Earned Value Management (EVM)

A tool to know the current state of a project's progress with regard to its planned budget and schedule.

Budget at Completion (BAC)

The total budget available to the project, which is interpreted as the total value the completion of the project will provide.

Planned Value

The amount of provided value that is supposed to be completed at this point in time.

$PV = (planned\ completion\ \%)\ *\ BAC$

Earned Value (EV)

The actual amount of value provided.

$EV = (actual\ completion\ \%)\ *\ BAC$

• You need to define when and how much of the value is earned when a tasks changes completion status.

Actual Cost (AC)

The total cost actually incurred up to this time. There is no official formula for this but that number should be readily available to your business. It's usually made up from:

• Actual labor costs (e.g. $(hourly\ rate) * (actual\ hours\ spent)$)
• Other expenses

Schedule Performance Index (SPI)

Shows how close the project is to completion.

$SPI = \frac{EV}{PV}$

Higher values are better. 1 means the project is right on schedule.

Cost Performance Index (CPI)

Shows how budget-efficient the project is.

$CPI = \frac{EV}{AC}$

Higher values are better. 1 means the project is right on budget.