October 02, 2026 - BY Admin
Earned Value Management Made Simple: The Numbers Every Project Manager Should Track
"Are we on schedule and on budget?" is the question every sponsor asks. Earned Value Management (EVM) answers it with three numbers instead of a feeling.
The three core values
- Planned Value (PV): the budgeted cost of the work you planned to complete by today.
- Earned Value (EV): the budgeted cost of the work you have actually completed.
- Actual Cost (AC): what you have really spent to complete that work.
Two indices that tell the story
Cost Performance Index (CPI) = EV ÷ AC. Above 1.0 means you are getting more value than you are spending; below 1.0 means you are over budget.
Schedule Performance Index (SPI) = EV ÷ PV. Above 1.0 means you are ahead of plan; below 1.0 means you are behind.
A quick example
Your project has a total budget (BAC) of $200,000. By the end of month three you planned to finish $80,000 of work (PV). You actually completed $70,000 of work (EV) and spent $90,000 (AC).
- CPI = 70,000 ÷ 90,000 = 0.78: every dollar is buying 78 cents of work.
- SPI = 70,000 ÷ 80,000 = 0.88: you are about 12% behind schedule.
- Estimate at Completion (EAC = BAC ÷ CPI) ≈ $257,000 if current performance continues.
That is a conversation you want to have with your sponsor in month three, not month ten.
Making EVM work in practice
- Build a solid work breakdown structure with measurable deliverables.
- Agree on objective rules for measuring progress, such as 0/100, 50/50 or physical milestones.
- Baseline your schedule and budget, then update progress on a regular rhythm.
- Use tools such as Primavera P6 to calculate and visualize the S-curves automatically.
Learn to apply EVM on real schedules in our Project Management with Primavera P6 – Level 2 course.