Earned value management in one minute
Earned value management (EVM) compares three numbers at a status date: what you planned to have done (PV), what you have actually done, measured at budget rates (EV), and what it really cost (AC). Together they show whether a project is ahead or behind, and over or under budget.
CPI = EV ÷ AC · SPI = EV ÷ PV
EAC = BAC ÷ CPI · ETC = EAC − AC · VAC = BAC − EAC
TCPI = (BAC − EV) ÷ (BAC − AC)
How to read the indices
| Index | Above 1.00 | Below 1.00 |
|---|---|---|
| CPI | Under budget for the work done | Over budget for the work done |
| SPI | Ahead of schedule | Behind schedule |
| TCPI | Must work more efficiently to hit budget | Can be less efficient and still hit budget |
Worked example
A AED 4.8 million project is 40% complete, so EV = 1.92 million. Planned value is 2.16 million and actual cost 2.07 million. CPI = 0.93 and SPI = 0.89: the project is over budget and behind schedule. If performance continues, EAC = 4.8 ÷ 0.93 = 5.18 million, a VAC of −0.38 million.
Frequently asked questions
Where do PV and EV come from in Primavera P6?
P6 calculates planned value from the baseline and earned value from activity % complete and budgeted cost. Export them from the Earned Value columns or the tracking layout at your data date.
Which EAC formula should I use?
BAC ÷ CPI assumes current cost performance continues, which is the most common choice. If the overspend was a one-off, AC + (BAC − EV) is more realistic.
Is SPI reliable near the end of a project?
No. SPI always returns to 1.00 at completion, even for late projects, because EV eventually equals PV. Use the time-based schedule from your programme for late-stage forecasting.