Earned Value Management (EVM) is used industry-wide and is the most preferred means of reporting project performance.<\/p>\n\n\n\n
Here are a just a few of the most important terms to understand.<\/p>\n\n\n\n
Author detail:<\/strong> Terry O\u2019Dowd at i3Works, BEng RPP CEng FICE FIStructE FAPM With EVM, the following terms and formulas are the most important to keep to hand: <\/p>\n\n\n\n Earned Value (EV) <\/strong><\/p>\n\n\n\n Earned Value is a term that refers to the cost of the work that has \nbeen completed expressed as the value of the performance budget assigned\n to that work. It\u2019s not just the cost of the completing of some work, it\n is representing the value that has been earned by completing the work. \nThis is commonly also referred to in the construction industry as the \n\u201cbudgeted cost of work performed,\u201d or BCWP. Earned Value is calculated \nas the \u2018Budget At Completion\u2019 (BAC) multiplied by the Percentage of Work\n Completed. <\/p>\n\n\n\n EV = BAC x % Complete <\/em><\/p>\n\n\n\n Planned Value (PV) <\/strong><\/p>\n\n\n\n This term refers to the approved budget for work that is scheduled to\n be completed by a certain date in the future. Whereas Earned Value \ntakes a look at how much you spent to get work done by a certain time, \nPlanned Value is proactive in that it looks at how much you should have \nspent to get to a specified date. Planned Value is also referred to as \nBudgeted Cost of Work Scheduled or BCWS. <\/p>\n\n\n\n To find the Planned Value at any point in the project, simply add up \nall your planned costs up to that point. Often, your planned costs are \nreferenced to the project\u2019s baseline. <\/p>\n\n\n\n Actual Cost (AC) <\/strong><\/p>\n\n\n\n Actual Cost is a term used to describe the amount of money that you \nactually spent to get a certain task done by a certain time. Many \nconstruction professionals also call this the \u201cActual Cost of Work \nPerformed,\u201d or ACWP or just AC. <\/p>\n\n\n\n Like Planned Value, Actual Cost is a cumulative value that continues to grow as the project progresses. <\/p>\n\n\n\n Budget at Completion <\/strong><\/p>\n\n\n\n Budget at Completion, also called BAC, is the total amount of money \nthat you\u2019re expecting to spend to finish a particular task or for the \nentire project. You arrive at this number by taking all of the estimates\n that you\u2019ve already established and assumptions that you\u2019ve made about \nthings like schedule and work required and adding them together. <\/p>\n\n\n\n Schedule Variance (SV) <\/strong><\/p>\n\n\n\n Schedule Variance is a number that shows how long you thought a task \nwould take during planning versus how long it actually took and how that\n relates to the money you\u2019re spending. To find this number, begin with \nthe Earned Value of your task and subtract from it the Planned Value. \nThe number you\u2019re left with is the amount of money that delays have cost\n your project so far. <\/p>\n\n\n\n SV = EV \u2013 PV <\/em><\/p>\n\n\n\n Cost Variance (CV) <\/strong><\/p>\n\n\n\n Cost Variance allows you to see the discrepancy between the amount of\n value that you earned on a task and the actual cost that task required \nto perform. To arrive at this number, take the Earned Value and subtract\n it from the Actual Cost. <\/p>\n\n\n\n CV = EV \u2013 AC <\/em><\/p>\n\n\n\n Schedule Performance Index (SPI) <\/strong><\/p>\n\n\n\n Schedule Performance Index allows you to take a closer look at \noverall schedule efficiency on a project. It answers the question \u201cam I \nusing my time wisely?\u201d SPI provides an instantaneous check on schedule \nat any point in the project. To calculate SPI, take the Earned Value of \nyour task or project and divide it by the Planned Value. <\/p>\n\n\n\n SPI = EV \/ PV <\/em><\/p>\n\n\n\n Cost Performance Index (CPI) <\/strong><\/p>\n\n\n\n Cost Performance Index lets you look at not just how much money \nyou\u2019re spending to complete a project, but how well that money is being \nspent. CPI provides an instantaneous check on cost performance at any \npoint in the project. To find this number, take the Earned Value of your\n task or project and divide it by the Actual Cost. <\/p>\n\n\n\n CPI = EV \/ AC <\/em><\/p>\n\n\n\n Estimate at Completion (EAC) <\/strong><\/p>\n\n\n\n Estimate at Completion is important to know because it allows you to \nestimate the total cost of a task today, taking into account the work \nthat you\u2019ve already done. Take the approved budget that you have for the\n entire task and subtract from it the cost variance for all of the work \nthat you\u2019ve done to date. The number you\u2019re left with is your EAC. <\/p>\n\n\n\n EAC = BAC \/ CPI <\/em><\/p>\n\n\n\n Estimate to Complete (ETC) <\/strong><\/p>\n\n\n\n The Estimate to Complete is the number that describes exactly what it\n will take to finish a particular task, accounting for all of the work \nthat you\u2019ve done up to this point. To find this number, take the \nEstimate at Completion and subtract from it the Actual Costs to Date. <\/p>\n\n\n\n ETC = EAC \u2013 AC<\/em><\/p>\n\n\n\n Get to know these core Earned Value Management formulas and keep them handy.<\/p>\n","protected":false},"excerpt":{"rendered":" Earned Value Management (EVM) is used industry-wide and is the most preferred means of reporting project performance. Here are a just a few of the most important terms to understand. Author detail: Terry O\u2019Dowd at i3Works, BEng RPP CEng FICE FIStructE FAPMRegistered Project Professional. Director at i3Works Limited.<\/p>\n","protected":false},"author":1,"featured_media":134,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-70","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"_links":{"self":[{"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/posts\/70"}],"collection":[{"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/comments?post=70"}],"version-history":[{"count":3,"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/posts\/70\/revisions"}],"predecessor-version":[{"id":180,"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/posts\/70\/revisions\/180"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/media\/134"}],"wp:attachment":[{"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/media?parent=70"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/categories?post=70"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.i3works.co.uk\/news\/wp-json\/wp\/v2\/tags?post=70"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Registered Project Professional. Director at i3Works Limited.<\/em><\/p>\n\n\n\n\n\n\n\n