Rethinking Value in Project Monitoring and Control
ADVISORY ARTICLE
By Alexander Apostolov, PhD
Sofia, Bulgaria
Introduction
The project management community widely accepts that all projects are investments, which exist to generate value. Therefore, project performance, progress monitoring, and control should be based on created and expected value. This presents a challenge, as well-known methods like Earned Value Management do not measure the actual value of the work performed or the project outputs created.
This article introduces Earned Profit Management (EPM), a practical method developed through my personal experience in researching and applying approaches for measuring project value.
EPM views the project as an investment that should generate either financial or non-financial profit for the investor. The method can also be applied from the perspective of any other stakeholder.
EPM is built around three key metrics, which can be calculated at any given point in time:
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- Genuine Earned Value (GEV)
- Net Earned Value (NEV)
- Earned Profit (EP)
Genuine Earned Value
The value of the work performed on a project can be measured through the value of its result—that is, the value of the project outputs. Measuring the value of completed or partially completed project outputs means calculating “earned value.” However, this cannot be achieved using the budgeted cost of work performed, as this approach assumes that value is always directly proportional to and based solely on the incurred costs. Instead, we need a different approach—one that assesses earned value through… value itself.
The ability of a project output to generate value-added or cost reduction benefits determines its value. For clarity, we will refer to this benefits-driven, value-based earned value as “Genuine Earned Value.”
Genuine Earned Value can be calculated using three main approaches:
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How to cite this article: Apostolov, A. (2025). Earned Profit Management: Rethinking Value in Project Monitoring and Control, PM World Journal, Vol. XIV, Issue V, May. Available online at https://pmworldlibrary.net/wp-content/uploads/2025/05/pmwj152-May2025-Apolstolov-Earned-Profit-Management-advisory.pdf
About the Author
Alexander Apostolov
Sofia, Bulgaria
Alexander Apostolov holds a Master’s degree in Economics and a PhD in Project Management and Sustainable Development. He has 25 years of experience in project management for new product development, construction, IT, events, and more.
He is currently the managing director of a project management consulting firm and the Lean Project Management Foundation. His interests lie in the development and implementation of holistic project management methods and tools.
Alexander Apostolov can be reached at contact@leanpm.org and www.leanpm.org.
