Finance and Sourcing · tool 1 of 7
Earned Value Management (EVM)
Earned Value Management (EVM): tells objectively whether the project is on time and on budget — and where it will land.
Best for: Budgeted, measurable projects · Time: 15 min per report
Domain: Finance · Focus area: Monitoring and Controlling
CPI = EV ÷ AC
Forecast = Budget ÷ CPI
How it works
EVM compares three numbers at a given date. An index of 1 means on plan; below 1 means behind schedule (SPI) or over budget (CPI). The CPI also predicts the final cost.
- SPI < 1: less work done than planned.
- CPI < 1: the work done cost more than budgeted.
- Trends over several periods matter more than one value.
How to apply it
- Give each work package a budget — the total is your BAC.
- At each reporting date, estimate % complete per package → EV.
- Get actual costs (AC) from finance or timesheets.
- Compute SPI, CPI and the forecast (try it below).
- Act when an index drops below ~0.9, and show the trend in your status report.
Try it
Budget €100k; €50k of work planned, €40k worth done, €45k spent → SPI 0.80, CPI 0.89, forecast ≈ €112.5k.
Use simple rules for % complete (0% / 50% / 100%) to avoid the “90% done for weeks” trap.
Use it
- Playbook: We are over budget
- Playbook: I inherited a failing project
Quick check
EV = 40k, AC = 45k, so CPI = 0.89. What does it tell you?
Sources
- PMBOK® Guide, 8th edition, and The Standard for Project Management (PMI, 2025)
Last reviewed 2026-11-02 against the PMBOK® Guide, 8th edition · Practitioner review pending · How this guide is made