Earned Value Project Management

Published: 2009-04-01
Last updated: 2022-03-19

Earned Value Project Management uses Earned Value Analysis (EVA), which is another important project controlling tool that helps to control cost and schedule in larger projects or sub-projects. The following example shows how it works.

Let us assume we are at the end of week 16 of a small project with 12 work packages, 7 of which are already completed, and another work package has been started.

Earned Value Analysis Example: Gantt ChartEarned Value Analysis Example: Gantt Chart

Our project account shows the actual cost accrued, AC = 2.3 Mill. $, and the work package experts tell us the value of the work accomplished, earned value, EV = 1.4 Mill. $. The project planning documents show that by the end of week 16 we should have accomplished work corresponding to the planned value, PV = 1.8 Mill. $.

Earned Value Analysis - SnapshotEarned Value Analysis - Snapshot

In earlier presentations of that matter we find

  • Planned Value PV = Budgeted Cost of Work Scheduled BCWS
  • Earned Value EV = Budgeted Cost of Work Performed BCWP
  • Actual Cost AC = Actual Cost of Work Performed ACWP

Performance Indices: CPI & SPI

We use the values PV, EV and AC to calculate Cost Performance Index (CPI) and Schedule Performance Index (SPI):

Earned Value Analysis: Formulas for CPI, SPIEarned Value Analysis: Formulas for CPI, SPI

In our example, we obtain CPI = 0.609 and SPI = 0.778 indicating that we are over budget and behind schedule, because CPI < 1 and SPI < 1.

  • If CPI < 1, the project is over budget
  • If CPI = 1, the project is on budget
  • If CPI > 1, the project is under budget

  • If SPI < 1, the project is behind schedule
  • If SPI = 1, the project is on schedule
  • If SPI > 1, the project is ahead of schedule

Earlier presentations refer to

  • Cost Variance CV = BCWP – ACWP = EV - AC
  • Schedule Variance SV = BCWP – BCWS = EV – PV

In our example, this would lead to a

  • Cost Variance of CV = 1.4 Mill. $ - 2.3 Mill. $ = - 0.9 Mill. $
  • Schedule Variance of SV = 1.4 Mill. $ - 1.8 Mill. $ = - 0.4 Mill. $


Using earned value analysis might not be sufficient if we need to solve problems of cost or schedule overrun. Under most conditions, we can combine it with other tools like

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