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Earned Value Management
The EVM formulary
Controlling a project is key to the success or failure of the project. Measuring the project performance along the life of the project is a way to provide early warning signals that can be used as triggers for corrective action in case the project is in danger. Earned Value Management (EVM) is a well-known technique to control the time and cost performance of a project. It is a methodology used since the 1960s, when the American Department of Defense proposed a standard method to measure a project's performance. The system relies on a set of often straightforward metrics to measure and evaluate the general health of a project.
These metrics serve as early warning signals to timely detect project problems or to exploit project opportunities. This article gives an overview of the terminology used in EVM and in different articles published on this website. Table 1 provides an overview of the main components of an EVM analysis. Below the table, four collapsible sections can be expanded to access the corresponding resources and links. For an overview of the general EVM approach and references to further articles, see "Earned Value Management: An overview".
Table 1: The different components of Earned Value Management
Earned Value Management Key Parameters
S-curve: This graph displays the Planned Value (PV), the Actual Cost (AC) and Earned Value (EV) along the life of the project.
(Article: "Earned Value Management: The three key metrics")PV curve: This graph displays the Planned Value (PV) as shown in the S-curve. Since the Planned Value curve is available at the construction of the baseline schedule (before the EVM tracking), this graph is accessible separately from the S-curve.
(Article: "Earned Value Management: The project baseline schedule's planned value")Earned Schedule (ES): This graph displays the Earned Schedule (ES) calculated from the Earned Value and Planned Value graph along the life of the project
(Article: "Measuring Time: Earned value or earned schedule?")
Project Performance
EVM Performance Dashboard: This graph displays both the time and cost performance and divides the project performance into four regions showing time and cost performance.
Cost Variance (CV): This graph displays the Cost Variance (CV = EV - AC) along the life of the project.
(Article: "Earned Value Management: Measuring a project's performance")Cost Performance (CPI): This graph displays the Cost Performance Index (CPI = EV / AC) along the life of the project.
(Article: "Earned Value Management: Measuring a project's performance")Schedule Variance (SV and SV(t)): This graph displays the Schedule Variance (SV or SV(t)) along the life of the project. Formulas used: SV = EV - PV and SV(t) = ES - AT
(Article: "Earned Value Management: Reliable time performance measurement")Schedule Performance (SPI and SPI(t)): This graph displays the Schedule Performance Index (SPI or SPI(t)) along the life of the project. Formulas used: SPI = EV / PV and SPI(t) = ES / AT.
(Article: "Earned Value Management: Reliable time performance measurement")Schedule Adherence (p-factor): This graph displays how good the project progress follows the baseline schedule philosophy. This is known as schedule adherence and measured by the p-factor. Tip: p-factor = % schedule adherence (100% = perfect adherence).
(Article: "Earned Value Management: Measuring schedule adherence")
Project Forecasting
- Cost
Estimate At Completion (EAC): This
graph displays the estimated final cost at project completion
(EAC) predicted along the life of the project. Eight forecasting
versions are used, in line with research from literature.
(Article: "Earned Value Management: Forecasting cost") - Time
Estimate At Completion (EAC(t)): This
graph displays the estimated final duration at project completion
(EAC(t)) predicted along the life of the project. Three methods
are used (PVM, EDM and ESM), each using three variants.
(Article: "Earned Value Management: Forecasting time")
Forecast accuracy
- MAPE: This
graph displays the Mean Absolute Percentage Error as a measure of
the forecast accuracy of time or cost predictions.
(Article: "Predicting project performance: Evaluating the forecasting accuracy") - MPE: This
graph displays the Mean Percentage Error as a measure of the
forecast accuracy of time or cost predictions.
(Article: "Predicting project performance: Evaluating the forecasting accuracy")