Earned value analysis is the project
management tool that is used to
measure project progress.
It compares the actual work completed at
any time to the original budget and
It forecasts the final budget and schedule
and analyzes the path to get there.
It gives you the essential early warning
signal that things are going awry (wrong).
1.Planned Value (PV)
Planned Value, also known as Budgeted Cost of
Work Scheduled (BCWS), is defined as the amount
of the task that is supposed to have been
It is in monetary terms as a portion of the task
2.Earned Value (EV)
Earned Value, also known as Budgeted Cost of Work
Performed (BCWP), is the amount of the task that is
It is, again, in monetary terms as a portion of the
3. Actual Cost (AC):
The Actual Cost, also known as Actual
Cost of Work Performed (ACWP), as you
might guess, is the actual cost of the
Generally employee hours need to be
converted into a cost, and all project
costs need to be added up, such as the
labour cost, material cost , equipment
1.Schedule Variance (SV)
The Schedule Variance represents the schedule status of
SV = EV – PV
2.Cost Variance (CV)
The Cost Variance represents the cost status of the
CV = EV – AC
SV and CV are the minimum requirement and work well
for small projects, there are other variables that are
derived from them which you might want to calculate:
Other status indicators
Schedule Performance Index (SPI): The
schedule variance expressed in percentage
for example, SPI = 0.8 means the project 20%
SPI = EV / PV
Cost Performance Index (CPI): The cost
variance expressed in percentage terms,
for example, CPI = 0.9 means the project is 10%
CPI = EV / AC
The first two calculations (SV and CV)
give you the basic indicator of project
A negative value indicates an
If the schedule variance (SV) is
negative, you are behind schedule.
If the cost variance (CV) is negative,
you are over budget.
Interpretation of CPI and SPI
You interpret CPI results as below:
CPI less than 1.0 indicates the project is
CPI equals 1.0 than the project is on target.
CPI greater than 1.0 says the project is under
You interpret SPI results as below:
SPI less than 1.0 indicates the project is behind the
SPI equals 1.0 than the project is as per schedule .
SPI greater than 1.0 says the project is ahead the
Que. It was supposed to complete 5 cubic
meter excavation in eight hrs. Review was taken
after 6 hrs., it was expected to complete 75 %
after 6 hrs. but actually work completed is 60 % .
The actual cost spent to complete the work is
Rs.13,000/- assume the cost require to
excavate one cubic meter per hour is Rs.500.
Calculate the different indices and interpret the
Ans: From the given Data:
Task Excavation budget=5 x 500 x 8= Rs.20,000/-
EV=60/100 x 20,000=12,000/-
Interpretation of results
First two indicators:
CV=Cost variance negative it means the
activity excavation is over the budget.
SV= Schedule variance is also negative
indicates that activity excavation is
behind the schedule.
Indicators third and fourth:
SPI is 0.75 (less than 1), indicates that the
excavation is 25 % behind than the
CPI found 0.92(less than 1),indicates its
over budget by 8%.