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Earned Value Analysis

What is the Earned Value Analysis? Definition and meaning

The Earned Value Analysis (EVA for short, also known as earned value management) is a controlling instrument for calculating the completion value (= earned value) of a project. Based on planned and actual data, key figures are calculated that represent the project progress. This is based on cost, time and scope, and it provides information about the efficiency and the expected completion of the project.

The method originally comes from the US Department of Defense, which is why the terms used in the Earned Value Analysis are borrowed from English. Its core idea: a few figures produce meaningful key figures that show whether a project is within its time and cost budget.

projectfacts supports you with the Earned Value Analysis fully automatically. There you will also find the formulas, the calculation and a worked example.

Completion value and planned value as basic figures

The completion value (earned value, EV) indicates the value that a project team has already delivered by a certain point in time. It is the central figure of the analysis and allows an outlook on the expected completion of the project.

The planned value (planned cost, PV) describes how much of the budget should have been used at a given point in time according to plan. The actual cost (AC), by contrast, sums up all the costs that have actually been incurred. The further key figures of the Earned Value Analysis result from the relationship between these three basic figures.

The key figures SPI and CPI explained briefly

Two central efficiency key figures are derived from the basic figures:

  • Time efficiency (Schedule Performance Index, SPI): it shows whether a project is progressing faster or slower than planned. A value above one means a lead, a value below one a delay.
  • Cost efficiency (Cost Performance Index, CPI): it shows whether the work delivered was more expensive or cheaper than planned. Above one stands for cost savings, below one for additional cost.

You will find the exact formulas for SPI and CPI as well as a worked example on the page about the Earned Value Analysis.

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Frequently asked questions

What does the Earned Value Analysis calculate?
The Earned Value Analysis calculates the completion value, the earned value, of a project. From planned and actual data it derives key figures that reflect project progress in terms of cost, time and scope.
What does the Earned Value Analysis tell you?
It provides information about the efficiency of a project and its expected completion. With the Earned Value Analysis from projectfacts, this evaluation runs fully automatically.
What is project progress based on in the Earned Value Analysis?
Project progress is based on the three dimensions of cost, time and scope. The key figures of the analysis result from comparing planned and actual values.
What is the difference between earned value and planned value?
The planned value (planned cost) indicates how much of the budget should have been used at a given point in time according to plan. The earned value (completion value) indicates the value that has actually been delivered by that point. Comparing the two figures shows whether a project is on schedule.
What do the key figures SPI and CPI tell you?
The Schedule Performance Index (SPI) measures the time efficiency, while the Cost Performance Index (CPI) measures the cost efficiency of a project. Values above one signal a lead, values below one a delay or additional cost. You will find the formulas under Earned Value Analysis.