What is earned value management and why is it important?

Earned value management, or EVM, is a project performance measurement technique that integrates scope, schedule, and cost data to assess project health objectively. It compares three key values: Planned Value, or PV, which is the budgeted cost of work scheduled; Earned Value, or EV, which is the budgeted cost of work actually completed; and Actual Cost, or AC, which is the real cost incurred for work completed.