Earned Value Management (EVM) — Measuring Project Performance

EVM integrates scope, schedule, and cost to objectively measure project performance.

Key values:

PV (Planned Value) — budgeted cost of work scheduled

EV (Earned Value) — budgeted cost of work actually performed

AC (Actual Cost) — actual cost of work performed

BAC (Budget at Completion) — total project budget

Variances (negative = bad):

CV (Cost Variance) = EV − AC (negative = over budget)

SV (Schedule Variance) = EV − PV (negative = behind schedule)

Performance Indices (above 1.0 = good):

CPI (Cost Performance Index) = EV/AC

SPI (Schedule Performance Index) = EV/PV

Forecasting:

EAC (Estimate at Completion) = BAC/CPI (if current rate continues)

ETC (Estimate to Complete) = EAC − AC

VAC (Variance at Completion) = BAC − EAC

Example: CPI of 0.80 means for every $1 spent, only $0.80 of work is being done. Project will cost 25% more than planned if not corrected.

Reference:

Wikipedia: Earned Value Management

https://en.wikipedia.org/wiki/Earned_value_management