UNDERSTAND THE CONCEPT
Earned value expresses completed work in terms of its approved budget. Planned value is the budget for work scheduled by the reporting date, while actual cost is the cost incurred for work performed. Comparing these three measures helps distinguish spending from progress. Earned value is not revenue, cash received or an invoice total. Progress rules should be agreed in advance and supported by evidence such as accepted quantities or completed milestones.
Cost variance equals earned value minus actual cost; schedule variance equals earned value minus planned value. Negative results indicate unfavorable performance against the baseline on those measures. Schedule variance is expressed in budget units, not days, so use network scheduling to understand completion impacts. Keep scope, progress and costs aligned to the same cutoff. Late invoices or optimistic percentage-complete estimates can make performance look better than it is. Investigate causes before projecting the same performance into the remaining work.
Questions to take back to your team
- What evidence supports the progress credited this period?
- Do planned value, earned value and actual cost share a cutoff?
- Has the schedule network been checked alongside the value metrics?
Further reading
Explore the primary references below. Requirements and applicability depend on your organization and jurisdiction.
