| Earned Value Technique is an excellent way to track | | | | Similarly, Negative schedule variance means that |
| the Project Progress against the Project Plan. | | | | project is behind schedule where as Positive schedule |
| Earned Value Technique is a method of objectively | | | | variance means that project is ahead of schedule. |
| measuring project performance against the Project | | | | The next two parameters i.e. Cost Performance Index |
| baseline. Result from an Earned Value analysis indicate | | | | (CPI) and Schedule Performance Index (SPI) are also |
| deviation of the Project from cost and schedule | | | | quiet important parameters. Their value varies |
| baselines. | | | | between 0 and 1. |
| Baseline means, the first approved Project Schedule. | | | | So, if CPI is say 0.8, it means that we are getting 80 |
| There are various terms used in Earned Value | | | | cent out of every dollar spent in the Project. |
| Techniques. For example, PV, meaning Planned Value, | | | | If, SPI is say 0.9, it means that project is progressing at |
| is the Estimated Value of the Work Planned to be | | | | only 90% of the speed originally planned. The next |
| done. This value is measured in terms of currency, say | | | | parameter is Estimate At Completion. So, at any point |
| dollar. So, if planned value is $340, it was planned to do | | | | of time during the project execution, if it is required to |
| work worth 340 dollars. | | | | know how much the project would actually cost by |
| But, how do you calculate Earned Value? It’s quite | | | | the time its gets completed, just divide the Budget At |
| simple. Just add the budget allocated to each of the | | | | Completion by the Cost Performance Index. |
| activities that have completed at that point in time. The | | | | What is Budget At Completion? It’s just the Budget |
| resulting value is Earned Value at point of time. | | | | of the Total Project. |
| Now that you have gone through the Earned Value | | | | The next parameter is Estimate to Complete, which is |
| Terms, Let’s look at the formulas involved in | | | | how much more would the project cost from this |
| calculating the Earned Value. | | | | point onwards. This is calculated simply by subtracting |
| Here again, all the formulas are listed in the slide along | | | | Actual Cost from the Estimate at Completion. |
| with their explanation. Remember tonote that Negative | | | | Also, Variance at Completion can be calculated by |
| cost variance means that the project is over budget, | | | | subtracting Estimate At Completion from the Budget |
| positive means theproject is under budget. | | | | At Completion. |