Quick Definition:
Earned Value Management (EVM) is a project management technique that measures project performance and progress in an objective manner by combining scope, schedule, and resource measurements.
Key EVM Metrics
To master EVM, you must understand these three fundamental values:
- Planned Value (PV): The authorized budget assigned to scheduled work.
- Actual Cost (AC): The realized cost incurred for the work performed.
- Earned Value (EV): The measure of work performed expressed in terms of the budget authorized for that work.
Performance Indexes
Use these indexes to determine project health:
- Cost Performance Index (CPI): EV / AC. If > 1, you are under budget.
- Schedule Performance Index (SPI): EV / PV. If > 1, you are ahead of schedule.
