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How is earned value management used to measure project performance?

I want to know how do project managers use EVM (Earned Value Management) to measure project performance.

One the same note, how accurate is the EVM data pertaining to project performance? For example, if according to our EVM calculation, the project is late, does this mean that the project is definitely late?
asked 10 years ago by anonymous

1 Answer

The performance of the project is mainly measured against the time and the costs. There are two EVM variables that will tell you how the project is faring against these two constraints: the CPI and the SPI.

CPI is the Cost Performance Index, and it will tell us whether the project is on budget (CPI = 1), overbudget ( CPI < 1), underbudget (or sending less money than we actually planned to spend, which is a good thing - CPI > 1)

SPI is the Schedule Performance Index, and it will tell us whether the project is on schedule (SPI = 1), behind schedule (SPI < 1), ahead of schedule (SPI > 1).

You can find out how to calculate the SPI and CPI here: http://www.projectmanagementquestions.com/3280/how-to-calculate-cpi-and-spi

Note that there other EVM values that can tell us about the project's performance, but SPI and CPI are the ones that are most commonly used.
answered 10 years ago by MaplePM (46,940 points)

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