Earned Value Analysis
Earned value analysis (EVA) is a data analysis technique that integrates scope, schedule, and cost data to objectively measure project performance and progress against baselines.
Explanation
Earned value analysis is one of the most powerful tools in the project manager's arsenal for measuring project performance. It compares three key values: Planned Value (PV), which represents the authorized budget for scheduled work; Earned Value (EV), which represents the value of work actually completed; and Actual Cost (AC), which represents the money actually spent on the work performed.
From these three values, EVA derives performance metrics including Schedule Variance (SV = EV - PV), Cost Variance (CV = EV - AC), Schedule Performance Index (SPI = EV / PV), and Cost Performance Index (CPI = EV / AC). These metrics enable objective assessment of whether the project is on schedule, within budget, or both. EVA also supports forecasting through Estimate at Completion (EAC) and Estimate to Complete (ETC) calculations.
EVA is most commonly used in the Control Costs and Control Schedule processes but requires proper baseline establishment during planning. It works best on projects where work can be measured in terms of completed deliverables or percentage complete.
Key Points
- •Integrates scope, schedule, and cost into unified performance measurement
- •Core values: PV (Planned Value), EV (Earned Value), AC (Actual Cost)
- •Derives SV, CV, SPI, CPI for performance assessment
- •Supports forecasting with EAC and ETC calculations
Exam Tip
EVA questions are common on both PMP and CAPM. Memorize all the formulas. CPI is the most critical metric because cost performance is hardest to recover once it deteriorates.
Frequently Asked Questions
Related Topics
Variance Analysis
Variance analysis is a data analysis technique that compares actual project performance to the planned baseline to determine the magnitude and cause of deviations.
Trend Analysis
Trend analysis is a data analysis technique that examines project performance data over time to identify patterns and forecast future performance or outcomes.
Cost-Benefit Analysis
Cost-benefit analysis is a data analysis technique that compares the expected costs of an action or decision against its anticipated benefits to determine its financial viability and value.
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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.
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