Earned Value (EV)
Earned Value (EV) is the measure of work performed expressed in terms of the budget authorized for that work.
Explanation
Earned Value, formerly known as Budgeted Cost of Work Performed (BCWP), represents the value of work actually completed measured against the planned budget. It is the central metric in EVM because it is compared to both PV (for schedule performance) and AC (for cost performance).
EV is calculated by multiplying the percent complete of each activity by its planned budget. For example, if an activity was budgeted at $10,000 and is 60% complete, the EV is $6,000. EV can never exceed the BAC for the project.
EV must be measured consistently using the rules established in the cost management plan. Common measurement methods include the fixed formula (such as 0/100 or 50/50), weighted milestone, and percent complete. The method chosen should be appropriate for the type of work being measured.
Key Points
- •Formerly known as Budgeted Cost of Work Performed (BCWP)
- •Measures completed work in terms of its authorized budget
- •EV = percent complete multiplied by the budget for that work
- •Can never exceed the Budget at Completion (BAC)
Exam Tip
EV answers: What is the budgeted value of the work actually completed? It is always compared to PV for schedule analysis and to AC for cost analysis.
Frequently Asked Questions
Related Topics
Planned Value (PV)
Planned Value (PV) is the authorized budget assigned to scheduled work, representing the value of work planned to be completed by a given point in time.
Actual Cost (AC)
Actual Cost (AC) is the realized cost incurred for the work performed on an activity during a specific time period.
Cost Variance (CV)
Cost Variance (CV) is an EVM metric that measures cost performance as the difference between earned value and actual cost: CV = EV - AC.
Earned Value Management (EVM)
Earned Value Management (EVM) is a methodology that integrates scope, schedule, and cost data to assess project performance and progress objectively.
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Cost Performance Index (CPI)
Cost Performance Index (CPI) is an EVM efficiency metric that measures cost performance as the ratio of earned value to actual cost: CPI = EV / AC.
Schedule Performance Index (SPI)
Schedule Performance Index (SPI) is an EVM efficiency metric that measures schedule performance as the ratio of earned value to planned value: SPI = EV / PV.
Earned Value Management (EVM)
Earned Value Management (EVM) is a methodology that integrates scope, schedule, and cost data to assess project performance and progress objectively.
Burndown Chart
A Burndown Chart is a graphical representation of work remaining versus time in a Sprint or release, showing whether the team is on track to complete the planned work.
Resource Leveling
Resource leveling is a resource optimization technique in which adjustments are made to the project schedule to keep resource usage at or below a defined limit, often resulting in a longer project duration.
Risk Register
The risk register is a project document that records the details of individual project risks, including their identification, analysis results, response plans, and current status.
Stakeholder Mapping
Stakeholder mapping is the visual representation of stakeholder relationships, influence, interest, or other attributes using grids, matrices, or diagrams to support analysis and engagement planning.
Relative Estimation
Relative Estimation is an agile technique where work items are sized in comparison to each other rather than in absolute units like hours or days, providing faster and more accurate estimates.
Power/Influence Grid
The power/influence grid is a stakeholder classification model that groups stakeholders based on their level of authority (power) and their active involvement or ability to affect the project (influence).
Part of
Cost Management
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