PROJECT MANAGEMENT AND AGILE

What is Earned value management?

A way to measure project progress by comparing planned work, completed work and actual cost.

In plain English

Three numbers drive it: planned value (PV), earned value (EV, the budgeted value of the work actually done) and actual cost (AC). Cost variance is EV minus AC, and schedule variance is EV minus PV. The indexes are CPI = EV / AC and SPI = EV / PV. Above 1 is good, below 1 is a warning.

Example

If you have done work budgeted at $40,000 (EV) but spent $50,000 (AC), CPI is 0.8 and you are over budget.

Where you will meet it

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Related terms

  • Critical path: The longest chain of dependent tasks in a project, which sets the shortest possible project duration.
  • Scope creep: Uncontrolled growth in what a project is expected to deliver.

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