. He wrote it for a construction business that routinely delivers large, complex projects, but the same approach works for any business evaluating how to objectively measure the cost benefits from implementing an EVMS.
Paul is careful about what the evidence does and doesn’t show. Research on EVMS maturity, construction scheduling, and project management practice all points the same direction, and the article summarizes findings from GAO, NASA, PMI, the Construction Industry Institute, and others. None of the research establishes a return that can responsibly be promised to an individual contractor. The return depends on what the implementation actually changes. Where estimating, scheduling, and forecasting are already strong, the gain may be modest. Where significant gaps exist, the opportunity may be substantial.
The financial value comes from management action, not from a set of performance metrics. Because an EVMS compares actual cost with the budgeted value of the work accomplished, management can tell efficient performance from delayed work, recognize margin erosion earlier, and change the approach for the remaining work while there are still options. The article includes a matrix of current practices worth examining, the questions that define the business case, and simple formulas for ROI, benefit-to-cost ratio, and break-even, along with cautions against double counting benefits or crediting the EVMS for every favorable outcome.
Read the full article, including the ROI formulas and Paul’s recommended first step, on the EVMS Education Center.