Earned Value Analysis (EVA) is a method used in project management to measure how well and how far along a project is. It is a way to check if a project is on track, behind schedule, or over budget by keeping track of its progress and comparing it to the plan.
EVA combines the planned value (PV), the real cost (AC), and the earned value (EV) of a project to figure out key performance indicators (KPIs) like cost variance (CV), schedule variance (SV), cost performance index (CPI), and schedule performance index (SPI). (SPI). These key performance indicators (KPIs) help project managers spot possible problems early on so they can fix them and keep the project on track.
EVA uses three key measures to figure out these KPIs:
Planned Value (PV): The planned value is the expected value of the work that, according to the project plan, should have been done up to the current point in time. PV is also called estimated cost of arranged work. (BCWS).
Earned Value (EV): The earned value is a measure of the importance of the work that has been done up to this point. EV is also called the planned cost of work done. (BCWP).
Actual Cost (AC): The actual cost is how much the job has cost so far.
After calculating these measures, the following KPIs can be found:
Cost Variance (CV) is equal to EV minus AC. If the CV is positive, the project is under budget. If the CV is negative, the project is over budget.
Change in the schedule (SV): SV = EV – PV. If the SV is positive, the project is ahead of schedule, and if it is negative, the project is behind schedule.
CPI stands for Cost Performance Index. CPI = EV / AC. If the CPI is more than 1, the project is coming in under budget. If it is less than 1, the project is going over budget.
SPI stands for Schedule Performance Index. SPI = EV / PV. If the SPI value is more than 1, the project is ahead of schedule. If the SPI value is less than 1, the project is behind schedule.
EVA is a useful tool for project managers because it helps them spot possible problems early and take steps to fix them so the project stays on track. It also helps give a more true picture of how the project is going and how well it’s doing, which lets the people involved make better decisions about the project.
