Track cost and schedule with EVM

Marking tasks complete tells you what is done. Earned Value Management (EVM) tells you whether that progress is on schedule and on budget, in one currency. Every Owl project has an Earned Value dashboard that turns your baseline, your costs and your progress into the standard measures of the PMBOK Guide (PMI, 6th edition, §7.4.2.2), worked out the way Oracle Primavera P6 works them out, so the numbers match what a P6 user sees.

Note: EVM needs three things. A baseline: the plan of record measured against (set one in Schedule history). Costs: assignments with a rate (the assignment's own, or its resource's hourly rate) or expenses on activities. Progress: % complete on the activities, as of a data date. Without a baseline, BAC, PV and EV are blank, and so is everything worked out from them.

Open the dashboard

Under Dashboards in the project tree, open Earned Value. Every number is as of the project's data date: set it in the project's scheduling settings, or bring it in with a schedule update.

The dashboard has six parts: two rows of figures, the PV, EV and AC curve, SPI and CPI over time, Cost by WBS and Cash flow. Each reads the project's cost and earned value columns, which you can add to the grid to see the same numbers activity by activity.

If your project doesn't have a cost dashboard yet, ask for one:

Ask Owl
Make an EVM dashboard: budget at completion, actual cost and budget spent as figures, a cost S-curve against the baseline, and budget by WBS and by resource.

The numbers, one by one

The four base measures, all in money:

  • BAC, Budget at Completion = the baseline's budgeted cost: each activity's assignments (units × rate) and expenses, as the baseline has them. Not today's budget: a budget raised since the baseline doesn't move BAC.
  • PV, Planned Value = the baseline's budget, spread over the baseline's dates (on each assignment's curve, each expense by its accrual), added up to the data date. It is not BAC × schedule %: a front-loaded crew plans more value early.
  • EV, Earned Value = the baseline budget of the work done: each activity's baseline resource budget × its performance % complete, plus each baseline expense by its accrual: one that accrues at the start is earned in full as soon as the activity's performance % is above 0; one at the end earns nothing until 100 %; a uniform one earns its share.
  • AC, Actual Cost = what has been spent to the data date: actual units × rate on every assignment (labor, nonlabor and material) and the expenses' actual cost.

Performance % complete is the activity's % complete, P6's default technique (activity % complete). To earn by 0/100 (nothing until complete) or 50/50 (half once started), point the Performance % complete column at Performance % (0/100) or Performance % (50/50).

The variances, in money:

  • SV, Schedule Variance = EV − PV. Negative means behind.
  • CV, Cost Variance = EV − AC. Negative means over budget.

The indices, where 1.00 is on plan:

  • SPI, Schedule Performance Index = EV ÷ PV. Below 1 is behind.
  • CPI, Cost Performance Index = EV ÷ AC. Below 1 is over budget: a CPI of 0.80 earns 80 cents of work for each dollar spent.

The dashboard shows SPI, CPI and the variances in red when they say behind or over.

The forecast:

  • ETC, Estimate to Complete = (BAC − EV) ÷ CPI: the work left, at the cost efficiency so far. This is PMBOK's "typical" case and P6's default technique (performance factor 1 ÷ CPI). While nothing has been spent (CPI is 0) it is BAC − EV; once an activity is complete it is 0.
  • EAC, Estimate at Completion = AC + ETC, which is BAC ÷ CPI.
  • VAC, Variance at Completion = BAC − EAC. Negative means forecast to overrun.
  • TCPI, To-Complete Performance Index = (BAC − EV) ÷ (BAC − AC): the cost efficiency the remaining work needs to finish on budget. Well above CPI means the budget is out of reach. P6's TCPI is PMBOK's other form, against the estimate, (BAC − EV) ÷ (EAC − AC): the TCPI (EAC) column.

Other ETC techniques are columns too: ETC (remaining cost) (the bottom-up estimate), ETC (CPI × SPI) and ETC (atypical) (BAC − EV). Point Estimate to complete (ETC) at one to use it everywhere.

Earned schedule, in time rather than money:

  • ES, Earned Schedule: the day by which the baseline planned to have earned what has been earned so far: the last day the baseline planned work on whose running PV, by the day's end, is at most EV. Blank while nothing is earned.
  • SV(t) = ES − data date, in working days, counting ES's day as earned. Negative means behind, by that many days.
  • SPI(t) = the working time from the baseline start to the end of ES's day ÷ the working time from the baseline start to the data date.

Unlike SPI, which drifts back to 1.0 as a late job finishes (everything is eventually earned), SPI(t) keeps saying how late it is.

Zero is zero. A ratio whose denominator is 0 is shown as 0, as P6 shows it: an activity with no planned value yet has SPI 0, not "infinite".

Totals are sums; ratios are ratios of the sums. The project's and each WBS row's BAC, PV, EV, AC, ETC and EAC add up their activities (the figures are those sums, as P6's project totals are); its SPI is ΣEV ÷ ΣPV, never an average of the activities' SPIs. The project's own columns are only the ratios and earned schedule; in a formula a total is SUM(Tasks[BAC]).

How to read it: the indices say the direction (above or below 1?), the variances the size (by how much?), and SV(t) the delay in days.

PV, EV and AC

The curve plots the three running totals by month:

  • Planned value: the baseline's budget curve, rising to BAC.
  • Earned value and actual cost, up to the data date. Each schedule update adds what it earned and spent between it and the update before, so a month already reported never moves when a later estimate changes.
  • Forecast: actual cost where it was spent, then the remaining cost where it is planned: where the job is heading past the data date.

At the data date, EV below PV is the schedule gap (SV); AC above EV is the overrun (CV).

SPI and CPI

The two indices month by month, from the running totals, against a line at 1.0. A line drifting down over successive updates is performance eroding, more telling than any single figure.

Cost by WBS

Each top-level area's at completion cost (actual + remaining), with the baseline's budget ticked beside it: the areas whose forecast runs past their tick are driving the overrun.

Cash flow

Budget, forecast and actual cost per month. Budget is the current budget spread over the activities' dates; forecast is the actuals where they were spent and the remaining cost where it is planned; actual stops at the data date.

What P6 users should know

  • Remaining work spreads from the remaining early start, the data date or later where logic holds it back, as P6 spreads it. On a curved assignment the curve is laid over the whole activity and the part after the remaining start carries the remaining units.
  • Actual cost over time reads your schedule history (what each update added). P6's own spread, evenly from the actual start to the data date, is the Actual cost over time (P6) column; with one update the two agree.
  • Variances use P6's sign: baseline − current, in working days of the activity's calendar.
  • Planned start (P6) and Planned finish (P6) are P6's frozen planned dates: the start as of the last update before the actual start, and that plus the duration. Budgeted cost over time (P6) spreads the budget on them.

What to do next