In reality, every project team aims to achieve the goal of a project through the maximization of the resources available for the project in order to achieve a great monetary value from the project. Earned value management is an important tool in project management because it is a vital metric that helps to determine the success of a project.


earned value management system


Earned Value Management System


Earned value management system is a project management technique for measuring the performance and progress of a project. The system combines the measurements of the project management triangle which are the scope, time, and costs.

Earned value management system is an integrated system in project management that allows the project management team to be able to provide an accurate forecast of project performance problems which are a vital contribution to effective project management.

No doubt, project management is all about efficiency and productivity, earned value management system helps project managers to measure the project’s performance in order to have a great value for money. It is a systematic project management process used to find variances in projects based on the comparison of the work executed and planned work. It offers qualitative data for project decision making.

Furthermore, it is used as the positive predictors of the success of a project. It is used in many sectors because of its effectiveness in substantiating contract disputes of a project. The following are the importance of earned value management system:

  • It helps in creating a project plan that identifies the work to be accomplished.
  • It enables the valuation of the planned work.
  • It will pre-define the metrics to quantify the earned value of a project.

The value management process is a technique for defining, maximizing, and achieving value for money. Value management is a tool for exploring the objectives of a project and the expectation of the clients.

Sinnaps is useful as a tool for Earned Value Management; it allows the project team to take advance decisions based on how the project is viewed in terms of the project operation in real time.

What value do our everyday activities have? With Sinnaps you will always have a trusted source at your side, an adviser that lets you know what you are doing well and not so well… 😉



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It is embedded with some indicators on its control panel that will ensure that earned value, actual cost, planned value, cost variance, cost performance index, schedule performance index, and budget at completion are achieved in the project with ease.


Earned Value Project Management Technique


This is a technique used in measuring the actual value of the work-related performance for any particular work components and schedule activities, control accounts, and project. It is a technique that is easily used by the project teams because of its effectiveness in determining the real-time numbers and values based on the amount of work that will be done and required for future performances as well as offering an insight into the amount of work done previously.


Related links…

Importance of Project Management

Functions of Project Management


Planned Value


Planned value is one of the elements of earned value management; it is the approved value of the work to be completed over a period of time. It is the value that should be earned in a work schedule. Also, it is the authorized budget assigned to the work to be done for an activity.

In a project, the planned value can be calculated before the work is done to serve as a baseline; the total planned value for a project is known as the budget at the competition. Planned value is calculated by multiplying the planned percentage of the completed work by the project budget.

Planned value = (completed planned % × budget at completion)

In the (EVMS) earned value management system, there are earned value management (EVM) formulas and metrics which are planned value, earned value, actual cost, schedule variance, cost variance, schedule performance index, and cost performance index.

Actual cost (AC): this is the actual cost incurred for the work completed by the specific date; it is the actual cost of work performed.

Schedule variance (SV): this is the difference between the amounts budgeted for the actual work done and the planned work to be done.

Schedule variance (SV) = Earned value (EV) – Planned value (PV)

Cost variance (CV) = Earned value (EV) – Actual cost (AC)

Schedule performance index (SPI) = Earned value (EV) / Planned value (PV)

Cost performance index (CPI) = Earned value (EV) / Actual cost (AC)



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In labour management system, earned value is the last element of earned value management. Earned value is the value of the actual work completed to date. It will show the value that the project has been able to produce if the project is terminated at any point in time.

The earned value will help the project team to know the value earned from the money spent on a project to date. Earned value can be called budgeted cost of work performed.


How to calculate Earned Value


Earned value is calculated by multiplying the actual percentage of the work completed with the project budget.

Earned value = (% of completed work × budget at completion).

Earned value is a project management tool that makes use of information on cost, schedule, and work performance to create the current status of the project.

Earned value management example is explained below:

An organization XYZ plans to execute a project with a budget of 2000 hours after identifying the activities and the estimated effort for each activity. The organization expects that the whole project will take up to 24 weeks. By the end of 12 weeks, the organization anticipates that 55% of the project would have been completed.

55% of 2000 hours = 1100 hours

By the end of week 12, the organization deduced after a thorough assessment of the actual progress recorded in the project could only worth 700 hours of the total project budget. However, it was found out that the actual expenditure of the completed activities is 960 hours.

In essence, the planned value is 1100 hours, earned value of 700 hours, and the actual cost of 960 hours. In the context of the earned value management system, it can be deduced that the project is behind the schedule and more budget has been expended based on the amount of work executed so far in the project.

Earned value analysis in project management is a method that allows the project manager to measure the amount of work actually performed on a project beyond the basic review of cost and schedule reports. It offers a method that permits the project to be measured by the progress achieved.

Earned value chart is useful in illustrating the schedule performance aspect of earned value management of a project. On the earned value chart, the project team can track the cost and schedule performance by measuring the parameters which are planned value, earned value, and actual cost.

Also, earned value graph is a typical graph that shows the planned value, earned value, and actual cost to enhance proper project management. On the graph, the cost is plotted on the vertical axis while the project’s time is plotted on the horizontal axis. For the MS project, earned value can be calculated at any point during the lifecycle of the project because MS project has every earned value management term inbuilt.

Earned value report is the process of reporting the earned value results of a project to the management and other stakeholders. Earned value report is useful in reporting the small, medium-sized, and large projects. Sinnaps is very effective for reporting the earned value of a project to the relevant stakeholders because of its ease of use.

It will clearly communicate the information in the report to the relevant stakeholders. Also, it will let the project team know if the project is doing well, if the resources are adequate for the project and at the same time reveal the rhythm of the work being done by the project team.

As a tool, the project teams are assured of productivity through optimum utilization of the resources thereby ensuring that they achieve great value for their money.



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