Earned Value Management (EVM)
Integrating scope, schedule + cost to objectively measure project performance
Earned Value Management (EVM) is a project-control technique that integrates scope, schedule and cost to give an objective measure of progress and forecast outcomes. It compares three quantities at a data date: Planned Value (PV, budgeted cost of work scheduled), Earned Value (EV, budgeted cost of work actually performed) and Actual Cost (AC, actual cost of that work). From these come Schedule Variance (SV = EV − PV), Cost Variance (CV = EV − AC), and the indices SPI = EV/PV and CPI = EV/AC.
Its power is early, quantified warning: an SPI or CPI below 1.0 flags schedule slippage or cost overrun while there is still time to act, and the Estimate at Completion (EAC ≈ Budget at Completion / CPI) projects the final cost from current performance — far more reliable than comparing spend to budget alone (which ignores how much work was actually done). EVM is standard on large/public infrastructure projects for performance reporting, forecasting and claims substantiation, and depends on a well-structured WBS, a baselined budget and disciplined progress measurement.
- Project cost + schedule performance reporting
- Early variance detection + corrective action
- Forecasting cost/time at completion (EAC/ETC)
- Large/public infrastructure project controls
- Claims + dispute performance substantiation