*M & C*

# Earned Value analysis

Earned value analysis shows specific mathematical metrics that are designed to reflect the health of the project by integrating scope, schedule, and cost information. Information can be reported for the current reporting period and on a cumulative basis. Earned value analysis can also be used to forecast the total cost of the project at completion or the efficiency required to complete the project for the baseline budget. Information that is generally collected includes:

- Budget at completion (BAC)
- Planned value (PV)
- Earned value (EV)
- Actual cost (AC)
- Schedule variance (SV)
- Cost variance (CV)
- Schedule performance index (SPI)
- Cost performance index (CPI)
- Percent planned
- Percent earned
- Percent spent
- Estimates at completion (EAC)
- To complete performance index (TCPI)

Earned value analysis is an example of a data analysis technique in the *PMBOK*® *Guide *– Sixth Edition. The information can be provided as a standalone report or as part of the project status report. Earned value analysis is conducted at pre-defined intervals throughout the project. It is identified as a technique in these processes:

- 5 Monitor and Control Project Work
- 6 Control Schedule
- 4 Control Costs
- 3 Control Procurements

**Tailoring Tips**

Consider the following tips to help tailor earned value analysis to meet your needs:

- The earned value analysis can be done at the control account and/or project level depending on your needs.
- You may want to add a field that indicates the implications of continued This can include a forecast based on a trend analysis or based on identified responses.
- Several different equations can be used to calculate the EAC depending on whether the remaining work will be completed at the budgeted rate or at the current Two options are presented on this form.
- There are options to calculate a TCPI. Use the information from your project to determine the best approach for reporting.
- You may want to add information that indicates the implications of continued schedule This can include a schedule forecast using SPI as the basis for a trend analysis or based on analyzing the critical path.
- Some organizations are starting to embrace earned schedule metrics. You can update this form to include various earned schedule calculations in addition to a critical path analysis.
- In addition to tailoring the content of the earned value analysis, you can tailor the Many PMOs have reporting software that transforms the data into dashboards, control charts, S-curves, or other representations.

**Alignment**

Earned value analysis should be aligned and consistent with the following documents:

- Project status report
- Project schedule
- Project budget
- Variance analysis
- Contractor status report

Document element |
Description |

Planned value | Enter the value of the work planned to be accomplished. |

Earned value | Enter the value of the work actually accomplished. |

Actual cost | Enter the cost for the work accomplished. |

Schedule variance | Calculate the schedule variance by subtracting the planned value from the earned value. SV = EV – PV |

Cost variance | Calculate the cost variance by subtracting the actual cost from the earned value. CV = EV – AC |

Schedule performance index | Calculate the schedule performance index by dividing earned value by the planned value. SPI = EV/PV |

Cost performance index | Calculate the cost performance index by dividing the earned value by the actual cost. CPI = EV/AC |

Root cause of schedule variance | Identify the root cause of the schedule variance. |

Schedule impact | Describe the impact on deliverables, milestones, or critical path. Root cause of cost variance Identify the root cause of the cost variance. |

Budget impact | Describe the impact on the project budget, contingency funds and reserves, and any intended actions to address the variance. |

Percent planned | Indicate the cumulative percent of the work planned to be accomplished. PV/BAC |

Percent earned | Indicate the cumulative percent of work that has been accomplished. EV/BAC |

Percent spent | Indicate the total costs spent to accomplish the work. AC/BAC |

Estimates at completion | Determine an appropriate method to forecast the total expenditures at the project com- pletion. Calculate the forecast and justify the reason for selecting the particular estimate at completion. For example: If the CPI is expected to remain the same for the remainder of the project: EAC = BAC/CPI If both the CPI and SPI will influence the remaining work: EAC = AC + [(BAC – EV)/(CPI× SPI)] |

To complete performance index | Calculate the work remaining divided by the funds remaining. TCPI = (BAC – EV)/(BAC – AC) to complete on plan, or TCPI = (BAC – EV)/(EAC – AC) to complete the current EAC. |