Earned value analysis (EVA) is a method of measuring the progress and performance of a project by comparing the value of the work actually completed with the work planned and the cost actually incurred.
EVA combines cost and programme into a single picture. At each reporting date three figures are compared: planned value (the budgeted cost of the work scheduled), earned value (the budgeted cost of the work actually performed) and actual cost (the cost incurred to achieve it). From these, variances, performance indices and a forecast final cost can be calculated.
- Cost performance index (CPI): earned value divided by actual cost; a figure below 1.0 indicates overspending.
- Schedule performance index (SPI): earned value divided by planned value; a figure below 1.0 indicates work is behind programme.
EVA relies on a sound baseline budget and programme and on reliable progress measurement, so it is most common on larger infrastructure and public sector projects.
Related terms: Cost Value Reconciliation, Forecast Final Cost, Cash Flow Forecast.
