Definition

Earned value management (EVM) compares planned work (schedule and budget) to actual work performed and actual cost. Key metrics: Planned Value (PV), Earned Value (EV) (value of work actually performed), Actual Cost (AC). From these you get Schedule Variance (SV = EV − PV) and Cost Variance (CV = EV − AC), and indices (CPI, SPI).

Why It Matters

EVM tells you whether you are ahead or behind schedule and over or under budget in a single framework. It is common on larger and federal projects. Contractors use it to spot problems early and to report to owners. It complements POC and WIP by adding schedule and plan vs. actual comparison.

Field Example

At month 3, planned value (what should have been done) = $30,000; earned value (what was actually done) = $27,000; actual cost = $29,000. SV = $27,000 − $30,000 = −$3,000 (behind schedule). CV = $27,000 − $29,000 = −$2,000 (over budget for work done). CPI = EV/AC = 0.93 (cost overrun trend).

Calculation / Formula (if applicable)

SV = EV − PV. CV = EV − AC. SPI = EV ÷ PV (schedule performance index). CPI = EV ÷ AC (cost performance index). EAC (estimate at completion) can be AC + (BAC − EV) ÷ CPI (one common formula).

Software Application

Support planned value (from schedule/budget) and earned value (from POC or physical % complete) by period. Record actual cost. Calculate SV, CV, SPI, CPI by job and period. Report trend and forecast (EAC). Optional: integrate with scheduling tool for PV and EV. Used more on large or government jobs.

Tooltip Version

Earned value management compares what you planned to do and spend to what you actually did and spent, so you see schedule and cost variance in one place.

Earned Value Management