Earned performance Index project Management
- Schedule Variance (SV) = Earned Value – Planned Value. The difference between what was planned to be completed and what has actually been completed as of the current date.
- Cost Variance (CV) = Earned Value – Actual Costs. The difference between the work that has been accomplished (in dollars) and how much was spent to accomplish it.
In the graph below, the project shown has a negative Schedule Variance, because it has “earned” less value than was planned, as of the current date. However, it has a positive Cost Variance, because the Earned Value is greater than the Actual Costs accrued:
- Schedule Performance Index (SPI) = Earned Value / Planned Value. Schedule variance related as a ratio instead of a dollar amount. A ratio less than 1.0 indicates that work is being completed slower than planned.
- Cost Performance Index (CPI) = Earned Value / Actual Costs. Cost variance related as a ratio instead of a dollar amount. A ratio less than 1.0 indicates that the value of the work that has been accomplished is less than the amount of money spent.
In the schedule below, Project A has a CPI greater than 1.00. This shows us that the project has been earning value faster than it has been accruing costs:
However, Project A also has a SPI value that is less than 1.00. Although Actual Costs are low, Task 1 is behind schedule, so the project has not earned as much value as was planned.
Successfully Presenting Earned Value is a free e-book which will help you learn to implement and present Earned Value schedules. It offers both an explanation of Earned Value Management principles, and step-by-step instructions. This e-book is offered at no charge. After reviewing it, you may be interested in downloading our Milestones Professional software. Milestones Professional was used to produce the presentation-ready Earned Value reports shown in the e-book and can be used to make schedules in many formats, including Gantt charts, Milestone charts, Summary charts, Resource Charts and more.
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