The three base numbers
| Term | Also called | Meaning |
|---|---|---|
| PV planned value | BCWS | The budget for the work that should be done by the status date |
| EV earned value | BCWP | The budget for the work actually done by the status date |
| AC actual cost | ACWP | What the work done actually cost (or the man-hours actually spent) |
| BAC budget at completion | The total budget for all the work |
The trick is in EV: it values the work done at its budget, not at what it cost. That makes it comparable with both the plan (PV) and the spend (AC).
Man-hours or money?
On construction projects earned value is very often measured in man-hours rather than currency. Budgeted man-hours come from quantities and norms, earned man-hours come from quantities installed, and actual man-hours come from timesheets. This keeps craft productivity separate from price changes in materials and exchange rates. The formulas are identical either way.
Worked example
A piping and steel package has a budget of 10,000 man-hours. At the status date:
- The plan says 50% should be done, so PV = 5,000 MH.
- Measured progress is 42.5% (see the progress measurement guide for how this is calculated), so EV = 4,250 MH.
- Timesheets show AC = 5,100 MH booked to the package.
| Measure | Formula | Result | Reading |
|---|---|---|---|
| Schedule variance (SV) | EV − PV | −750 MH | Behind plan |
| Schedule performance index (SPI) | EV ÷ PV | 0.85 | 85% of planned work done |
| Cost variance (CV) | EV − AC | −850 MH | Overspent |
| Cost performance index (CPI) | EV ÷ AC | 0.83 | Each hour spent earns 0.83 hours of budget |
| Estimate at completion (EAC) | BAC ÷ CPI | 12,000 MH | Forecast if productivity stays the same |
| Estimate to complete (ETC) | EAC − AC | 6,900 MH | Hours still needed |
| Variance at completion (VAC) | BAC − EAC | −2,000 MH | Forecast overrun |
| To-complete performance index (TCPI) | (BAC − EV) ÷ (BAC − AC) | 1.17 | Productivity needed on the rest to finish on budget |
Reading it together: the package is about 15% behind and 17% less productive than estimated. To finish within 10,000 hours the crews would need to work 17% better than budget on the remaining work, which is rarely realistic, so the honest forecast is around 12,000 hours.
Which EAC formula to use
- BAC ÷ CPI assumes the productivity so far continues. A sound default once a package is 20 to 30% complete.
- AC + (BAC − EV) assumes the remaining work goes exactly to budget. Only defensible if the cause of the overrun is gone.
- AC + (BAC − EV) ÷ (CPI × SPI) assumes being behind schedule will also push costs up, for example through acceleration. A cautious forecast.
Reading SPI with care
SPI is measured in budget, not in time, and it always returns to 1.0 at the end of a project because all the planned work is eventually earned. Late in a project it stops being a good schedule indicator; look at the critical path and float instead. A high SPI can also hide trouble if crews are doing easy, non-critical work ahead of plan while critical work slips.
What makes earned value reliable
- Objective progress: measured quantities and agreed rules of credit, not percent-complete guesses.
- A frozen baseline, so PV does not move every month.
- Timesheets booked to the same WBS elements as the budget.
- Same cut-off date for progress and actual hours.
Earned value in Planline
Planline calculates budget man-hours from quantities and norms, earned man-hours from the quantities you record, and the planned percent complete at the status date. The dashboard shows actual against planned progress, earned man-hours, the schedule performance index (SPI) and the planned versus actual S-curve. Actual hours from timesheets are not tracked in the scheduler, so calculate CPI and the forecast alongside it in the Excel report.
Frequently asked questions
What is a good SPI or CPI?
Exactly 1.0 means on plan. Above 1.0 is ahead of schedule (SPI) or under budget (CPI); below 1.0 is behind or over. Most owners start asking questions below about 0.95.
What is the difference between earned value and physical progress?
Physical progress is earned value expressed as a percentage: EV divided by BAC. Earned value management adds the comparison with planned value and actual cost.
Can I use earned value without cost data?
Yes. Using man-hours for PV, EV and AC is common in construction and gives the same indices without needing cost information.
Related guides
Try it on your own schedule
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