EVM - Earned Value Management

EVM - Earned Value Management

Earned Value Management (EVM) also referred to as earned value, is a technique for the management of cost and schedule.

Planned Value => is the amount of resources, usually stated in terms of dollars, that are expected to be consumed to accomplish a specific piece of work scope.

Actual Cost => is the amount of resources, usually stated in terms of dollars, that were expended in a specified time period to accomplish a specific scope of work.

Earned Value => is a measure of the amount of work accomplished, stated in terms of all or a portion of the budget assigned to that specific scope of work.

Some formula,

Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)

SV % = Schedule Variance (SV) / Planned Value (PV)

Schedule Performance Indicator (SPI) = Earned Value (EV) /Planned Value (PV)

To Complete Schedule Performance Indicator (TSPI) = ( Total Budget - EV ) / ( Total Budget - PV )

Budget At Completion (BAC) = Baselined Effort-hours * Hourly Rate

Estimate At Completion => EAC = AC + ( BAC -EV )

Estimate At Completion => EAC = AC + ETC ( Estimate to complete )

Estimate At Completion => EAC = AC + ( BAC- EV ) / CPI

Variance At Completion => VAC = BAC - EAC

% Completed Planned = PV / BAC

% Completed Actual = AC / EAC

Realistic project estimates using PERT Program Evaluation and Review Technique

I have had several experiences with different managers with respect to estimates.
Some have said this is too high, some have said this is too low, please add lots of buffer. Some took my estimates and doubled it and gave it to their management. :)

So looking at PMBOK is there a good way to arrive at an estimate, yes one of the ways is to use the PERT estimation.

Break down you entire task in to activities and for each activity do the following.

The most pessimistic (P) estimate when everything goes wrong
The most optimistic (O) estimate where everything goes right (past experience doing similar projects can help here)
The most likely (M) estimate given normal problems and opportunities


PERT estimate for an activity = (O + 4M + P)/6

This is also called the weighted average. (Because the most likely estimate is weighed 4 times the other two).

Next time you are asked for an estimate try this & best of all after your activity is completed, try how realistic your estimates were !