Earned Value in Project Management

Earned Value (EV) is a significant Key Performance Indicator (KPI) in Project Management. It measures the value of work actually completed compared to the original budget.

Earned Value is essential for tracking the project's progress, assessing performance, and predicting future outcomes. It allows project managers to identify any deviations from the plan and take corrective actions.

Calculation of Earned Value

Earned Value is calculated by multiplying the planned percentage of completion at a given point in time by the total budget for the project.

Here's a conceptual representation:

Earned Value = % of Planned Completion * Total Project Budget

In this formula:

• % of Planned Completion is the percentage of the project planned to be completed by a certain point in time.
• Total Project Budget is the overall budget allocated for the project.

By calculating and monitoring Earned Value, project managers can compare the earned value to the actual cost and planned value, providing a comprehensive view of project performance and a basis for forecasting project results. It is a core component of the Earned Value Management (EVM) methodology, a best practice for project management.