Earned Value Management (EVM) Template

If you haven't already defined your project schedule using a Gantt chart, we recommend that you first download Vertex42's Gantt Chart template. The Gantt chart is used to define the project schedule (WBS, Tasks, durations, and task dependencies), while the EVM worksheet is used for planning and tracking your spending.

The figure below shows the status of a fictional 12-month project as of month 7. To understand the graph, you'll need to understand the following terms:

• Planned Value (PV): This is the Budgeted Cost of Work Scheduled (BCWS). When you create a project schedule, you assign a Total Budgeted Cost (TBC) to each separate task. For long-term tasks, this cost may be spread out over multiple periods and may not always be linear, so the Earned Value Management Template lets you indicate the budgeted cost for each period and it calculates the TBC for each task. The Planned Value is the baseline that you will be comparing to.
• Actual Cost (AC): The Actual Cost of Work Performed (ACWP) is the amount you have spent, including labor and materials and other costs. The Actual Cost alone does not tell you anything about how much work was actually completed, but it's still a very critical number to report.
• Earned Value (EV): This is the Budgeted Cost of Work Performed (BCWP), or in other words, the value of the work completed. The project manager must come up with rules for how to assign the value. In the Earned Value Management Template, the EV is calculated by multiplying the % Complete by the Total Budgeted Cost (TBC) for each task.

Figure 1: Chart showing cumulative Earned Value (EV), cumulative Actual Cost (AC), and cumulative Planned Value (PV) for a sample 12-month project.

Assigning Earned Value

The rules you use for assigning earned value are highly dependent on how you define your project tasks. If you use a good work break-down structure, assigning earned value may end up being a lot easier.

For example, if you had a task called "Purchasing" that spanned the entire project period, the planned value for that task would be highly nonlinear. You might spend $5000 at the start, then $1000 during month 2, then $2500 during month 5. The TBC for that task would be $8500. Assuming the purchases were made on schedule, the % Complete for that task as of month 2 would be ($5000+$1000)/$8500. If the actual cost of that initial purchase was only $4500, the Earned Value would still be ($5000+$1000). The $4500 would be included in the Actual Cost. That is how you end up knowing whether you are under budget.

Alternatively, the project manager might define "Purchasing" as a separate category of tasks, with each large purchase as a sub task and another sub task for miscellaneous purchases. Then, whenever each purchase is made, it is a simple matter of marking the appropriate task as 100% complete.

Keep in mind that just because a task is 50% complete does not mean that it has earned 50% of the value. Think of an open heart surgery and you'll get the idea. It is common to give more weight to completing a task than to just starting it or being half-way done.