You are on page 1of 2

Earned Value Management (EVM)

Efficiency Notes – Project Controls Series 1


What It Is Why You Need It
A project management technique that EVM is the industry standard method of
measures project performance and progress tracking project progress on capital
by combining scope, schedule and costs into a projects. It improves communication, reduces
single integrated system of monitoring and project risk, provides better forecasting, better
reporting. progress tracking and better project visibility.

What You Need


1. A Project Plan 4. Method to track work execution on Activities
(schedule, scope, costs) Actual % Complete Actual Costs
Actual Hours Spent Actual Start / Finish
2. What you plan to spend and what you
expect to have done for the $$$ spent 5. Formulas to calculate EV, CV and SV
X Activities Done by Y Date will cost $MM See back of page
3. Metrics to quantify work % complete 6. Reports on $ Expenditure vs. Time
X Activities of equal effort or weighted Planned, Actual, Earned, Variances

Reading an S-Curve Report

Data Date
When is this project data as of?

Planned Value > Earned Value


We are behind schedule

Actual Cost > Earned Value


We are over budget

VAC = BAC – EAC (Negative Value)


How far over budget do we
expect to be?

Estimated Complete Date vs.


Planned Complete Date
When do we expect to finish?

Get smart forms, reports and processes on your tablet.


www.industrialaudit.com/efficiency-notes
Earned Value Management (EVM)
Efficiency Notes – Project Controls Series 1
Primary Data Points and Calculations
Budget At Completion
BAC BAC = Total Planned Cost
What you plan to spend for 100% complete
Planned Value
PV PV = BAC x (% Completed Planned)
What you plan to spend on what you plan to be completed
Actual Cost
AC AC = SUM(Cost)
Actual cost of work performed
Earned Value
EV EV = BAC x (% Complete Actual)
What you planned to spend on what’s actually done

Variances and Calculations


Cost Variance CV = EV – AC
CV
How far over or under budget am I? (-) = over (+) = under
Cost Variance % CV% = (CV) / (EV)
CV%
How far over or under budget expressed as a % (-%) = over (+%) = under
Schedule Variance SV = EV – PV
SV
How far ahead or behind schedule am I? (-) = behind (+) = ahead
Schedule Variance % SV% = (SV) / (PV)
SV%
How far ahead or behind schedule expressed as a % (-%) = behind (+%) = ahead
Variance At Completion
VAC VAC = BAC – EAC
Variance of total actual cost and expected cost

Performance Indices
CPI = (EV) / (AC)
Cost Performance Index
> 1 typically good (cost < plan)
CPI Ratio of planned spend on what’s actually done to what’s
< 1 bad (cost > plan)
actually spent for the work delivered by reporting date
= 1 good (cost = plan)
SPI = (EV) / (PV)
Schedule Performance Index
> 1 typically good (ahead vs. plan)
SPI Ratio of planned spend on what’s actually done to planned
< 1 bad (behind vs. plan)
spend on what you planned to have done by reporting date
= 1 good (on plan)

Forecasts
Estimate At Completion EAC = AC + ((BAC – EV) / CPI)) (typical)
EAC Expected TOTAL cost for 100% complete]
Atypical - assumes similar variances seen will not occur in future EAC = AC + (BAC – EV) (atypical)

Estimate to Complete
ETC ETC = EAC - AC
Expected cost to finish REMAINING work

Get smart forms, reports and processes on your tablet.


www.industrialaudit.com/efficiency-notes

You might also like