Earned Value Anal sis
Cheat Sheet
Everything you need to know about Earned Value Analysis
--
"Once you’re 20% into
a project, your current
performance can be
used to predict the
future of the project
with a plus or minus
10% deviation.
Fleming and Koppelman
--
About The Author
am an experienced R CS chartered Quantity Surveyor
with first-hand experience of how the consistent capture
and analysis of data can transform global project
delivery.
After 8 years in the rail industry struggling with paper
records and lacking the detail needed to effectively
manage project tenders and budgets, knew that there
was a better way.
n 2017 founded Raildiary. We are the market leader in
the capture and analysis of site data in the UK rail
industry.
Our market-leading digital site diary can help you get paid
for 100% of your work, deliver projects on schedule and
highlight inefficiencies for future savings.
We aim to do in seconds what currently takes hours, days
and weeks.
W a D e - MR CS
CEO Ra d a
--
Ea ed Va e A a C ea S ee
Budgeted Cost of Actual Cost of Work
Work Scheduled Performed
BC S=%C (P ) AC
P B
.
Budgeted Cost of Cost Variance
Work Performed CV = EV - AC = BC P AC P
B P CV = U
N CV = O
.A V
Schedule Variance Schedule
SV = EV PV = BC P BC S Performance Inde
P SV: I SPI = EV / PV = BC P / BC S
SPI 1:
N SV: I
SPI 1:
Cost Performance Cost Schedule Inde
Inde CSI = CPI SPI
CPI = EV /AC = BC P / AC P T CSI 1.0,
CPI 1:
/ .
CPI 1:
--
10 Ea ed Va e A a
E e a
EVA E V A
,
.
I ;
1. M
2. F
3. U
V ,
10 E
V A :
/
10 Earned Value Analysis Essentials
1. W a e e EVA?
According to a detailed study by Fleming and Koppelman, once you’re 20% into a project, your
current performance can be used to predict the future of the project with a plus or minus 10%
deviation.
Earned value analysis builds on this to compare the planned work with what has actually been
completed to determine if cost, schedule and work accomplished are progressing as planned.
2. BCWS - B d e ed C W Sc ed ed
Budgeted Cost of Work Scheduled (BCWS), also called the Planned Value (PV), is the sum of the
budget for all work scheduled to be accomplished with a given time period. t also includes the cost
of previous work completed and can address a specific period of performance or a date in time.
BCWS = % Complete (Planned) x Project Budget
A Contractor usually reports the Budgeted Cost or Work Performed (BCWP) on all work packages
completed for a project. The BCWP is then compared to BCWS to determine if the project is behind
or ahead of where it’s projected to be. f the contractor has not completed all the scheduled work
packages on time, then the BCWP will be less than the BCWS.
W E a
PV = T a *% a
E a 10 100,000.
PV = 100,000
PV a 2 = 100,000 * 20% = $20,000
PV a a b a a a , 3-6 = 100,000 * 40% = 40,000.
/
3. ACWP - Ac a C W Pe ed
The Project Management nstitute defined Actual Cost of Work Performed as “the realised cost
incurred for the work performed during a specific time period”.
The ACWP is reported by the contractor’s accounting system in accordance with generally accepted
accounting procedures and is simply stated actuals are actuals.
ACWP can be considered both cumulatively or for a given period of time.
The difference between the BCWP and the ACWP is the Cost Variance (CV).
W E a
A ACWP AC = 70,000
4. BCWP - B d e ed C W Pe ed
The budgeted Cost of Work Performed (BCWP) is the budgeted cost of the value of work that has
actually been completed to date.
Otherwise known as the Earned Value (EV).
Contractors usually report the BCWP on individual packages within a project and compare it to
Budgeted Cost of Work Scheduled (BCWS) to understand if a project or package is being or ahead of
where it was projected to be .
f the contractor has not completed all the scheduled work packages on time, then the BCWP will be
less than the BCWS.
W E a
BWCP EV = T a P *% a a = 100,000 * 55% = 55,000.
/
5. SV - Sc ed e Va a ce (BCWP-BCWS)
Schedule Variance (SV) indicates how much ahead or behind schedule the project is. t measures
whether a project is on track by calculating actual progress against expected progress
Schedule Variance can be calculated using the following formula:
Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV)
Schedule Variance (SV) = BCWP – BCWS
This variance indicates how much cost of the work is yet to be completed as per schedule or how
much cost of work has been completed over and above the scheduled cost.
Positive Schedule Variance: ndicates we are ahead of schedule
Negative Schedule Variance: ndicates we are behind schedule
W E a
SV = BCWP - BCWS
SV = 55,000 - 60,000
SV = - 5000
SV% = SV / BCWS
T a a 8% b .
6. CV - C Va a ce (BCWP-ACWP)
Cost Variance (CV) indicates how much over or under budget the project is.
t is used to track expense line items, but can also be tracked at the project level, as long as there is a
budget allocated to the item.
Cost Variance can be calculated using the following formulas:
Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC)
Cost Variance (CV) = BCWP – ACWP
Positive = indicates how much under budget the project
Negative = indicates how much over budget the project
W E a
CV = EV AC
CV a 6 = 55,000 70,000 = - 15,000
CV% = (CV/EV) *100 = (- 15000/ 55,000) *100 = -27%
T a a 27% b .
/
7. SP - Sc ed e Pe a ce de
SP reviews the project performance from a schedule perspective and can be calculated using the
following formula:
SP = Earned Value (EV) / Planned Value (PV)
SP = BCWP / BCWS
SP value greater than (≥) 1: indicates the project team is very efficient in utilising the time allocated
to the project
SP value less than (≤) 1: indicates the project team is less efficient in utilising the time allocated to
the project
W E a
SP = BCWP / BCWS
SP = 55,000 / 60000
SP = 0.92
T a a 92% a a a 8% b .
8. CP - C Pe a ce de
Cost Performance ndicator can be calculated as using the following formulas:
CP = Earned Value (EV) /Actual Cost (AC)
CP = BCWP / ACWP
CP is an index showing the efficiency of the utilisation of the resources on the project.
Greater than (≥) 1 indicates efficiency in utilising the resources allocated to the project is good.
Less than (≤) 1: indicates efficiency in utilising the resources allocated to the project is not good.
W E a
CP = BCWP / ACWP
CP = 55,000 / 70,000
CP = 0.79
0.79 a a a 79% a .
/
9. CS - C Sc ed e de
f a project is slipping on programme or likely to over spend then the Cost Schedule ndex is a
valuable measurement to consider. t measures the project’s overall efficiency and indicates how
likely a project that’s deviating from baselines is to recover.
t’s calculated as:
Cost Schedule ndex (CS ) = Cost Performance ndex (CP ) x Schedule Performance ndex (SP )
The farther the CS is from 1.0, the more unlikely a project that is late and/or over budget is to
recover.
W E a
CS = CP * SP
CS = 0.79 * 0.92
CS = 0.72
10. EAC - E a ea C e
Estimate at completion is the forecasted cost of the project, as the project progresses. There are a
number of different ways to determine the EAC.
The most common way to determine EAC is a “bottom-up” approach where the actual costs (AC) are
added to the forecasted remaining – the estimate to complete (ETC).
EAC = Actual costs (AC) + estimate to complete (ETC)
Alternatively, if the project has recurring variances then the following formula is recommended:
EAC = Budget at Completion (BAC) ÷ Cost Performance ndex (CP )
--
Book A Consultation
f you want to automate the capture and
analysis of this essential industry data, then
find out how in a 1-1 consultation with our
product experts.
BOOK OUR CONSULTATION
