Earned value what is

Whether you plan agilely, classically or hybrid is irrelevant: you can use the tool for all project management types. Try it out for yourself! Earned Value Analysis. Project controlling with the earned value. What is an earned value analysis and how does it work?

How is it valuable? Goals of the earned value analysis. For example, the earned value analysis answers the following questions: Am I behind schedule if my actual costs are lower than the planned costs? What will the project end up costing? Is that within the budget? Am I using the available time and resources efficiently? Why do you need the earned value? A short definition of the earned value analysis:. How does the earned value analysis work? How do you calculate the earned value?

Overview of EVA values. Overview of formulas for the values. Interpretation of the earned value diagram: examples. More progess than planned and budgeted. More progress than planned but over-budget. Less progress than planned, but within budget. Less progress than planned and over-budget.

Link to: objectiF RPM Use a template for the earned value analysis that supplies figures and diagrams. Test objectiF RPM our enterprise software with the free trial. The three types of earned value analysis. The classical earned value analysis. Example of agile earned value analysis. This technique is recommended for: Activities with unsure results Short activities that ended inside a reporting period Projects with lots of small activities and short reporting cycles.

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The agile earned value analysis. Variant 1: Originially you planned person-days for the project. The hybrid earned value analysis. Overview of our Knowledge Base. Applying knowledge with the right tool: objectiF RPM. Find more interesting downloads here. Dates Events Webinars Seminars. This site uses cookies to constantly improve your experience with our website. You can find more information about their use in our Privacy Policy. By clicking "Accept cookies" you agree to the use of functional and analytical cookies that allow us to better analyze our own website.

More Information. Close Settings Essential cookies are mandatory and do not store personal data. Essential Essential. Earned Value Metrics Explained. Planned vs. Earned Value Metrics. Planning values.

BAC Budget at Completion : The total approved budget PV Planned Value : The total cost that should have incurred till now, looking at the tasks that should have been completed by today, and valued at the original budget. Current values - Your project's status at the time of measurement. Actual Cost AC : The amount of costs effectively incurred up until now. Projected Future Values.

We can visualize the metrics in a graph. This is what it looks like:. Earned Value Analysis Example. Watch me calculate EVA metrics for you. Our Sample Project We are going to build a machine for our client — in just 14 days!

Activity Effort days Cost per day Total cost 1. Gather requirements. We are at the end of day 8 and we got the latest status and cost information. Actual values at the end of day You simply take the values from column incurred cost.

Summing up all values we get a total AC of 7, for the entire project. The PV Planned Value is calculated by multiplying the planned level of completion by the planned cost.

The planned level of completion or planned progress is simply how far we should have gotten on a task according to our schedule. The planned cost you can see in the planned values table. A value greater than 1 would mean we are below budget. The negative value indicates we are over budget. The value is the estimated amount that we are over budget. It tells you how far off schedule you are, and as for the CPI, a value of less than 1 means the project is behind schedule.

The negative value indicates a delay. Consider These Requirements. These are the key requirements: Solid schedule and budget estimate: The EVM tells you how your project is performing with respect to your original project plan and budget. For the method to return useful insights, you need both your schedule and budget to be based on realistic assumptions not a project plan that was designed to impress managers. Availability of actual cost data: This is obvious.

You need a systematic process for tracking project expenses and effort data. The data must be available within a reasonable timeframe so that your EVM metrics show the current picture and not past performance.

Cost planning on a highly granular level: This requirement is the hardest to meet. The EVM only gives you reliable and useful feedback if your cost planning is done on a very detailed level. Ideally, you have a WBS which is broken down on several levels.

Consequently, also your deliverables should be broken down into smaller work packages. Your accounting systems have to support a detailed tracking. This takes us to the final question. EVM helps provide the basis to assess work progress against a baseline plan, relates technical, time and cost performance, provides data for pro-active management action and provides managers with a summary of effective decision making.

EVM provides more information than normal project tracking. It is a step further by answering the question; Have we got to where we want to be in the project? It helps define more accurately as to where we are in the project as well as calculate its successful completion. The value added approach helps achieve greater visibility and control of the project activities which helps in responding to issues early on, thus making it possible to meet the project timelines. It provides a clear communication of the activities involved and improves project visibility and accountability.

The basic principle of earned value management EVM is that the value of the piece of work is equal to the amount of funds budgeted to complete it. Simple, accessible guidance and certification for working on small and non-complex projects and change initiatives. Modernised Gateway Assurance for the Digital Age. Reinvention of the global standard for assurance in a fast paced and customer centric world.

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