Earned Value fundamentals

Earned Value Management Fundamentals

Welcome to the course

Introduction

Before getting started, please use the comments area below to

introduce yourself (you’re colleagues want to meet you!)

Tell us the business sector/industry you’re coming from,

your company name if you like, your experience with project

management so far and if you have ever been involved with the

challenging world of Earned Value!

What are your expectations from the course?

Let’s get started!

The ‘Earned Value Fundamentals’ is an introduction course to the

Earned Value Management world (or the Project Controls world!)

We take for granted that you know how to plan a project, develop

the WBS and create activities taking into account the resources

availability. You also know how to distribute the project budget.

Purpose of the course is to understand the Schedule – Cost

integration and learn how Earned Value will help you make

realistic forecasts and get early warning signals that will support

your decision making when planning preventive actions.

Enjoy the course!

identify

stakeholders

scope

WBS

activities

resources

costs

communications

coordinate

resources

manage

stakeholders

scope

schedule

costs

resources

reporting

lessons learnt

dismiss team

close project

Planning Executing ClosingMonitor & Control

Initiating

The Project Management lifecycle

Planning ExecutingMonitor & Control

The Project Management lifecycle

WBS

Schedule - Critical Path Method

Distribute Budget – Cost Profile

Allocate Resources

Project Baseline

Record Progress / Actuals

- Dates

- Costs

- Resources

Results & Reporting

Progress

Changes

Variances from the Baseline

Planning

WBS

Schedule - Critical Path Method


Allocate Resources

Project Baseline

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 01 02 03 04 05 06 07 09

planned

baseline

Planning

WBS

Critical Path Method


Allocate Resources

Project Baseline

Executing

Record Progress / Actuals

- Dates

- Costs

- Resources

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 01 02 03 04 05 06 07 09

planned

baselineactual

status

date

Planning

WBS

Critical Path Method


Allocate Resources

Project Baseline

Executing

Monitor & Control

Results & Reporting

Progress

Changes

Variances from the Baseline

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 01 02 03 04 05 06 07 09

planned

baselineactual

status

date

Earned Value ElementsEarned Value ElementsEarned Value ElementsEarned Value Elements

Planning Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 01 02 03 04 05 06 07 09

planned

baseline

Project:

Project: Replacement of pits and

ducts along a 200m pavement.

Project Duration: 25w

Budgeted Cost: $250.000

Project Baseline:


planned

baseline

Project:





Project Baseline:

For training purposes, we shall focus on the first project activity that will guide us through the Earned Value Elements.


planned

baseline

Project:



Activity:

Lay 50m of ducts

Baseline Duration: 3weeks – 15days

Baseline Cost: $10.000



Project Baseline:

Cost profile:

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000

$250,000


planned

baseline

Activity:

Lay 50m of ducts



Cost profile:

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000 $3.000

$8.000$10.000

15m40m

50m

The schedule has been developed. The baseline is set.

We have planned to lay 50m of ducts within 15 days.

The budgeted cost is $10.000 and it is cumulatively distributed along the activity duration.


planned

baseline

Activity:

Lay 50m of ducts



Cost profile:

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000 $3.000

$8.000$10.000

15m40m

50m

Budget At Completion

(BAC): $10.000

Distribution over the activity duration

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 01 02 03 04 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m

The schedule has been developed. The baseline is set and the BAC has been agreed.


The baseline cost, is $10.000 and it is cumulatively distributed along the activity duration.

The BAC is not standing alone. For each week of the activity a specific amount of work has been planned to be performed.

Budget At Completion (BAC): $10.000

Period Cumulative

$3.000 $3.000

$5.000 $8.000

$2.000 $10.000

Work Planned: 50m of ducts

Period Cumulative

Week 1: 15m 15m

Week 2: 25m 40m

Week 3: 10m 50m

Activity Duration: 15d

Period Cumulative

5d 5d

5d 10d

5d 15d

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 01 02 03 04 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m

One week later we update the project progress…

The schedule has been developed. The baseline is set and the BAC has been agreed.


The baseline cost, is $10.000 and it is cumulatively distributed along the activity duration.

The BAC is not standing alone. For each week of the activity a specific amount of work has been planned to be performed.

Executing Project Week

Activity:

Lay 50m of ducts



Cost profile:

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000

We planned to lay 15meters within the first five days.

However, one week later when the progress updated, only 10m were completed.

The actual activity cost is so far $3.000.

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Activity:

Lay 50m of ducts



Cost profile:

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000




10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

Actual Cost (AC) on Week 1: $3.000

Actual Cost is the cost of work

performed by the day the progress

updated. It’s not necessarily the cost

that has been paid to the contractor.


Activity:

Lay 50m of ducts



Cost profile:

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000




10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m






You may also see the AC as Actual Cost of Work Performed (ACWP).

The Actual Cost, or Actual Cost of Work Performed (ACWP) consists of:

Actual [Labor + Non labor (equipment and machinery) + Material (the cost of ducts) + Expenses

(like training, but expenses do not apply to all the project activities)]


Activity:

Lay 50m of ducts



Cost profile:

Week 1: $3.000

Week 2: $5.000

Week 3: $2.000

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m






Week 1 Planned Actual

Work 15m 10m

Cost $3.000 $3.000

Project Week

How is the project doing?10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

Question:

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

How is the project doing?

Question:

How much work should have been done so far?

How much did the work cost?

How much work has been actually done?

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:


Period Cumulative

$3.000 $3.000

$5.000 $8.000

$2.000 $10.000


Period Cumulative

Week 1: 15m 15m

Week 2: 25m 40m

Week 3: 10m 50m


Period Cumulative

5d 5d

5d 10d

5d 15d

Planned Value Cost (PVC) or

Budgeted Cost of Work Scheduled

(BCWS)

How much work should have been

done at the end of week 1?

Planned Value is the target against

which we are measuring the progress




Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:


Period Cumulative

$3.000 $3.000

$5.000 $8.000

$2.000 $10.000


Period Cumulative

Week 1: 15m 15m

Week 2: 25m 40m

Week 3: 10m 50m


Period Cumulative

5d 5d

5d 10d

5d 15d

Planned Value Cost (PVC) or

Budgeted Cost of Work Scheduled

(BCWS)

How much work should have been

done at the end of week 1?

Planned Value is the target against

which we are measuring the progress

Planned Value Cost at the end of Week 1




Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:


Period Cumulative

$3.000 $3.000

$5.000 $8.000

$2.000 $10.000


Period Cumulative

Week 1: 15m 15m

Week 2: 25m 40m

Week 3: 10m 50m


Period Cumulative

5d 5d

5d 10d

5d 15d

PVC = BAC x Planned % Complete Planned Value Cost at the end of Week 1

We planned to complete 30% of the

Budget At Completion ($10.000) at the

end of the week 1.

PVC = $10.000 x 30% = $3.000




Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:





Period Cumulative

$3.000 $3.000

$5.000 $8.000

$2.000 $10.000


Period Cumulative

Week 1: 15m 15m

Week 2: 25m 40m

Week 3: 10m 50m


Period Cumulative

5d 5d

5d 10d

5d 15d

PVC = BAC x Planned % Complete Planned Value Cost at the end of Week 1

We planned to complete 30% of the

Budget At Completion ($10.000) at the

end of the week 1.

PVC = $10.000 x 30% = $3.000

PVC = $10.000 x 30% = $3.000

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:




Actual Cost (AC) is the Actual Cost

of Work Performed until the status

date (you may also see ACWP).

The Actual Cost of the work at the end

of the week1 is $3.000.

PVC = $10.000 x 30% = $3.000

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:









PVC = $10.000 x 30% = $3.000

AC= $3.000

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:









PVC = $10.000 x 30% = $3.000

AC= $3.000 It doesn’t look that bad, right?

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:




Earned Value (EV) signifies how

much work has been actually done.

To measure the EV we need to know:

- BAC

- Performance % Complete

EV = BAC x Performance % Complete

PVC = $10.000 x 30% = $3.000

AC= $3.000

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:







- BAC



PVC = $10.000 x 30% = $3.000

AC= $3.000


We planned to perform 15m at the end of week 1 which is the 33,33% of the total work.

However, we performed only 10m, which the 20% of the total work.

EV = $10.000 x 20% = $2.000

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:







- BAC



PVC = $10.000 x 30% = $3.000

AC= $3.000


We planned to perform 15m at the end of week 1 which is the 33,33% of the total work.

However, we performed only 10m, which the 20% of the total work.

EV = $10.000 x 20% = $2.000

EV = $10.000 x 20% = $2.000

Monitor & Control

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m


Question:







- BAC



PVC = $10.000 x 30% = $3.000

AC= $3.000


EV = $10.000 x 20% = $2.000

Earned Value explains whether the Actual Cost (AC) has been spent

effectively (Performance % Complete) providing the physical results that

was estimated to (Planned Value).


Question: Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

PVC = $10.000 x 30% = $3.000

AC= $3.000


EV = $10.000 x 20% = $2.000

Earned Value explains whether the Actual Cost (AC) has been spent

effectively (Performance % Complete) delivering the physical results

that was estimated to (Planned Value).

The project is not doing very well…Here are the facts:

Answer:

PVC = $10.000 x 30% = $3.000

AC= $3.000

EV = $10.000 x 20% = $2.000

Earned Value elements within the Project Management lifecycle


Planned Value Cost

Actual Cost

Earned Value

Initiating

EV = BAC x Performance % CompletePVC = BAC x Planned % Complete



Planned Value Cost

Actual Cost

Earned Value

Initiating

BCWP: Budgeted Cost

of Work Performed

BCWS: Budgeted Cost

of Work Scheduled

ACWP: Actual Cost

of Work Performed



Planned Value Cost

Actual Cost

Earned Value

Initiating

BCWP: Budgeted Cost

of Work Performed

BCWS: Budgeted Cost

of Work Scheduled

ACWP: Actual Cost

of Work Performed

Why two terms for the same thing?



Planned Value Cost

Actual Cost

Earned Value

Initiating

BCWP: Budgeted Cost

of Work Performed

BCWS: Budgeted Cost

of Work Scheduled

ACWP: Actual Cost

of Work Performed


New term !



Planned Value Cost

Actual Cost

Earned Value

Initiating

BCWP: Budgeted Cost

of Work Performed

BCWS: Budgeted Cost

of Work Scheduled

ACWP: Actual Cost

of Work Performed


New term !

Old term !



Planned Value Cost

Actual Cost

Earned Value

Initiating

BCWP: Budgeted Cost

of Work Performed

BCWS: Budgeted Cost

of Work Scheduled

ACWP: Actual Cost

of Work Performed


New term !

Old term !

Both correct and both in use!

Measuring the Earned Valuethe Performance % Complete type


Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

Earned value is all about

measuring the work performed.

The Performance % Complete should

provide realistic and tangible

information for the project’s progress.

It is selected during the project

planning and can be different for each

Work Package.

Althouth there are several methods in

this course we focus in three methods,

proven to be best practices.

PVC = $10.000 x 30% = $3.000

AC= $3.000


Performance % Complete

� Percent Complete Estimates

� Weighted Milestones

� Fixed Formula

EV = $10.000 x 20% = $2.000


Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

Percent Complete EstimatesPVC = $10.000 x 30% = $3.000

AC= $3.000


EV = $10.000 x 20% = $2.000


It's the most commonly used

measurement method as it's easy to

administer within the already complex

project environment. However it is

subjective and often relies on the

project manger's perspective.

Expert judgment, experience and

comprehensive understanding of the

project scope are the requirements to

maximize the benefits of the %

complete estimates in the project.

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

Percent Complete EstimatesPVC = $10.000 x 30% = $3.000

AC= $3.000


EV = $10.000 x 20% = $2.000


It's the most commonly used

measurement method as it's easy to

administer within the already complex

project environment. However it is

subjective and often relies on the

project manger's perspective.

Expert judgment, experience and

comprehensive understanding of the

project scope are the requirements to

maximize the benefits of the %

complete estimates in the project.However, it can be less subjective when tangible measurement is involved; like in our example

the meters of the pits and ducts planned to complete per week (or per reporting period).

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline

Weighted Milestones PVC = $10.000 x 30% = $3.000

AC= $3.000


EV = $10.000 x 20% = $2.000


The planned work is divided into

segments.

Each Weighted Milestone represents

the percent of the work planned to be

achieved within the period.

You can use it for work packages that

exceed one measurement period.

The milestone values should be set

before the work starts.

The challenge is to agree on the

values and make it clear to everyone

involved what the values represent.

25%60%

100%

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline

Fixed Formula PVC = $10.000 x 30% = $3.000

AC= $3.000


EV = $10.000 x 20% = $2.000


It can be used in short duration

activities.

Once the work starts, the 50% of the

work is considered as completed. At

the end of it the 100% is completed.

Other examples are:

10/90

25/75

0/100

50% 100%

50/50

Forecasting the project’s future using EVM


it's time to get some meaningful results from the project

and try to forecast the future of the project realistically




Estimate To Complete

How can we estimate the cost left to perform until the completion of the activity?

Question:

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

Estimate To Complete cost ETC:

Answer:

ETC = Remaining cost of work

(40m*$200/m)

ETC = $8.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

PVC = $10.000 x 30% = $3.000

How can we estimate the cost left to perform until the completion of the activity?

Question:

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

Why do we Estimate To Complete?

Because the remaining cost of work is not always fixed. It may vary depending on several factors,

like additional changes that may change the budget.

Perhaps we will be able to complete the activity earlier and therefore cost less, or later than

planned, or use more resources which causes increased cost.

EV = $10.000 x 20% = $2.000

Estimate To Complete costETC:

Answer:

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

PVC = $10.000 x 30% = $3.000

ETC = Remaining cost of work

(40m*$200/m)

ETC = $8.000




Estimate At Completion

So, at the end of the activity how much will it cost?

Question:

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

Why do we Estimate At Completion?

Because the variable used to forecast the cost at the completion of the activity/project is the ETC.

Therefore, is not a fixed figure and can be adjusted in the future.

EV = $10.000 x 20% = $2.000

The Estimate At Completion cost EAC:

Answer:

EAC = ETC + AC

EAC = $8.000 + $3.000 = $11.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $8.000

PVC = $10.000 x 30% = $3.000

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $11.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $8.000

PVC = $10.000 x 30% = $3.000

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $11.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $8.000

PVC = $10.000 x 30% = $3.000

How is Earned Value involved with all this?

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $11.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $8.000

PVC = $10.000 x 30% = $3.000

Earned Value and Cost Performance

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $11.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $8.000

PVC = $10.000 x 30% = $3.000

Don’t forget that our activity is already underperforming.

The ETC and EAC reflect the current status of the activity/project. However, at this point they don’t

include the cost of delay or underperformance.

Identifying the cost variance between the AC and EV enable us a more realistic picture of the

activity performance at the current time period.

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $11.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $8.000

PVC = $10.000 x 30% = $3.000

Cost Variance (CV) = EV - AC

CV = $2.000 - $3.000 = $-1.000

CV = $-1.000

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $10.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $7.000

PVC = $10.000 x 30% = $3.000

CV = $-1.000

Which is the relationship between the AC and the EV?

Cost Performance Index (CPI) = EV / AC

CPI = $2.000 / $3.000 = 0.67

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $10.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $7.000

PVC = $10.000 x 30% = $3.000

CV = $-1.000

Which is the relationship between the AC and the EV?

Cost Performance Index (CPI) = EV / AC

CPI = $2.000 / $3.000 = 0.67

In simple terms, for each dollar spent, only 0.67 worth paying!

CPI = 0.67

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $10.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $7.000

PVC = $10.000 x 30% = $3.000

Earned Value and Schedule Performance

CV = $-1.000 CPI = 0.67

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $10.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $7.000

PVC = $10.000 x 30% = $3.000

CV = $-1.000 CPI = 0.67

As with the CV, we want to identify and compare the work planned to perform within a time period

with the work accomplished.

The Schedule Variance (SV) will provide us with the right information. It is expressed in in

monetary values.

SV = EV – PV

SV = $2.000 - $3.000 = $-1.000

SV = $-1.000

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $10.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $7.000

PVC = $10.000 x 30% = $3.000

CV = $-1.000 CPI = 0.67

SV = $-1.000

How the Planned and the Earned Value are related?

Schedule Performance Index (SPI) = EV / PV

SPI = $2.000 / $3.000 = 0.67

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $10.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $7.000

PVC = $10.000 x 30% = $3.000

CV = $-1.000 CPI = 0.67

SV = $-1.000

How the Planned and the Earned Value are related?

Schedule Performance Index (SPI) = EV / PV

SPI = $2.000 / $3.000 = 0.67

SPI = 0.67

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

AC= $3.000

EV = $10.000 x 20% = $2.000

EAC = $10.000

PVC = $3.000

AC = $3.000

EV = $2.000

BAC = $10.000

ETC = $7.000

PVC = $10.000 x 30% = $3.000

CV = $-1.000 CPI = 0.67

SV = $-1.000

CPI, SPI rule:

CPI > 1 more work done than what actually paid for. CPI = 1 you got exactly what you paid for.CPI < 1 less work done than what actually paid for.

SPI > 1 - ahead of schedule. The work accomplished is more that the work planned.SPI = 1 - the work accomplished is exactly the work planned.SPI < 1 - behind schedule. The work accomplished is less than planned.

SPI = 0.67

Reporting Earned Value


Now that we know what Earned Value means, how it’s used and why

it can make a big difference in a project, we need to know how to

present and report data.





Tables and diagrams help to communicate the message clearly and

can be used in meetings for decision making.





Tables and diagrams help to communicate the message clearly and

can be used in meetings for decision making.

The Earned Value data are reported cumulatively.

The cumulative data represent a comprehensive project picture as they incorporate the overall project performance up to date.

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

PVC

AC

EV

BAC:

Activity: Lay 50m of ducts

Week 1

ETC

CV

$10.000

$3.000

$3.000

$2.000

$8.000

$11.000

$-1.000

SV $-1.000

EAC

35m

$9.000

The first reporting period (week 1) we have the following results:

Back to our example

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

BAC:


Week 1

$10.000

35m

$9.000

1

0.5

1.5

0.67

0.67

CPI SPIW1

The first reporting period (week 1) we have the following results:

PVC

AC

EV

ETC

CV

$3.000

$3.000

$2.000

$8.000

$11.000

$-1.000

SV $-1.000

EAC

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

BAC:


Week 1

$10.000

35m

$9.000

1

0.5

1.5

0.67

0.67

CPI SPIW1

The second reporting period (week 2) the activity performance is:

PVC

AC

EV

ETC

CV

$3.000

$3.000

$2.000

$8.000

$11.000

$-1.000

SV $-1.000

EAC

Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

PVC

AC

EV

BAC:


Week 1 Week 2

ETC

CV

$10.000

$3.000

$3.000

$2.000

$8.000

$11.000

$-1.000

$8.000

$9.000

$7.000

$3.000

$12.000

$-2.000

SV $-1.000 $-1.000

EAC

35m

$9.000

1

0.5

1.5

0.67

0.67

CPI SPIW1


Project Week10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 320804�01�02�03�04 03 0401 02 05 06 07 09

planned

baseline$3.000

$8.000$10.000

15m40m

50m10m

PVC

AC

EV

BAC:


Week 1 Week 2

ETC

CV

$10.000

$3.000

$3.000

$2.000

$8.000

$11.000

$-1.000

$8.000

$9.000

$7.000

$3.000

$12.000

$-2.000

SV $-1.000 $-1.000

EAC

35m

$9.000

1

0.5

1.5

0.670.78

0.67

0.87

CPI SPIW1 W2



When reporting Earned Value, consistency is everything!

Only when the reporting periods are relevant you can get

meaningful reports!

Thanks for attending

EVM Fundamentals!

Denise Fotopoulou

Earned Value fundamentals

Business

Transcript of Earned Value fundamentals