1.
© PMIS Consulting Limited: all rights reserved
• Objective of this presentation:
– to provide a 10 minute
walkthrough of EVM, giving a
basic understanding of the
concept and its three core
data items:
• Planned spend
• Actual Costs
• Earned Value
– which is easy to follow and
understand 
• It is not designed to give you
in-depth guidance on:
– EV analysis
– Development of the EV baseline
– The vast array of ways that you
can use to calculate EV itself
(many of which we would
recommend to avoid anyway)
Earned Value Worked (EVM) Example
pmis-consulting.com

2.
© PMIS Consulting Limited: all rights reserved
• Before we begin - a
word on EV Methods:
– We do so using one of
many possible
methods of calculating
EV that we prefer –
we prefer to keep
away from subjective
methods, as history
proves they provide
unreliable results.
Earned Value Worked (EVM) Example
Planned Spend
(£/$)
Actual Cost of
work done to
date
What is this saying?
Expenditure variance?
Time
£/$
40 K
15 K
25 K
20 K
pmis-consulting.com

3.
© PMIS Consulting Limited: all rights reserved
• So, on its own, what
is the chart here
showing us?
– Not much really, all it
is showing us is
planned-v-actual
spend.
– Some might think
this is useful, but in
fact it can be
misleading or even
worse, as we will
see later, when EV
is added.
Earned Value Worked (EVM) Example
Planned Spend
(£/$)
Actual Cost of
work done to
date
What is this saying?
Expenditure variance?
Time
£/$
40 K
15 K
25 K
20 K
pmis-consulting.com

4.
© PMIS Consulting Limited: all rights reserved
• So, how is the data
shown here developed?
– The ‘planned spend’,
(aka ‘EVM Baseline’) is
the way you expect to
spend all resources
(inc. purchases), over
whole life of the project,
expressed as a
cumulative (£/$) value.
– The green is actual
spend (cost) to date
Earned Value Worked (EVM) Example
Planned Spend
(£/$)
Actual Cost of
work done to
date
How do we develop these?
Time
£/$
40 K
15 K
25 K
20 K
pmis-consulting.com

5.
© PMIS Consulting Limited: all rights reserved
• Now we have to
calculate and apply EV
(Earned Value), itself.
– At its most simple, EV
is the budget value of
work performed to
date.
– In other words, if the
budget for a task
=100, and it is
complete, this
contributes 100
towards the EV
calculation.
Earned Value Worked (EVM) Example
Planned Spend
(£/$)
Actual Cost of
work done to
date
What do we need now?
Time
£/$
40 K
15 K
25 K
20 K
pmis-consulting.com

6.
© PMIS Consulting Limited: all rights reserved
• So, if we added up
the budgets of all the
tasks that are 100%
complete at this time,
we have calculated
EV (excluding
purchases)
• And we might find
this !!!
• And you say aha,
what about work in
progress? There are
ways of dealing with
this 
Earned Value Worked (EVM) Example
Planned Spend
(£/$)
Actual Cost of
work done to
date
What do we need now?
Time
£/$
40 K
15 K
25 K
20 K
Earned Value
pmis-consulting.com

7.
© PMIS Consulting Limited: all rights reserved
• If we need to, we could
calculate the planned
spend in exactly the
same way we will earn
EV
– We could also apply
actual costs for only
completed tasks,
subject to the agility of
our business systems
– Giving us a ‘perfect’
EV system – sadly far
too many are
fundamentally flawed
Earned Value Worked (EVM) Example
Planned Spend
(£/$)
Actual Cost of
work done to
date
What do we need now?
Time
£/$
40 K
15 K
25 K
20 K
Earned Value
pmis-consulting.com

8.
© PMIS Consulting Limited: all rights reserved
• We can now see two
things:
– We are very much
behind schedule, EV is
less than half of
Planned spend, and
– We are very much over
budget, very roughly by
a factor of 90%, actual
cost is far in excess of
budget.
• So, what do we use this
for?
– being totally serious,
making sure we never
reach this situation
Earned Value Worked (EVM) Example
Planned Spend
(£/$)
Actual Cost of
work done to
date
What is this now showing us?
Time
£/$
40 K
15 K
25 K
20 K
Earned Value
pmis-consulting.com

9.
© PMIS Consulting Limited: all rights reserved
• Please feel free to
share this
presentation or embed
this presentation in
your website and
respect our Copyright
at all times.
• Thank you !
• Please click on the
link below to check
out our website for
more information on
this topic.
Thank you
Planned Spend
(£/$)
Actual Cost of
work done to
date
What is this showing?
Time
£/$
40 K
15 K
25 K
20 K
Earned Value
http://pmis-consulting.com/articles/earned-value-management/