This tool calculates the indicators of earned value management (EVM), which manages a project's progress and cost on the same monetary scale. Enter the value of the work planned, the value of the work actually finished and the cost actually incurred to see whether the project is behind schedule, over budget, and how much it is likely to cost in the end.
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EAC (both CPI and SPI have an effect: AC + (BAC − EV) ÷ (CPI × SPI))
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Estimate to complete ETC = EAC − AC
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Variance at completion VAC = BAC − EAC
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Efficiency needed to finish within budget TCPI
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ETC and VAC are based on the EAC for the case where the current cost efficiency continues (BAC ÷ CPI). TCPI = (BAC − EV) ÷ (BAC − AC) is the efficiency at which the remaining work would finish within budget. The chart is simplified: the plan is drawn as a line through the current PV, and the forecast as a straight line.
See it as a graph
Other inputs stay at their current values while the chosen input varies from 1/4 to 4 times its current value. The red dot is the current value.
What is earned value management?
Earned value management (EVM) is a technique that converts the progress of a project's work into money so that schedule and cost can be managed on the same scale. The budget of the work that was planned to be finished by now is called the planned value (PV), the budget of the work actually finished is the earned value (EV), and the cost actually incurred is the actual cost (AC). Looking only at the percentage complete or only at spending does not tell you whether the project is late or inefficient, but comparing these three values tells you both.
Variances and performance indices
A negative schedule variance SV = EV − PV means the work is behind schedule. A negative cost variance CV = EV − AC means more has been spent than the budget for the work finished. Expressed as ratios, these are the schedule performance index SPI = EV ÷ PV and the cost performance index CPI = EV ÷ AC; values below 1 mean delay and overrun. In the example "Behind schedule and over budget", PV is 500, EV 400 and AC 450, so SV = −100, CV = −50, SPI = 0.8 and CPI ≈ 0.89.
Estimating the total cost at completion
The formula for the estimate at completion (EAC) depends on how efficiently the remaining work is expected to proceed. If the current cost efficiency is expected to continue, EAC = BAC ÷ CPI; if the overrun so far is considered temporary and the rest is expected to go on budget, EAC = AC + (BAC − EV). If catching up on the schedule is also expected to cost money, both CPI and SPI are used. In the example, with a BAC of 1000, the EAC is 1125 if the current efficiency continues, so an overrun of 125 is expected.
Points to note
How reliable the EVM values are depends on how the work is divided (the WBS) and how earned value is measured. Because it is hard to judge that a task is "half done" partway through, rules such as counting a task as 50% when started and 100% when finished (the 50/50 rule) are used. Also, SPI always approaches 1 at the end of a project, so late in the project, schedule decisions should be made together with the critical path.
AIt is behind schedule (SPI = 0.75) and over budget (CPI = 0.8)
BIt is behind schedule (SPI = 0.75) but within budget (CPI = 1.25)
CIt is ahead of schedule (SPI = 1.33) but over budget (CPI = 0.8)
Show answer and explanation
Answer: A. It is behind schedule (SPI = 0.75) and over budget (CPI = 0.8)
The schedule performance index is SPI = EV ÷ PV = 6 ÷ 8 = 0.75, which is less than 1, so the project is behind schedule (schedule variance SV = EV − PV = −¥2 million). The cost performance index is CPI = EV ÷ AC = 6 ÷ 7.5 = 0.8, which is less than 1, so more has been spent than the budget for the completed work (cost variance CV = EV − AC = −¥1.5 million). In EVM, comparing the earned value (EV) with both the planned value (PV) and the actual cost (AC) evaluates progress and cost on the same monetary scale.
The cost performance index is CPI = EV ÷ AC = 4.8 ÷ 6 = 0.8, meaning that each yen's worth of budgeted work costs 1.25 yen. If this efficiency continues, EAC = BAC ÷ CPI = 12 ÷ 0.8 = ¥15 million, which is expected to exceed the budget by ¥3 million. ¥13.2 million is AC + (BAC − EV), assuming the remaining work (BAC − EV = ¥7.2 million) proceeds on budget. ¥17.25 million is AC + (BAC − EV) ÷ (CPI × SPI) = 6 + 7.2 ÷ 0.64 (in millions of yen), assuming both the cost and schedule efficiencies affect the remaining work.
FAQ
Which matters more, SPI or CPI?
Both are important, but CPI is known to be hard to recover once it has worsened, which makes it useful for estimating a budget overrun at completion early. SPI shows the delay over the whole project, but whether the delayed work is on the critical path must be checked against the schedule.
What units are PV, EV and AC in?
Usually money, but they are sometimes managed in effort (such as person-days). As long as the three values and BAC use the same unit, the calculation is the same.
Can a project be over budget even when EV is larger than PV?
Yes. Even if more work than planned has been finished (SPI > 1), the project is over budget if even more has been spent (AC > EV, CPI < 1). Schedule and cost are judged separately.
How does this appear in exams?
Japan's Applied Information Technology Engineer Examination and Project Manager Examination often ask you to judge schedule delays or cost overruns from PV, EV and AC values or charts, and to calculate the estimate at completion.