Earned Value (EV) is a project management technique used to measure the progress of a project. It combines scope, cost and schedule information into a single metric that can be used to track the performance of the project. EV is calculated by taking the total budget for the project and dividing it by the total number of planned activities or tasks. The result is then multiplied by the percentage of completion for each activity or task.
The EV metric provides an indication of how much work has been completed relative to the amount of money spent on the project. It also allows project managers to compare actual costs against planned costs and identify any potential cost overruns. This helps them to make informed decisions about how best to manage their projects.
Earned Value (EV) is calculated by taking the total budget for the project and dividing it by the total number of planned activities or tasks. The result is then multiplied by the percentage of completion for each activity or task. For example, if a project has a budget of $100,000 and 10 tasks, each task would have an earned value of $10,000. If one task was 50% complete, its earned value would be $5,000.
The EV metric can also be used to calculate other important metrics such as Cost Variance (CV), Schedule Variance (SV), and Cost Performance Index (CPI). These metrics provide additional insight into how well a project is performing in terms of cost and schedule.
Using Earned Value (EV) provides several benefits for project managers. It allows them to quickly assess whether their projects are on track in terms of cost and schedule. It also helps them identify any potential problems early on so they can take corrective action before it’s too late.
In addition, EV provides an objective way to measure progress which can help reduce disputes between stakeholders over whether certain tasks have been completed or not. Finally, it allows project managers to accurately forecast future costs and timelines based on current performance.