UCL/APM%20Principles%20of%20Project%20Management%20Earned%20Value%20(EV)%20%20Graham%20Collins%20University%20College%20London%20(UCL)

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UCL/APM Principles of Project ManagementEarned
Value (EV)Graham CollinsUniversity College
London (UCL)

• graham.collins_at_ucl.ac.uk

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Example iterative project
Iteration Month Planned Costs
1 1 5000
2 2 8000
3 3 7000
4 4 12000
5 5 14000
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Question
After 5 months, it is found that activities 1-4
have been completed, and that the spend is
36000. Using a measure that simply looked at
spend, the target was to have completed five
activities during this time and therefore the
spend should be 46000
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Calculating Earned Value
Value is earned by the completion of activities
and the budget for each activity is the value it
has earned. In this case it would be the sum of
the budgets for the activities 1-4 ie 32000
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Array of Measures
Actual spend 36000 Planned spend 46000 Earned
value 32000
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cpi
Cost performance indicator earned
value/actual spend 32000/36000 0.889 Es
timated cost at completion original
budget/cpi 46000/0.889 51000
approx (Note that the variance between earned
value and actual is 4000)
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spi
Schedule performance indicator earned
value/planned 32000/46000 0.696 Estimate
d time of completionOriginal time
estimate/spi 5months/0.696 7.2months (No
te variance was 14000 between what was earned
and planned)
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Exercise
Month Planned costs Actual costs iterations
complete 1 50 40 0.5 2 60 50 1.5 3 70 60
2 4 90 90 2.5 5 100 110 3 6 90 70 3.5
The plan was to complete one iteration per month
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Planned in comparison to Actual
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Earned Value in relation to Planned costs and
Actual costs
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Variance
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Exercise
Should variance ie cpi and spi be plotted based
on cumulative figures or per month? Recalculate
based on monthly values
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Variance tracked on a monthly basis
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spi

• Note calculations for spi have used spic or cost.
  In the original example spic was EV/planned
  32/460.696
• Final time to completeoriginal time
  estimate/spic 5 months/0.696 7.2 months
• spit or time is 4/5 (ie 4 months over 5) 0.8
  therefore final time 5months/0.8 6.25 months

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Further reading
Agile Iterative Development A Managers
guideCraig Larman2004Addison-Wesley(Agile
Software Development Series)ISBN 0-13-111155-8