Search Your Query..

Custom Search

Earned Value Analysis Project Management Professional

Planned value (PV, also known as BCWS) Budgeted cost of work scheduled. This is what most of us understand as our budget. It is the estimated cost of what you thought it would take to get the task or project done. This may be reported on the task itself or for the entire project.

Actual cost (AC, also known as ACWP) Actual cost of work performed. This is what most of us think of as actuals. It is the cost incurred up to a particular point in time of the project. You capture this from labor performed, and include expenses if they have been applied. Again, you can report this on the task or project level.

Earned value (EV, also known as BCWP) This is the value of a task or project applied at a particular time. The work accomplished is worth something even if it is not completely done. Note that you have to initially establish how you are going to measure earned value. Some organizations decide work does not have a value until it is 20 or 50 percent done and it would have an earned value of zero until it is at least 20 percent or 50 percent done. Some have decided it needs to be 100 percent done before value can be applied.

The following formulas are what you will use to calculate variances and forecast completions using planned value, actual cost, and earned value.

Cost variance (CV) This formula tells you if costs are higher or lower than budgeted. The formula is CV = EV – AC. For instance, if the earned value for the documentation project is $1,605 (the outline and some writing have some earned value as of the status date), and the actual costs are $2,120 on the status date, the CV is <$515>. If the cost variance is a negative number (as shown with the angle brackets <>), the project is over budget. If it is a positive number, the project is under budget. Zero is right on target.

Schedule variance (SV) This formula tells us if the project schedule is behind or ahead of its estimate. The formula is SV = EV – PV. For instance if the earned value for the documentation project is $1,605, and the planned value is $1,550, the SV is $55. If the schedule variance is a negative number, the project is behind schedule. If it is a positive number, the project is ahead of schedule. Zero is right on target.