What is Earned Value Management?

Earned Value Management (EVM) is a project management methodology that allows for an objective assessment of progress and work performance. It combines three key indicators:

• Planned Value (PV) — the amount of work scheduled to be completed by the current moment, expressed in monetary terms.
• Actual Cost (AC) — the actual amount of money spent on the work performed.
• Earned Value (EV) — the value of work actually performed according to the plan, expressed in monetary terms.

Using these data, indicators such as the Cost Performance Index (CPI) and Schedule Performance Index (SPI) are calculated, which help understand whether the project is within budget and schedule.

Example calculation:

PV = 100,000 rubles (plan at the current moment)
AC = 90,000 rubles (actual expenses)
EV = 80,000 rubles (value of work performed)

CPI = EV / AC = 80,000 / 90,000 = 0.89 (costs are higher than planned)
SPI = EV / PV = 80,000 / 100,000 = 0.8 (delay in schedule)

Thus, EVM helps managers make informed decisions for project adjustments.