EARNED VALUE MANAGEMENT

1. EARNED VALUE
MANAGEMENT
HOW’S PROJECT GOING

2. EARNED VALUE MANAGEMENT
PRESENTED BY :
CHANDRA
SITANSHU JHA
UNDER THE
GUIDANCE OF:
DR. PRAVIR
KUMAR SIR
DEPARTMENT OF PEM , JUT

3. EVM
• PROJECT MANAGEMENT METHOD
SCHEDULE
COST
SCOPE

4. EVM:
• CORE CONCEPTS & METRICS
• PLANNED VALUE (PV): BUDGETED COST FOR WORK SCHEDULED TO
BE DONE. {“SHOULD DONE”}
• EARNED VALUE (EV): BUDGETED COST FOR
WORK ACTUALLY COMPLETED (THE "EARNED" VALUE).{IS DONE}
• WORKACTUAL COST (AC): REAL MONEY SPENT TO COMPLETE THE .

5. EVM:
• KEY PERFORMANCE INDICATORS (KPIS)
• COST VARIANCE (CV): EV - AC (NEGATIVE MEANS OVER BUDGET).
• SCHEDULE VARIANCE (SV): EV - PV (NEGATIVE MEANS BEHIND SCHEDULE).
• COST PERFORMANCE INDEX (CPI): EV / AC (BELOW 1 MEANS
OVERSPENDING).
• SCHEDULE PERFORMANCE INDEX (SPI): EV / PV (BELOW 1 MEANS BEHIND
SCHEDULE).

6. EVM:
•

7. EVM:
• BAC = TOTAL BUDGET COST FOR THE BUDGET
• PV = PLANNED % COMPLETE X BAC
• EV= ACTUAL% X BAC
• AC = SUM OF THE COST FOR THE GIVEN PERIOD
• EAC = BAC/CPI
• ETC=EAC- AC
• VAC=BAC-EAC
• TCPI=(BAC-EV)/(BAC-AC) FOR REMAINING FUNDS

8. EVM
FORMULAS:
Planned Value
(PV)
PV = Planned %
Complete x BAC
The authorized
budget assigned
to scheduled
work up to a
specific point in
time. Also known
as Budgeted Cost
for Work
Scheduled
(BCWS).
Earned Value
(EV)
EV = Actual %
Complete x BAC
The value of work
completed to
date, expressed
in terms of the
approved budget.
Also known as
Budgeted Cost
for Work
Performed
(BCWP).
Actual Cost (AC)
AC = Sum of
Costs Incurred
The actual cost
incurred for the
work completed.
Also known as
Actual Cost of
Work Performed
(ACWP).
Cost Variance
(CV)
CV = EV - AC
The amount of
budget deficit
or surplus at a
given point in
time. Indicates
cost
performance.
Schedule
Variance (SV)
SV = EV - PV
The amount of
schedule deficit
or surplus at a
given point in
time. Indicates
schedule
performance.

9. EVM
FORMULAS:
•
Cost Performance
Index (CPI)
CPI = EV / AC
A measure of cost
efficiency on a
project.
•CPI >
1 indicates better
than expected cost
performance,
•CPI <
1 indicates worse
than expected cost
performance, and
•CPI =
1 indicates performan
ce is as planned.
Schedule
Performance
Index (SPI)
SPI = EV / PV
A measure of
schedule
efficiency on a
project.
•SPI >
1 indicates wo
rk is ahead of
schedule,
•SPI <
1 indicates wo
rk is behind
schedule, and
•SPI =
1 indicates wo
rk is on
schedule.

10. EVM
FORMULAS:
Estimate at
Completion (EAC)
EAC = BAC / CPI or
EAC = AC + (BAC -
EV)
The expected total
cost of completing
all work.
•EAC = BAC / CPI:
Used when future
cost performance
is expected to
follow past
performance.
•EAC = AC + (BAC -
EV): Used when
current variances
are considered
atypical and not
expected to
continue.
Estimate to
Complete (ETC)
ETC = EAC - AC
The expected cost to
finish all remaining
work.
Variance at
Completion
(VAC)
VAC = BAC - EAC
The difference
between the
Budget at
Completion (BAC)
and the Estimate
at Completion
(EAC).
To-Complete
Performance Index
(TCPI)
TCPI = (BAC - EV) / (BAC
- AC) or TCPI = (BAC -
EV) / (EAC - AC)
The cost
efficiency required to
complete the project
within a given budget
or estimate.
•TCPI < 1 indicates the
remaining work can be
performed at a lower
cost than planned,
while
•TCPI > 1 indicates it
will require higher cost
efficiency than
planned.

11. EVM:
• HOW IT WORKS:
• ESTABLISH BASELINES: DEFINE SCOPE, SCHEDULE, AND BUDGET (THE PERFORMANCE
MEASUREMENT BASELINE).
• TRACK PROGRESS: MEASURE ACTUAL WORK COMPLETED (EV) AND ACTUAL COSTS (AC).
• CALCULATE VARIANCES: USE FORMULAS TO FIND DEVIATIONS IN COST (CV) AND
SCHEDULE (SV) FROM THE PLAN.
• FORECAST: PREDICT FUTURE PERFORMANCE (E.G., ESTIMATE AT COMPLETION) TO
IDENTIFY POTENTIAL ISSUES.

12. EVM:
• BENEFITS:
• EARLY WARNING SYSTEM: DETECTS PROBLEMS (COST OVERRUNS, SCHEDULE
SLIPS) BEFORE THEY BECOME CRITICAL.
• OBJECTIVE MEASUREMENT: REPLACES SUBJECTIVE STATUS REPORTS WITH DATA-
DRIVEN ANALYSIS.
• INTEGRATED VIEW: COMBINES SCOPE, TIME, AND COST INTO ONE SYSTEM.
• BETTER DECISIONS: EMPOWERS MANAGERS TO TAKE CORRECTIVE ACTION EARLY.

13. EVM:
• EARNED VALUE MANAGEMENT PROCESS :
• ISO 21508 PROVIDES GUIDANCE FOR PRACTICES OF EVM IN PROJECT AND PROGRAM
MANAGEMENT. IT IS APPLICABLE TO ANY TYPE OF ORGANIZATION INCLUDING PUBLIC OR
PRIVATE AND ANY SIZE OR SECTOR. IT ALSO APPLIES TO ANY TYPE OF PROJECT OR PROGRAM
IN TERMS OF COMPLEXITY, SIZE OR DURATION. THE MAIN PROCESSES ARE THE FOLLOWING:
• PROJECT PLANNING PROCESSES (PLAN THE WORK) WITH THE PMB AS THE FINAL DELIVERABLE.
• PROCESSES OF EXECUTION OF THE PLAN (WORK THE PLAN) THAT GENERATE THE REPORTS AND
SUPPORT DECISION MAKING.

14. EVM:
• 5 FUNDAMENTALS OF EARNED VALUE MANAGEMENT:
• 1. ORGANIZATION AND SCOPE OF PROJECT
• 2. PLANNING, SCHEDULING, AND BUDGETING
• 3. ACCOUNTING FOR ACTUAL COSTS
• 4. ANALYZING AND REPORTING ON PROJECT PERFORMANCE
• 5. REVISIONS AND DATA MAINTENANCE

15. EVM:
THANK YOU