Earned Value.txt

• BAC - Budgeted At Completion
• PV - Planned Value
• EV - Earned Value
• AC - Actual Cost
• CV - Cost Variance
• SV - Schedule Variance
• CPI - Cost Performance Index
• CPIC - Cumulative Cost Performance Index
• SPI - Schedule Performance Index
• EAC - Estimate At Completion
• ETC - Estimate To Completion
• VAC - Variance At Completion
• TCPI - To-Complete Performance Index

• Budgeted At Completion
• How much we originally expected this project to cost

• Planned Value
• aka Budgeted Cost of Work Scheduled (BCWS)
• PV = % of planned time burned * BAC

• Earned Value
• aka Budgeted Cost of Work Performed (BCWP)
• EV = % of actual functionality delivered * BAC

• Actual Cost
• aka Actual Cost of Work Performed
• AC = Actual expenditure to date

• Cost Variance
• How much actual cost differs from planned costs
• CV = EV - AC

Good. We're doing better than planned.

Bad. We're doing worse than planned.

CV = EV - AC. Use AC because it represents actuals whereas PV represents plan. We want ACTUAL cost variance. Using PV would yield Schedule Variance.

• Schedule Variance
• How much our schedule differs from the plan
• SV = EV-PV

Good. We're ahead of schedule.

Bad. We're behind schedule.

• Cost Performance Index
• Indicates how much VALUE we're actually getting for every dollar we expected
• CPI = EV / AC

Good - we're getting the precise value for each dollar we planned.

Good - we're getting greater value for each dollar than we planned.

Bad - we're getting less value for each dollar than we planned.

• Schedule performance Index
• Indicates how FAST the project is progressing vs the plan
• SPI = EV / PV

Good - we're performing at precisly the speed we planned.

Good - we're performing FASTER than we planned

Bad - we're performing SLOWER than we planned

• Estimate at Completion
• What do we expect the project to cost base on where we are on cost & schedule
• EAC = BAC / CPI

• Estimate To Completion (not estimate to COMPLETE)
• How much more we expect to spend from this point forward
• ETC = EAC - AC

• Variance At Completion
• Difference between what we originally planned and what we NOW expect to spend on the project
• VAC = BAC - EAC

Good - we now expect to spend less than we originally planned

Bad - we now expect to spend MORE than we originally planned

• Cumulative Cost Performance Index
• CPI = EV / AC. If EV and AC are measured at regular intervals, CPIC is cumulative EV / cumulative AC.

CPI gives a good snapshot of a particular period (assuming EV and AC represent only a period measurement). CPIC represents the longterm health of the project and is a good indicator of performance at completion.

• To-Complete Performance Index
• Performance which must be achieved to meet financial goals
• TCPI = (BAC - EV) / Remaining Funds

Good - we have to perform exactly as we planned to meet our budget

BAD - we have to perform MORE efficiently than we planned to meet our budget

GOOD - we can perform LESS efficiently than we planned and still meet our budget

• Fixed
• Variable
• Direct
• Indirect
• Sunk