Earned Value Analysis: Planned Value (PV), Earned Value (EV), Cost Variance (CV), Schedule Variance (SV)

Earned Value Analysis is a project control technique used to measure project performance in terms of cost and time. It compares planned work, actual work completed, and actual cost spent. This method helps managers understand whether the project is on schedule and within budget.

Earned Value Analysis uses three main elements: Planned Value, Earned Value, and Actual Cost. By comparing these values, managers can identify cost variance and schedule variance. It supports early detection of problems and helps in taking corrective action. This technique improves decision making and ensures better control over project performance.

1. Planned Value (PV)

Planned Value is the approved budget assigned to the work that is scheduled to be completed within a specific period. It shows how much work should have been done according to the project plan. PV helps in comparing planned progress with actual progress. It is also called Budgeted Cost of Work Scheduled.

PV = Planned

For example, if a project budget is Rs 10,00,000 and 40 percent work is planned to be completed, then PV is Rs 4,00,000. Planned Value helps managers track schedule performance and identify whether the project is ahead or behind schedule.

2. Earned Value (EV)

Earned Value is the approved budget for the actual work completed up to a specific date. It shows the value of work actually performed, not the money spent. EV helps in measuring real project progress in financial terms. It is also called Budgeted Cost of Work Performed.

EV = Actual

For example, if 30 percent work is actually completed in a project with a budget of Rs 10,00,000, then EV is Rs 3,00,000. Earned Value helps compare actual progress with planned progress and supports better project control.

3. Cost Variance (CV)

Cost Variance shows the difference between Earned Value and Actual Cost. It indicates whether the project is under budget or over budget. If CV is positive, the project is under budget. If CV is negative, the project is over budget.

CV = EV−AC

Here, AC means Actual Cost of work performed. For example, if EV is Rs 3,00,000 and AC is Rs 3,50,000, then CV is minus Rs 50,000. This shows cost overrun. Cost Variance helps managers take corrective steps to control project expenses and improve cost efficiency.

4. Schedule Variance (SV)

Schedule Variance shows the difference between Earned Value and Planned Value. It indicates whether the project is ahead of schedule or behind schedule. If SV is positive, the project is ahead of schedule. If SV is negative, the project is delayed.

SV = EV − PV

For example, if EV is Rs 3,00,000 and PV is Rs 4,00,000, then SV is minus Rs 1,00,000. This shows delay in project progress. Schedule Variance helps managers understand time performance and take corrective actions to complete the project on time.