Earned Value Management (EVM) is a project management technique that uses several key formulas to assess a project's performance regarding budget and schedule. Key concepts include Budget at Completion (BAC), Actual Cost (AC), Planned Value (PV), Earned Value (EV), Cost Variance (CV), Cost Performance Index (CPI), Schedule Variance (SV), and Schedule Performance Index (SPI), which provide insights into how well the project is performing relative to its objectives. Various calculations help in determining the project’s financial and scheduling health, offering estimates for completion and indicating whether the project is ahead or behind its goals.

1. Earned Value
Management

2. What is Earned
Value
Management?
Earned Value Management (EVM) is comprised
of several formulas that provide an analysis of a
project and its current state regarding budget
and schedule.

3. EARNED VALUE
MANAGEMENT:
DEFINITION OF VALUES

4. Budget At
Completion
(BAC)
The Planned
Expected Costs to
Complete the Project

5. Actual Cost
(AC)
The actual amount of
money spent at a
given point

6. Planned
Value (PV)
The value of the work that should have
been completed at any given point for the
total project to remain on budget and
schedule
PV =
(Planned Percentage Completed)
Multiplied by the Budget At Completion
(BAC)

7. Planned
Value (PV):
Example
•Budget At Completion: $20,000
•Planned Schedule Duration: 100 Days
•Current Day in the Project: 15 Days
•Actual Work Completed: 12%
•Actual Costs (AC): $3,000
•Planned Percent Completed: 15 Days / 100 Days = 0.15 = 15%
15% X $20,000 = $3,000
Planned Value = $3,000

8. Earned
Value (EV)
The estimated value of the work
completed at any given point
EV = (Actual Percentage
Completed) X BAC

9. Earned Value
(EV):
Example
•Budget At Completion: $20,000
•Planned Schedule Duration: 100 Days
•Current Day in the Project: 15 Days
•Actual Work Completed: 12%
•Actual Costs (AC): $3,000
•Planned Percent Completed: 15 Days / 100 Days = 0.15 = 15%
•Planned Value: $3,000
12% X $20,000 = $2,400
Earned Value = $2,400

10. Cost
Variance
(CV)
The difference between the Earned Value
(EV) and the Actual Cost (AC) that shows
how much ahead or behind in the budget
the project is at any given point
A negative CV is the amount the project is
over budget
A positive CV is the amount the project is
under budget

11. Cost
Variance
(CV):
Example
•Budget At Completion: $20,000
•Planned Schedule Duration: 100 Days
•Current Day in the Project: 15 Days
•Actual Work Completed: 12%
•Actual Costs (AC): $3,000
•Planned Percent Completed: 15 Days / 100 Days = 0.15 = 15%
•Planned Value: $3,000
•Earned Value: $2,400
$2,400 - $3,000 = -$600
Cost Variance = -$600
This Project is over budget

12. Cost
Performance
Index (CPI)
An indicator into the speed or rate of spending compared
to the value being generated (Is the project budget on
track)
CPI less than 1 shows the project is spending too fast and is
over budget
CPI equal to 1 shows the project budget is on track
CPI greater than 1 shows the project is under budget
Cost Performance Index = Earned Value Divided by Actual
Cost

13. Cost
Performance
Index (CPI):
Example
•Budget At Completion: $20,000
•Planned Schedule Duration: 100 Days
•Current Day in the Project: 15 Days
•Actual Work Completed: 12%
•Actual Costs (AC): $3,000
•Planned Percent Completed: 15 Days / 100 Days = 0.15 = 15%
•Planned Value: $3,000
•Earned Value: $2,400
•Cost Variance: -$600
$2,400/$3,000 = 0.8
Cost Performance Index = 0.8
This Project is over budget

14. Schedule
Variance
(SV)
The difference between the planned work
completed versus the amount of work that
was completed
A negative SV is an estimate of how much
the project is behind schedule
A positive SV is an estimate of how much
the project is ahead of schedule
Schedule Variance = Earned Value – Planned
Value

15. Schedule
Variance
(SV):
Example
•Budget At Completion: $20,000
•Planned Schedule Duration: 100 Days
•Current Day in the Project: 15 Days
•Actual Work Completed: 12%
•Actual Costs (AC): $3,000
•Planned Percent Completed: 15 Days / 100 Days = 0.15 = 15%
•Planned Value: $3,000
•Earned Value: $2,400
•Cost Variance: -$600
•Cost Performance Index: 0.8
$2,400 - $3,000 = -$600
Schedule Variance = -$600
This Project is $600 worth of work
behind schedule

16. Schedule
Performance
Index (SPI)
The indicator into the speed or rate of the work being getting
completed compared to the work that was expected to be
completed
SPI less than 1 shows the project as being behind schedule
SPI equal to 1 shows the project as being on track
SPI greater than 1 shows that the project is ahead of
schedule
Schedule Performance Index = Earned Value divided by
Planned Value

17. Schedule
Performance
Index (SPI):
Example
•Budget At Completion: $20,000
•Planned Schedule Duration: 100 Days
•Current Day in the Project: 15 Days
•Actual Work Completed: 12%
•Actual Costs (AC): $3,000
•Planned Percent Completed: 15 Days / 100 Days = 0.15 = 15%
•Planned Value: $3,000
•Earned Value: $2,400
•Cost Variance: -$600
•Cost Performance Index: 0.8
•Schedule Variance: -$600
$2,400/$3,000 = 0.8
Schedule Performance Index = 0.8
This Project is behind schedule

18. Other EVM Values
Estimate At Completion
(EAC)
• Based on the current
spending rate, EAC is
an estimate of how
much it will actually
cost to complete the
whole project
• EAC = BAC/CPI
Estimate To Completion
(ETC)
• Based on the current
spending rate, ETC is an
estimate of how much
it will actually cost
from a specified point
forward to complete
the project; it is simply
the EAC minus the
current actual costs
• ETC = EAC – AC
Variance At Completion
(VAC)
• The difference
between the planned
budget (BAC) and the
new forecast budget
(EAC)
• VAC = BAC – EAC
To-Complete
Performance Index
• An estimate of how
hard it would be to
meet the project’s
objectives
• TCPI (BAC – EV)/(BAC –
AC)

19. Earned Value
Management
Joshua Render
https://agile-mercurial.com
https://twentyfirstcenturyworkfor
ce.com/