Do we really need to calculate earned value for project?

budget (Photo credit: 401K)

What is earned value: It measures cost , schedule, and work done.Its a way to measure projects progress and provide budget variances. Its a indicator of schedule, budget,and milestone.It also gives us percentage of work done, budget spent, and time consumed. So the units to measure it is dollars and and work hours.

So whats the next step to calculate EV:

Prepares a WBS(work break down structure) to quantify each task as phases and then phases into modules, modules into more detail units as it descends with time-frame for each task have fixed time which gives us a baseline structure.

Lets understand some terms:

BCWS - Budgeted Cost of Work Scheduled
ACWP - Actual Cost of Work Performed
BCWP - Budgeted Cost of Work Performed

From above terms earned value will be defined as "Cost incurred to accomplish the work that has been done to date."

Derived metrics known as Schedule variance and Cost variance, if they fall into negative zone then project is in problem either by schedule slippage or by over budget.

Earned value measurement helps us in forecasting and status reporting of the project.

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