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.
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. $.
In earlier presentations of that matter we find
We use the values PV, EV and AC to calculate Cost Performance Index (CPI) and Schedule Performance Index (SPI):
In our example, we obtain CPI = 0.609 and SPI = 0.778 indicating that we are over budget and behind schedule.
Earlier presentations refer to
In our example, this would lead to a
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
In case you would like to use practical and useful packages of tools, templates and checklists, here you can get them. They save you a lot of time, are easy to use and easy to change:
All four PM Phases in one Set