Earned value management (EVM) provides visibility into a project's technical, cost, and schedule performance. It integrates cost, schedule, and technical data to evaluate progress and forecast completion costs. For a project to use EVM effectively, it must establish measurable work, develop a measurable plan and schedule, decide what work will be completed over time, track work accomplished, and verify costs. Taking action on variances is also important for managing performance.

1. Roger H. Mandel
858-735-2038
RMandel@PramsCo.com
Earned Value
Management
Overview for understanding
of the value of EVM
analytical data

2. Concept of Earned Value Management
(EVM)
• A tool for the Customer and Supplier to have visibility into
technical, cost and planned progress
http://www.acq.osd.mil/evm
• Integrates the cost, planned (schedule) and technical aspects
into programmatic report synopses
• Insight into progress that provided information on cost and
planned (schedule) performance data
• Visually depicts budget efficiencies for both time and cost
• Time-phased budgets to specific tasks and/or statements of
work

3. Management Needs
• Indicates work progress that properly relates cost, schedule
and technical accomplishments
• Data presented are valid, timely, and can be audited
 Supplies management with information at a practical level of
summarization
• Data presented to the customer are from the same internal EVM
system used by the supplier to manage the project

4. Guideline Concepts
• The guideline approach established the framework of an
integrated cost, schedule, and technical management system
• EVM Guidelines provides rules for a system that is acceptable
and that provides valid, timely data that can be audited
• The guidelines can be used for Research and Development,
construction, modification, and production projects

5. Industry Standards
• Industry recognizes the importance of earned value in
managing both supplies and services
• There are thirty two (32) Guidelines from industry standard
that should become your baseline in determining the validity
of any earned value management system

6. Management System
• In designing, implementing and improving the EVM system,
the objective should be to do what makes sense
• The management system that meets the letter of the criteria
but not their intent will not support management’s needs

7. Compliance will facilitate:
• Timely baseline development and control will provide
information break down by product as well as by organizational
function
• Objective measurement of accomplishment against the plan
that summarized reporting to higher management for use in
decision-making
• With reporting discipline and in objective analysis of variances,
will direct management actions to manage cost and schedule
performance

8. Earned Value Management
• TO BE EFFECTIVE:
 ESTABLISH MEASURABLE EFFORTS - You cannot manage
what you cannot measure
 DEVELOP A PLAN THAT IS MEASURABLE - That becomes
your budget
 DECIDE WHAT WORK IS TO BE ACCOMPLISHED OVER TIME
- That becomes your baseline plan
 ESTABLISH WHAT WORK HAS BEEN ACCOMPLISHED - That
is your work earned or earned value
 VERIFY THE COST TO ACCOMPLISH THAT WORK - That is
what has been expended

9. Earned Value Management
• TAKE ACTION DUE TO SCHEDULE VARIANCES:
 What was to be accomplished at this point in time?
 What has been accomplished at this point in time?
– The difference is the Schedule Variance
– Determine cause, effect and mitigation
• TAKE ACTION DUE TO COST VARIANCES:
 What has been accomplished at this point in time?
 What was the cost to accomplish the efforts at this point in time?
– The difference is the Cost Variance
– Determine cause, effect and mitigation

10. Earned Value Management
Master
Planning
Selected
Reporting
Elements
ADA
Products
Software
Tools
Standards
ADA
Study
ADA
Controls
ADA
Interface
CPCO #1
MOS
CPCO #2
MOL
CPCO #3
MAC
Marketing
Functional
Manager
ADA
Applications
Control
Account
Control
Account
Control
Account
Program
Manager
Engineering
Functional
Manager
Software
Engineering
Security
Systems
Control
Account
Operations
Functional
Manager
Hardware
Engineering
LAN
Applications
Control
Account
Control
Account
Planning
Packages
Contract Work Breakdown Structure &
Organization Breakdown Structure
Product
Development
Software Instigation Program
Selected
PSWBS
Elements
OBS DATA SUMMARIZATION
W
B
S
D
A
T
A
S
U
M
M
I
Z
A
T
I
O
N
Functional
Organization
Work
Packages
Planned
Earned
Expended
BAC
EAC
CWBS
Extension

11. Cumulative Project Trends

12. Cumulative Project Trends
TREND STATUS REPORT
0
50
100
150
200
250
300
350
400
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
TIME RELATED
LABORHOURSorDOLLARS
Earned
Progress
Expended
Scheduled
Planned

13. Cumulative Project Trends
TREND STATUS REPORT
0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5 6 7
TIME RELATED
LABORHOURSorDOLLARS
Earned
Progress
Expended
Scheduled
Planned
COST
VARIANCE
SCHEDULE
VARIANCE

14. Status and Trends
Red indicates at least 3 weeks negative Schedule Variance
AS OF DATE
23-Nov-03
Task
No. Tasking
Status
SV
Status
CV
Percent
Earned
2110 Task Lead Degrading 71.5%
2220 Modeling Degrading 82.2%
2230 Integration Degrading Degrading 76.6%
2310 Docs Degrading 77.1%
3110 Software Degrading 72.6%
3210 SW Devel Improving Degrading 91.0%
3215 KG-84 WF Improving Degrading 80.6%
3224 KWR-46 W/F Improving Degrading 96.1%
3330 Gen Infras Improving Degrading 83.5%
3410 HMI Desg Holding Degrading 87.3%
3624 Algor Holding Degrading 96.0%
5120 Envir. Test Improving Holding 98.1%
OVER ALL Improving Degrading 82.4%
About 2 weeks behind schedule
About 2 weeks behind schedule
About 7 weeks behind schedule
About 1 week behind schedule
About 3 weeks behind schedule
About 2 weeks behind schedule
About 1 week behind schedule
About 2 weeks behind schedule
About 6 weeks behind schedule
About 3 weeks behind schedule
About 5 weeks behind schedule
Schedule
Position
Green Block
WAVEFORMS
Task Status due to change in Cumulative Schedule & Cost Variances.
Positive Performance
SV is Schedule Variance. The difference between Earned and Planned
CV is Cost Variance. The difference between Earned and Expended.

15. Estimate at Completion (EAC)
Development
MCS S/W
MCS 15855 Form: 28-Feb-02 To: 23-Nov-03
EAC 6 3 FUTURE Dollars or Hours EFF.
PRODUCT CUM. Periods Periods EST. TCPI %of % @
CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC
Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8%
MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2%
MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7%
Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2%
Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2%
MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2%
ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5%
Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0%
CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8%
G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1%
PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9%
WR BAC/EAC
Developed by: Roger H. Mandel LRE Remain
S/W for Chris Newborn
Budget at Completion (BAC) is the authorized budget. Latest Revised Estimate (LRE) is latest
revised estimate. Progress (Prog.). Cost efficiency (EFF)

16. Formula Card
PERFORMANCE INDICES Developed by: RMandel @PramsCo.Com
Less than 1.0 is unfavorable
Cost Efficiencies (Expended)
Earned
Expended
Schedule Efficiencies (Planned)
Dollars
Earned
Planned Percent
OVERALL STATUS Items
Budget at Completion (BAC)
Earned
BAC
Expended
BAC
TO COMPLETE PERFORMANCE INDEX
Work Remaining
Unexpended Budget Time Line
BAC - Earned Cost Variance (CV) = Earned - Expended
BAC - Expended
Earned
Latest Revised Estimate by the supplier (LRE) Expended
Estimate at Completion is your projection (EAC)
Schedule Variance (SV) = Earned - Planned
You can substitute LRE or EAC for BAC in the Denominator
Earned
ESTIMATE at COMPLETION (EAC) Planned
BAC - Earned Variance at Completion (VAC) = BAC - LRE
Projected Efficiencies
Note: Negatives are unfavorable
x 100
x 100
Cost Variance % (CV%) =
Schedule Variance % (SV%) =
EAC = EXPENDED +
Cost Performance Index (CPI) =
Schedule Performance Index (SPI) =
Percent Complete =
Percent Spent =
TCPI BAC =
TCPI BAC =
1 2 3 4 5 6 7 8 9 10 11 12 13
EXPENDED or
CONSUMED
EARNED or
ACCOMPLISHED
SCHEDULED
or PLANNED
BUDGETED
Cost
Variance
Schedule
Variance
Time Now
BAC

17. Purpose of Earned Value Management
• What does Earned Value Management do for Management?
 Measurement of accomplished efforts against the plan so
management can effectively make risk management decisions
 In designing, implementing and improving the EVM system, the
objective is to do what makes sense
 Directs management’s decisions for cost and schedules
performance

18. Conclusion
• EVM is a proven value over many years
 Integrates cost, schedule and technical performance
 Provides planning and control discipline on projects
• Reports summarize objective data from the internal system
 The program achieves improvements where accountability
derives systems effectiveness
• American National Standards Institute (ANSI)
 It is now part of the International Standards Organization’s
requirement to become certified as a ISO 9000 organization
• Electronics Industries Alliance (EIS)
• ANSI/EIS-748-C
 The new ANSI standard on Earned Value Management System
guidelines has been approved

19. Back Up

20. Contract Performance Report
Integrated Program Management Report Format 2

21. Quick Look
File: CPR Software Customer The Government Form: 28-Feb-02 To: 23-Nov-03
WO Example Description:
1 2 3 4 5 6
Scheduled
Planned Earned Expended
Budget at
Completion
Latest
Revised
Estimate
Date BCWS BCWP ACWP BAC LRE
1 Jan-02 $0 $0 $0 $13,612,328 $13,582,985
2 Feb-02 $1,708,000 $1,708,074 $1,708,074 $13,612,328 $13,582,985
3 Mar-02 $2,672,000 $2,333,343 $2,324,376 $13,612,328 $13,582,985
4 Apr-02 $3,712,187 $2,882,122 $3,047,592 $13,642,344 $13,688,913
5 May-02 $4,742,291 $3,633,938 $3,974,360 $13,911,373 $14,206,861
6 Jun-02 $6,052,344 $4,622,395 $5,376,493 $13,911,373 $14,693,310
7 Jul-02 $6,810,848 $5,325,287 $6,404,564 $13,911,373 $15,640,541
8 Aug-02 $7,745,218 $5,973,591 $7,465,236 $13,911,373 $16,090,229
9 Sep-02 $8,623,791 $6,853,744 $9,029,286 $13,911,373 $22,830,318
10 Oct-02 $9,480,043 $7,661,221 $10,214,832 $13,907,817 $22,830,320
11 Nov-02 $10,166,968 $8,262,559 $10,970,763 $13,907,817 $22,830,320
12 Dec-02 $11,027,853 $8,828,656 $12,026,907 $13,907,817 $22,830,320
13 Jan-03 $11,641,078 $9,361,548 $13,018,779 $14,530,683 $22,830,320
14 Feb-03 $12,200,000 $12,631,080 $14,256,473 $14,530,683 $22,830,320
15 Mar-03 $15,811,258 $15,900,611 $15,942,365 $26,956,128 $26,830,128
16 Apr-03 $17,117,885 $16,905,911 $17,150,254 $26,956,129 $26,956,128
17 May-03 $18,389,493 $17,904,295 $18,377,464 $27,018,953 $27,018,953
18 Jun-03 $19,804,083 $19,232,824 $20,020,315 $27,134,209 $27,134,209
19 Jul-03 $20,765,126 $19,996,797 $21,208,817 $27,134,209 $29,887,669
20 Aug-03 $21,584,712 $20,775,864 $22,392,161 $27,134,209 $29,728,716
21 Sep-03 $22,417,694 $21,351,286 $23,312,705 $27,166,410 $29,762,938
22 Oct-03 $22,937,994 $21,908,166 $24,483,585 $27,166,410 $33,573,719
23 Nov-03 23,111,327$ $22,292,564 $25,595,345 $27,039,864 33,436,558$
24 Dec-03
Limited Rate Initial Production
$0
$4
$8
$12
$16
$20
$24
$28
$32
1 3 5 7 9 11 13 15 17 19 21 23Millions
Report Period as of (Date)
LRE
Expended
Budget
Earned
Scheduled

22. Cumulative data

23. Historical Trends

24. Historical Trends

25. Historical Trends

26. Cumulative Status

27. EAC Development

28. Data Collections

29. Data Graph
The different trends indicate a growth in variances for Schedule and Cost to the
baseline.

30. Data Graph

31. Current Status
Red indicates at least 3 weeks negative Schedule Variance
AS OF DATE
23-Nov-03
Task
No. Tasking
Status
SV
Status
CV
Percent
Earned
2110 Task Lead Degrading 71.5%
2220 Modeling Degrading 82.2%
2230 Integration Degrading Degrading 76.6%
2310 Docs Degrading 77.1%
3110 Software Degrading 72.6%
3210 SW Devel Improving Degrading 91.0%
3215 KG-84 WF Improving Degrading 80.6%
3224 KWR-46 W/F Improving Degrading 96.1%
3330 Gen Infras Improving Degrading 83.5%
3410 HMI Desg Holding Degrading 87.3%
3624 Algor Holding Degrading 96.0%
5120 Envir. Test Improving Holding 98.1%
OVER ALL Improving Degrading 82.4%
About 2 weeks behind schedule
About 2 weeks behind schedule
About 7 weeks behind schedule
About 1 week behind schedule
About 3 weeks behind schedule
About 2 weeks behind schedule
About 1 week behind schedule
About 2 weeks behind schedule
About 6 weeks behind schedule
About 3 weeks behind schedule
About 5 weeks behind schedule
Schedule
Position
Green Block
WAVEFORMS
Task Status due to change in Cumulative Schedule & Cost Variances.
Positive Performance

32. EVM Raw Data
Budget Budget
Task
No. Tasking 23-Nov-03
26-Oct-03
28-Sep-03
23-Nov-03
26-Oct-03
28-Sep-03
26-Oct-03
26-Jan-03
2110 Task Lead 0 0 0 (41,082) (39,752) (37,854) 796,664 345,151
2220 Modeling (46,318) (37,703) (18,973) 7,373 5,333 18,275 1,386,515 562,650
2230 Integration (144,315) (117,391) (69,293) (252,295) (182,046) (112,483) 1,674,815 719,464
2310 Docs (37,782) (24,909) (16,334) 145,764 139,545 138,685 1,219,216 708,123
3110 Software 0 0 0 (124,101) (107,432) (77,210) 1,075,813 578,523
3210 SW Devel (16,355) (31,240) (28,534) (278,586) (220,061) (200,295) 606,436 759,116
3215 KG-84 WF (69,776) (74,261) (89,587) (195,634) (177,074) (149,091) 733,675 0
3224 KWR-46 W/F (6,597) (16,510) (32,578) (257,393) (254,874) (235,503) 170,454 35,277
3330 Gen Infras (143,193) (279,663) (285,591) (765,474) (631,822) (470,757) 2,979,646 665,355
3410 HMI Desg (14,039) (16,407) (18,944) (38,269) (32,027) (23,986) 427,674 346,158
3624 Algor (15,223) (15,223) (30,466) (84,922) (76,293) (77,887) 384,855 135,611
5120 Envir. Test (12,036) (23,903) (49,435) (238,256) (233,592) (188,158) 632,769 391,628
OVER ALL (818,763) (1,029,828) (1,066,408) (3,302,781) (2,575,419) (1,961,419) 27,166,410 14,530,683
WAVEFORMS Cumulative SV Cumulative CV

33. UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO
UNCLASSIFIED//FOUOUNCLASSIFIED//FOUO 33
EAC Calculation Sheet
Software
Example Form: 28-Feb-02 To: 23-Nov-03
EAC 6 3 FUTURE Dollars or Hours EFF.
PRODUCT CUM. Periods Periods EST. TCPI % of % @
CATEGORY EFF. EFF. EFF. EFF. BAC LRE TO LRE EAC BAC Prog EAC
Project Mgmt 94.1% 76.1% 56.0% 50.0% $3,243,748 $3,720,714 67.6% $4,063,375 12.0% 79.7% 79.8%
MCS Systems 96.3% 89.3% 57.9% 50.0% 5,554,948 6,005,669 80.9% 6,924,546 20.5% 78.3% 80.2%
MCS S/W Dev. 76.2% 47.5% 39.7% 35.0% 7,460,475 11,038,572 43.2% 11,713,646 27.6% 83.4% 63.7%
Hardware 102.2% 62.6% 58.3% 58.3% 954,518 1,008,655 0.0% 934,044 3.5% 100.0% 102.2%
Testing 75.4% 59.7% 40.7% 35.0% 801,306 1,070,940 72.0% 1,267,302 3.0% 83.3% 63.2%
MFG 90.4% 43.8% 14.9% 10.0% 2,275,732 2,607,016 54.5% 3,599,423 8.4% 94.7% 63.2%
ILS 95.3% 50.6% 62.4% 50.0% 1,192,135 1,255,701 94.0% 1,537,874 4.4% 74.7% 77.5%
Closeout N/A N/A N/A 80.0% 152,364 151,142 100.8% 190,455 0.6% 0.0% 80.0%
CAS 414 104.4% 150.3% -283.8% 75.0% 149,154 147,209 88.9% 152,584 0.6% 82.7% 97.8%
G & A 88.5% 65.7% 57.1% 50.0% 5,255,485 6,430,939 59.7% 6,727,024 19.4% 82.7% 78.1%
PMB 87.1% 60.8% 47.3% 72.9% $27,039,865 $33,436,557 60.5% $37,110,272 100% 82.4% 72.9%
WR BAC/EAC
Developed by: Roger H. Mandel LRE Remain

34. Definition

35. Definitions and Acronyms
Variance at Completion (VAC): The difference between the total budgets assigned to a contract, WBS element, organizational entity
ACRONYMS
ACE: Actual Cost Expended
ACWP: Actual Cost of Work Performed (Expended Resources in $)
BAC: Budget at Completion in $
BCWP: Budgeted Cost for Work Performed in $
BCWS: Budgeted Cost for Work Scheduled in $
CPI: Cost Performance Index
CV: Cost Variance
CV%: Cost Variance as a percent
ETC: Estimate to Complete
EV: Earned Value
PMB: Performance Measurement Baseline
SPI: Schedule Performance Index
SV: Schedule Variance
SV%: Schedule Variance as a percent
TCPI: To Complete Performance Indices
VAC: Variance at Completion
RMandel@PramsCo.com
r cost account and the estimate at completion. Variance at Completion equals Budget at Completion less Estimate at Completion. It represents the amount o
expected overrun or under run.