Earned Value Management
Learn the basics about one of the best ways to check your project's status.
What is Earned Value Management (EVM)?
Earned Value Management (EVM) is a worldwide known technique, used to track your project status, based on your planning as well as on some standard KPI's widely used in professional project management.
Sinnaps EVM panel tracks each one of this KPI's in real time so you can have a continuous project evaluation.
EV (Earned Value): This is the real value that the project has achieved. It's estimated by calculating the financial cost of the work that has been validated.
AC (Actual Cost): This is the cost of the work that has been performed until a certain date. This includes tasks that have not finished or have not been validated.
PV (Planned Value): This is the monetary cost of the project according to what has been planned.
CV (Cost Variance): This is the cost variation according to what had been planned. EV - AC
CPI (Cost Performance Index): It is the ratio of planned costs for the validated work, to what you actually spent spent for the work you validated. This reflects if the project is ahead or behind in terms of efficiency.
SV (Schedule Variance): This shows you how much ahead or behind in the planning you are. SV= EV-PV
SPI (Schedule Performance Index): The SPI reflects if the project is ahead or behind schedule in terms of efficiency. It is the ratio of the approved budget for the validated work and the planned costs for the planned work. SPI= EV/PV
BAC (Budget at Completion): Estimated and approved total cost planned for the entire project.
CSI (Cost Schedule Index): The ratio of the efficiency in speed and the efficiency in the cost. The further ahead the value is from 1, the project will have more difficulties in recovering. CSI=CPI x SPI
Things you can predict with EVM:
- if you need to increase or reduce your budget in order to achieve your milestones.
- If you need to go faster in task execution to achieve goals.
- If you need to replan your project.
How can EVM help you taking decisions?
Let's say for example that your project is going a bit slower than what you had originally planned. What can lead you to two different scenarios. Either you spent a bit more money to increase resources and speed up, or you can decide to pospone your milestones and project deliveries.
Thanks to the EVM panel, you can now see if you are having big or small deviations in real time. And just as important, regardless if you are spending too much or if you are going too slow, you can monetize both scenarios to see which one is having a bigger effect.
You can also create different scenarios in your project test mode ans see how changes will affect your project EVM
Check this video to have a quick learning on Sinnaps EVM panel