Earned Value Management (EVM)

Definition

Earned Value Management (EVM) integrates scope, schedule, and cost data to provide an objective measure of project performance. Key metrics: PV (Planned Value = budgeted cost of work scheduled), EV (Earned Value = budgeted cost of work performed), AC (Actual Cost = actual cost of work performed). Variances: SV = EV − PV (schedule), CV = EV − AC (cost). Indices: SPI = EV/PV, CPI = EV/AC. Forecasts: EAC = BAC/CPI (most common), ETC = EAC − AC, TCPI = (BAC − EV)/(BAC − AC).

Related concepts

• Finance Domain
• Schedule Domain
• Integrated Baseline
• Monitoring and Controlling

Exam angle

• Positive vs. negative: CV > 0 = under budget (good); SV > 0 = ahead of schedule (good) — positive variances are favorable
• CPI < 1 = over budget; SPI < 1 = behind schedule — interpret indices the same way: < 1 is bad, > 1 is good
• EAC formula selection: BAC/CPI = assumes past performance continues (most common on exam); AC + (BAC − EV) = assumes remaining work performed at original estimate
• TCPI: the efficiency required to complete within budget — TCPI > 1 means you need to do better than you have been; rarely achievable if CPI is already poor

My notes