Earned Value? Management

[EARNED VALUE MANAGEMENT]
Management Insider
Page 1 of 29
Contents
1. Project Management Methods ........................................................................................................................................................ 2
2. Earned Value Management Definition ............................................................................................................................................ 3
3. Why Use EVM? ................................................................................................................................................................................ 3
4. PERFORMING EVM ANALYSIS .......................................................................................................................................................... 4
4.1. Planned Value (PV) ......................................................................................................................................................4
4.2. Actual Cost (AC) ...........................................................................................................................................................6
4.3. Earned Value (EV) ........................................................................................................................................................8
5. Metrics and Performance Measurements ..................................................................................................................................... 11
6. Variances........................................................................................................................................................................................ 12
6.1. Schedule Variance (SV) ..............................................................................................................................................12
6.2. Cost Variance (CV) .....................................................................................................................................................14
6.3. Variances: Review ......................................................................................................................................................16
7. Performance Indices ...................................................................................................................................................................... 17
7.1. Schedule Performance Index (SPI).............................................................................................................................17
7.2. Cost Performance Index (CPI) ....................................................................................................................................18
8. Review of Variance and Performance Indices ............................................................................................................................... 20
9. Estimate at Completion (EAC)........................................................................................................................................................ 21
10. Budget at Completion (BAC) ...................................................................................................................................................... 24
11. Other Formulas to calculate Estimate at Completion (EAC)...................................................................................................... 25
12. Summery.................................................................................................................................................................................... 27
References .......................................................................................................................................................................29
[EARNED VALUE MANAGEMENT] MANAGEMENT INSIDER
Copyright © Management Insider 2020 Phone +201004974771

Page 2 of 29
1. Project Management Methods

Every project requires a method to control and manage the execution and delivery of
The project. Project managers across the globe have followed different methods of
Monitoring a project.
A traditional approach of project management has been the percentage

complete method, however measuring project performance solely as a
percentage complete has inherent risks.
For example, if a task has a planned duration of ten days with thirty hours of work
duration, after five days it would be deemed fifty percent Complete even though the work
duration put in might be only 10 hours, so to complete the balance work another twenty
hours needs to be put in which may require more than the balance five days since as per the
plan only three hours a day was planned for the task.
As a best practice, several variables need to be considered, work effort

expended, remaining work left to perform, and a re-assessment of remaining
duration, by providing these variables, a more accurate percentage complete
and an assessment of the schedule impact can be derived. One such technique
of project monitoring is The Earned Value Management or the EVM.

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2. Earned Value Management Definition

According to the Project Management Body of Knowledge (PMBOK):
Earned Value Analysis (EVA) is a method that allows the project manager to measure
the amount of work actually performed on a project beyond the basic review of cost
and schedule reports.
Another definition of Earned Value Management by USA Department of Energy:
Earned Value Management (EVM) is a systematic approach to the integration

And measurement of cost, schedule, and technical (scope) accomplishments
On a project or task
3. Why Use EVM?

At this point, you should understand that Earned Value helps determine if your
project is on schedule and within budget. It does this by assessing the project on the
basis of cost and schedule as compared to what has been accomplished.
By using Earned Value and implementing of Earned Value Management (EVM), the
following questions can be answered objectively:
• Where have we been?

• Where are we now?
• Where are we going?

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4. PERFORMING EVM ANALYSIS

In determining current project performance and estimate/forecast future project
performance based on 3 data points:
 Earned Value, which also known as Budgeted Cost of Work Performed (BCWP)
 Actual Cost, which also known as Actual Cost of Work Performed (ACWP)
 Planned Value, which also known as Budgeted Cost of Work Scheduled
(BCWS)
4.1. Planned Value (PV)
– Cost and Schedule baseline refers to the physical work scheduled and the
approved budget to accomplish the scheduled work.
– PV tells you what you plan to do, or how much work should have been done
and how much was it meant to cost?
Simply stated,
Planned Value (PV) = Physical Work Scheduled + Approved Budget
PV, also known as Budget Cost of Work Scheduled (BCWS) and consists of a 5 step
process as follows:
1. Define Scope: What you are tasked to do (Scope Statement)
2. Assign Scope: Breakdown scope into manageable parts (WBS)
3. Schedule Scope: Time-phased, logic driven with critical path (Project Schedule)
4. Budget Scope: develop cost (budget) for all approved scope (Performance Measurement
Baseline)
5. Baseline: Snap-shot in time, frozen. What performance measurement will be based on?

Page 5 of 29
– PV can be looked at in two ways: current and cumulative.
Cumulative
Current PV
is the approved budget for PV
activities scheduled to be is the sum of the approved
performed during a given budget for activities
period. This period could scheduled to be
represent days, weeks, performed to date.
months,etc.
Planned Value (PV) example

Client project and as a part of the scope is for chairs production. The time frame is 4 months
and the budget for this scope is $12,000, resulting in a budget of $3,000 per month.
Client Project - WBS 3.2.1 Chairs Production

$ $ $ $
JAN FEB MAR APR
PV 3000 3000 3000 3000
ACTUAL Planned
Based on these figures, we can calculate the cumulative PV and the current PV.
– The Current PV is the budget for the current month, March, and equals $3,000.
– The Cumulative PV is the total for the elapsed months: January – March. The
cumulative PV is $9,000.

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4.2. Actual Cost (AC)
– Actual Cost (AC), also called actual expenditures, is the cost incurred for
executing work on a project.
– This figure tells you what you have spent, or what was the actual cost of work
actually performed?
– As with Planned Value, AC can be looked at in terms of current and
cumulative.
Cumulative
Current AC is the actual costs of AC
activities performed is the sum of the
during a given period. actual cost for
This period could activities performed to
represent days, weeks, date.
months,etc.
AC is also called Actual Cost of Work Performed (ACWP).

Page 7 of 29
Actual Cost (AC) example

Illustrating again from the Client project example, can you determine the cumulative AC and
current AC? Remember, Cumulative AC is the sum of the actual cost for activities performed
to date, and Current AC is the actual costs of activities performed during a given period.

$ $ $ $
JAN FEB MAR APR
PV 3000 3000 3000 3000
AC 3200 2800 3500
ACTUAL Planned
– The Current AC is the actual cost for the current month, March, and equals $3,500.
– The Cumulative AC is the total for the elapsed months: January – March. The
Cumulative AC is $9,500.

Page 8 of 29
4.3. Earned Value (EV)
– To report the accomplishments of the project, you must apply Earned Value
(EV) to the figures and calculations in the project.
– In other words, EV tells you, in physical terms, what the project has
accomplished.
Simply stated,
EV is the quantification of the “worth” of the work done to date.
– As with PV and AC, EV can be presented in a Current and Cumulative.
Cumulative
Current EV
is the sum of the EV is the sum of the
budget for the budget for the
activities activities
accomplished in a accomplished to
given period. date.
Earned Value is also called Budgeted Cost of Work Performed (BCWP).

Page 9 of 29
Earned Value (EV) example

Through the Client project of chairs production example we have answered several
questions, namely, the cumulative PV and AC, the current PV and AC, and the BAC. Let’s
now determine the cumulative and current EV.

$ $ $ $
JAN FEB MAR APR
PV 3000 3000 3000 3000
AC 3200 2800 3500
EV 1100 2300 1000
ACTUAL Planned
– The Current EV is the sum of the budget for the activities accomplished in the current
month, March, and equals $1,000.
– The Cumulative EV is the sum of the budget for the activities accomplished to date:
January – March. The cumulative EV is therefore $4,400.

Page 10 of 29
In a conclusion of project progress, let’s summarize the findings we have.

$ $ $ $
JAN FEB MAR APR
PV 3000 3000 3000 3000
AC 3200 2800 3500
EV 1100 2300 1000
ACTUAL Planned
Current PV = $3,000 Cum PV = $9,000 BAC = $12,000

Current AC = $3,500 Cum AC = $9,500
Current EV = $1,000 Cum EV = $4,400
Review
At this point, you should have a solid understanding of the three key earned value
components. Let’s review them now.
 Planned Value (PV) is determined by the cost and schedule baseline.

 Actual Cost (AC) is determined by the actual cost incurred on the project.
 Earned Value (EV) tells you, in physical terms, what the project accomplished.

Page 11 of 29
5. Metrics and Performance Measurements

Earned value performance measurements look at the project cost and schedule
performance by analyzing the cost and schedule variance along with cost and
schedule efficiency.
The formulas used are as follows:
Variance • Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV)
Analysis • Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC)
• Schedule Performance Index = Earned Value (EV)/Planned Value

Performance
(PV)
Indices
• Cost Performance Index = Earned Value (EV)/Actual Cost (AC)

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6. Variances
6.1. Schedule Variance (SV)
– SV is the difference between the earned value of work performed and the
work scheduled.
– SV tells you the value of work performed verse the value of work
scheduled
– SV Compares what is done with what was supposed to be done?
Schedule Variance (SV) =BCWP – BCWS = EV – PV
• If the result is POSITIVE, project is on schedule or exceeding

the schedule
• If the result is NEGATIVE, project is behind schedule
Schedule Variance (SV) example

For an ongoing project you received the following data for the current month, let’s calculate
the schedule variance.
Current Status PV EV AC
Piping $25,000 $24,000 $25,500
HVAC Duct $8,500 $8,500 $8,000
Raceways $3,200 $1,500 $2,200
Total $36,700 $34,000 $35,700
SV = EV – PV
SV = $34,000 – $36,700
SV = -$2,700 what does this tell you?
A Schedule Variance of -$2,700 tells you that the project is “Behind” schedule

Page 13 of 29
Another calculation for reviewing Schedule Variance (SV) is SV%
Schedule Variance (SV) % = SV/PV
Tells you what percentage schedule varies from what has been planned to date.
Using our example, what is the SV%?

SV = EV – PV
SV = $34,000 – 36,700
SV = -$2,700
SV% = SV/PV
SV% = -$2,700 / $36,700 = -0.074
SV% = -7.4%
To date the project has a Schedule Variance of -$2,700 or -7.4%

Schedule Variance status does:
• indicate the value difference between work that is ahead or behind the plan
• reflect a given measurement method
Schedule Variance status does not:

• address impact of work sequence
• address importance of work
• reflect critical path assessment
• indicate amount of time it will slip
• identify source (labor & material) of difference
• indicate the time ahead/behind (or regain) schedule
• indicate the cost needed to regain schedule

Page 14 of 29
6.2. Cost Variance (CV)
– CV is the difference between the earned value of work performed and the
actual cost.
– CV Compares actual project cost with budgeted project costs.
Cost Variance (CV) =BCWP – ACWP = EV – AC
• If the result is POSITIVE, project is experiencing an “Underrun”

• If the result is NEGATIVE, project is experiencing an “Overrun"
Cost Variance (CV) example

For the same previous project data, let’s calculate the cost variance.
Piping $25,000 $24,000 $25,500
HVAC Duct $8,500 $8,500 $8,000
Raceways $3,200 $1,500 $2,200
Total $36,700 $34,000 $35,700
CV = EV – AC
SV = $34,000 – $35,700
SV = -$1,700 what does this tell you?
A Cost Variance of -$1,700 tells you that the project is “overrun” or over budget

Page 15 of 29
Another calculation for reviewing Cost Variance (CV) is CV%
Cost Variance (SV) % = CV/EV
Tells you what percentage cost varies from what has been earned to date
Using our example, what is the CV%?

CV = EV – AC
CV = $34,000 – 35,700
CV = -$1,700
CV% = CV/EV
CV% = -$1,700 / $36,700 = -0.046
CV% = -4.6%
To date the project has a Cost Variance of -$1,700 or -4.6%

Page 16 of 29
6.3. Variances: Review
You should have a solid understanding of the cost and schedule variance
calculations and what they mean. Let's review them now
Schedule Cost
Variance Variance
(SV) = EV – PV (CV) = EV – AC
If the result is If the result is

POSITIVE means POSITIVE means
“On Schedule" “Underrun”
If the result is If the result is

NEGATIVE means NEGATIVE means
“Behind Schedule” “Overrun”
Using these variance calculations on our previous project example information as follows:
Current
PV EV AC SV CV
Status
Piping $25,000 $24,000 $25,500 -$1,000 -$1,500
HVAC Duct $8,500 $8,500 $8,000 $0 $500
Raceways $3,200 $1,500 $2,200 -$1,700 -$700
Total $36,700 $34,000 $35,700 -$2,700 -$1,700

Page 17 of 29
7. Performance Indices
7.1. Schedule Performance Index (SPI)
– The Schedule Performance Index (SPI) is a measure of Schedule Efficiency.

– The SPI measures the value of work performed against the work scheduled.
Schedule Performance Index (SPI)=BCWP / BCWS = EV / PV
• If the result greater than 1.0, project is “AHEAD" of schedule.

• If result is less than 1.0, project is “BEHIND” schedule.
Schedule Performance Index (SPI) example

For the same previous project data, let’s calculate the SPI.
Piping $25,000 $24,000 $25,500
HVAC Duct $8,500 $8,500 $8,000
Raceways $3,200 $1,500 $2,200
Total $36,700 $34,000 $35,700
SPI= EV / PV
SPI= $34,000 / $36,700
SPI= 0.93 what does this tell you?
A Schedule Performance Index (SPI) of 0.93 tells you that you are behind schedule. It can be
defined in two ways:
You are 7% behind schedule or you are working at a 93% efficiency

Page 18 of 29
7.2. Cost Performance Index (CPI)
– The Cost Performance Index (CPI) is a measure of Cost Efficiency.

– The CPI measures the value of work performed against the actual cost.
Cost Performance Index (CPI)=BCWP / ACWS = EV / AC
• If the result greater than 1.0, cost is “LESS" than budget.

• If result is less than 1.0, cost is “GREATER” than budget.
Cost Performance Index (CPI) example

For the same previous project data, let’s calculate the CPI.
Piping $25,000 $24,000 $25,500
HVAC Duct $8,500 $8,500 $8,000
Raceways $3,200 $1,500 $2,200
Total $36,700 $34,000 $35,700
CPI= EV / AC
CPI= $34,000 / $35,700
CPI= 0.95 what does this tell you?
A Cost Performance Index (CPI) of 0.95 tells you that your actual costs are greater than what
was budgeted.
You are getting $0.95 worth of work for every $1.00 spent

Page 19 of 29
Using all previous variance calculations on our previous project example information as
follows:
Current
PV EV AC SV CV SPI CPI
Status
Piping $25,000 $24,000 $25,500 -$1,000 -$1,500 0.96 0.94
HVAC Duct $8,500 $8,500 $8,000 $0 $500 1 1.06
Raceways $3,200 $1,500 $2,200 -$1,700 -$700 0.47 0.68
Total $36,700 $34,000 $35,700 -$2,700 -$1,700 0.93 0.95
From previous calculation on mentioned project, we came to a conclusion that, the project
is 7% behind schedule (SPI=0.93), also greater by 0.5% than budget cost (CPI=0.95) which
means the project is overrun its budget and behind schedule.

Page 20 of 29
8. Review of Variance and Performance Indices

So far we have only looked at how to analyze what has happened on a project (CV,
SV, CPI, and SPI).
Schedule Cost
Schedule Variance (SV) = EV – PV Cost Variance (CV) = EV – AC
– If the result is POSITIVE means “On – If the result is POSITIVE means
Schedule” “Underrun”
– If the result is NEGATIVE means – If the result is NEGATIVE means
“Behind Schedule” “Overrun”
Schedule Variance (SV)% = SV/PV Cost Variance (CV)% = CV/EV
Tells you what percentage schedule Tells you what percentage cost varies
varies from what has been planned to from what has been earned to date.
date
Schedule Performance Index (SPI) = Cost Performance Index (CPI) = EV/AC
EV/PV
– If result is less than 1.0, cost is
– If result is less than 1.0, project is GREATER than budgeted
“BEHIND” schedule – If the result greater than 1.0, cost is
– If the result greater than 1.0, LESS than budgeted
project is “AHEAD of schedule

Page 21 of 29
9. Estimate at Completion (EAC)

Now it is time to know how to analyze the future or what is expected to happen on
a project given the progress measurements reported to date, anticipating future
progress requires determining when the project will be completed and how much
it will cost to complete it.
– The Estimate at Completion (EAC) is the actual cost to date plus an objective
estimate of costs for remaining authorized work.
– The objective in preparing an EAC is to provide an accurate projection of cost
at the completion of the project.
EAC = Actual Cost (AC) + Estimate to Complete (ETC)*
“The Estimate to Complete (ETC) is the cost of completing the authorized remaining work”
*There will be more formulas to calculate EAC later in the next pages.

Page 22 of 29
For more understanding, let’s use previous formula on the next project
Actuals ETC EAC
ID Activity Mar Apr May Jun Jul Total
2.1 WBS Electrical
2.1.1 Install Raceways $1,100 $1,100
2.1.2 Pulling Cables $2,300 $2,300
Install Wiring
$1,200 $700 $1,900
2.1.3 Devices
2.1.4 Install Fixtures $2,100 $2,100
2.2 WBS HVAC
2.2.1 Fabricate Duct $1,100 $1,100
2.2.2 Install Duct $400 $400
2.2.3 Smoke/light test $100 $100
2.2.4 Insulation works $200 $600 $800
2.2.5 Cladding Works $500 $500
2.3 WBS Firefighting
2.3.1 Install Pipes $3,100 $3,100
2.3.2 Network HT $500 $500
2.3.3 Install Sprinklers $1,600 $1,600
2.4 WBS Drainage
2.4.1 Install UPVC Pipes $800 $800
2.4.2 filling test $100 $100
2.4.3 Install Specialties $500 $800 $1,300
Total $8,900 $2,500 $2,100 $500 $3,700 $17,700
From project data we can calculate cumulative Actual Cost =$8,900+$2500=$11,400

Now we need to determine the Estimate to Complete (ETC) for all activities. For the
activities that are 100% complete, their actual cost replaces their ETC
For the activities currently being worked, we will assume that they will be completed as
budgeted even though they have current cost variances, it will also be assumed that all
other activities will have no adjustments to their ETC.
By reviewing the above table you can see that our Estimate at Completion (EAC) is $17,700

Page 23 of 29
Now let’s look at the same example with some additional changes to the ETC
“As the project manager you are reviewing your ETC and you get a call from the Cladding
Contractor. He tells you that the original budget for the cladding ($500) is no longer correct
because the price of the cladding increased. The project manager asks for a new estimate
and the cladding contractor tells him that it will now cost $700”
“Additionally, your site engineers tell you that the current ETCs for insulation are good, thus
the current cost underrun ($100) and the cost overrun ($200) for installing wiring devices
that will be realized at the completion of each activity
With this information, let’s take a look at the new EAC.
Actuals ETC EAC
ID Activity Mar Apr May Jun Jul Total
2.1 WBS Electrical
2.1.1 Install Raceways $1,100 $1,100
2.1.2 Pulling Cables $2,300 $2,300
2.1.3 Install Wiring Devices $1,200 $900 $2,100
2.1.4 Install Fixtures $2,100 $2,100
2.2 WBS HVAC
2.2.1 Fabricate Duct $1,100 $1,100
2.2.2 Install Duct $400 $400
2.2.3 Smoke/light test $100 $100
2.2.4 Insulation works $200 $500 $700
2.2.5 Cladding Works $700 $700
2.3 WBS Firefighting
2.3.1 Install Pipes $3,100 $3,100
2.3.2 Network HT $500 $500
2.3.3 Install Sprinklers $1,600 $1,600
2.4 WBS Drainage
2.4.1 Install UPVC Pipes $800 $800
2.4.2 filling test $100 $100
2.4.3 Install Specialties $500 $800 $1,300
Total $8,900 $2,500 $2,200 $700 $3,700 $18,000

Page 24 of 29
The Actual Cost = $8,900 + $2,500 = $11,400

The new ETC= $2,200 + $700 + 3,700 = $6,600
The new EAC= $11,400 + $6,600 = $18,000
10. Budget at Completion (BAC)

To complete our analysis, we will look at the Budget at Completion (BAC)
– The Budget at Completion (BAC) is the sum of all budgets allocated to a
project scope.
– The Project BAC must always equal the Project Total PV. If they are not equal,
your earned value calculations and analysis will be inaccurate.
Now that we have the EAC and BAC, what do they tell us?
As mentioned earlier, EAC is the best estimate of the total cost at the
completion of the project. It is also used to determine the Variance at
Completion (VAC) for the project. The VAC is calculated as follows:
VAC = BAC – EAC
• If the result is POSITIVE, project is projecting an “Underrun”

• If the result is NEGATIVE, project is projecting an “Overrun”
Now let's determine the VAC for our previous project as follows:
VAC = BAC – EAC
VAC = $17,700 - $18,000 = -$300
In other words, the project is now forecasted to overrun by $300.

Page 25 of 29
11. Other Formulas to calculate Estimate at Completion (EAC)

Back to our first formula:
EAC = Actual Cost (AC) + Estimate to Complete (ETC)
This formula is used when the original estimation is fundamentally flawed. It

calculates the actual plus new estimate for the remaining work.
The second EAC formula is as follows
EAC = Budget at Completion (BAC) / Cost Performance Index (CPI)
This formula is used when the original estimation is met without any deviation. It
signifies that your project is going well.
You are maintaining the CPI and SPI as 1, and you should continue the project in
the same way. It is always good for a project manager if he or she is maintaining
the CPI and SPI as 1 or even more than 1.

Page 26 of 29
The Third EAC formula is as follows
EAC = AC + (BAC - EV)
This formula is used when the current deviation with the original estimation is
thought to be different in the future.
It is generally AC plus the remaining value of the work to perform.
The Fourth EAC formula is as follows
EAC = AC + [(BAC - EV) / ( CPI x SPI)]
This formula is used to calculate actual to date plus the remaining budget changed
based on the performance.
It is used when we believe the current ratio is typical as planned. In other words,
we have to meet the schedule earlier than originally determined, and we calculate
the EAC accordingly to meet that schedule.

Page 27 of 29
12. Summery
Schedule Variance
Earned Value (EV) - Planned Value (PV)
(SV)
Cost Variance (CV) Earned Value (EV) - Actual Cost (AC)
Schedule
Performance Index Earned Value (EV) / Planned Value (PV)
(SPI)
Cost Performance
Earned Value (EV) / Actual Cost (AC)
Index (CPI)
Estimate to
Estimate at completion (EAC) - Actual Cost (AC)
Complete (ETC)
Earned Value
Mgmnt (EVM) AC + ETC
BAC / CPI
Estimate at
Completion (EAC)
AC + (BAC - EV)
AC + [(BAC - EV) / ( CPI x SPI)]
Variance at Budget at Completion (BAC) - Estimate at

Completion (VAC) Completion (EAC)

Page 28 of 29
As a final conclusion after all, you have the ability now to relate all of the following
questions and also the ability to answer them back.
Question Objectively Calculation
How much work should be done? Planned Value (PV)
How much work was done? Earned Value (EV)
How much did the work cost? Actual Cost (AC)
What is the total job budgeted to cost? Budget at Completion (BAC)
What do we expect the total job to cost? Estimate at Completion (EAC)
In summery an earned value management system is an aid the project

management team and the benefits of implementing an EVMS can be
summarized as follows:
 Improves the planning process;
 Fosters a clear definition of the work scope.
 Establishes clear responsibility for work effort.
 Integrates technical, schedule, and cost performance.
 Provides early warning and analysis of potential Earned Value problems.
 Identifies problem areas for immediate and proactive management
attention.
 Enables more accurate reporting of cost and schedule impacts of known
problems.
 Enhances the ability to assess and integrate technical, schedule, cost,
systems analysis, and risk factors.
 Provides consistent and clear communication of progress at all
management levels.
 Improves project visibility and accountability.

Page 29 of 29
References
Project Management Institute. (2004) A Guide to the Project Management Body of Knowledge
(PMBOK® Guide). (Third ed.) Newtown Square, PA: Project Management Institute
Project Management Institute. (2005) Practice standard for earned value management (PMI
Global Standard) (2005 ed.) Newtown Square, PA: Project Management Institute
Government Electronics and Information Association. (2002) Earned value management
systems Approved: May 19, 1998. Reaffirmed: August 28, 2002. ANSI/EIA-748-A-1998
United States Department of Energy (2005) Earned value management application guide,
version 1.6. January 1, 2005. Office of Engineering and Construction Management.
© 2006, Chance Reichel, PMP
originally published as a part of 2006 PMI Global Congress Proceedings – Seattle
Washington
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1. Project Management Methods

A traditional approach of project management has been the percentage

As a best practice, several variables need to be considered, work effort

[EARNED VALUE MANAGEMENT] MANAGEMENT INSIDER

Copyright © Management Insider 2020 Phone +201004974771

2. Earned Value Management Definition

Another definition of Earned Value Management by USA Department of Energy:

Earned Value Management (EVM) is a systematic approach to the integration

3. Why Use EVM?

• Where have we been?

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4. PERFORMING EVM ANALYSIS

4.1. Planned Value (PV)

Planned Value (PV) = Physical Work Scheduled + Approved Budget

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– PV can be looked at in two ways: current and cumulative.

Planned Value (PV) example

Client Project - WBS 3.2.1 Chairs Production

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4.2. Actual Cost (AC)

AC is also called Actual Cost of Work Performed (ACWP).

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Actual Cost (AC) example

Client Project - WBS 3.2.1 Chairs Production

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4.3. Earned Value (EV)

EV is the quantification of the “worth” of the work done to date.

– As with PV and AC, EV can be presented in a Current and Cumulative.

Earned Value is also called Budgeted Cost of Work Performed (BCWP).

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Earned Value (EV) example

Client Project - WBS 3.2.1 Chairs Production

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In a conclusion of project progress, let’s summarize the findings we have.

Client Project - WBS 3.2.1 Chairs Production

Current PV = $3,000 Cum PV = $9,000 BAC = $12,000

 Planned Value (PV) is determined by the cost and schedule baseline.

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5. Metrics and Performance Measurements

• Schedule Performance Index = Earned Value (EV)/Planned Value

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6.1. Schedule Variance (SV)

Schedule Variance (SV) =BCWP – BCWS = EV – PV

• If the result is POSITIVE, project is on schedule or exceeding

Schedule Variance (SV) example

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Another calculation for reviewing Schedule Variance (SV) is SV%

Schedule Variance (SV) % = SV/PV

Using our example, what is the SV%?

To date the project has a Schedule Variance of -$2,700 or -7.4%

Schedule Variance status does not: