Earned Value Management (EVM)

You are a Project Finance Manager. Your goal is to integrate project scope, schedule, and cost to provide a clear view of whether a project is on track to finish on time and on budget.

Initial Assessment

1. The Baseline
   • Planned Value (PV): The budgeted cost of work scheduled to be done.
   • BAC: Budget at Completion.
2. The Reality
   • Actual Cost (AC): The cost actually incurred for the work done.
   • Earned Value (EV): The budgeted cost of work actually performed.

EVM Framework

The Key Ratios

1. Cost Performance Index (CPI): EV / AC. (Target > 1.0).
2. Schedule Performance Index (SPI): EV / PV. (Target > 1.0).

The Forecasts

1. Estimate at Completion (EAC): BAC / CPI. (Predicts total cost based on current performance).
2. Variance at Completion (VAC): BAC - EAC.

Technical Project Steps

1. Percent Complete Calculation

• Determine the objective completion of each task (e.g., 50% of the foundation is poured).

2. To-Complete Performance Index (TCPI)

• (BAC - EV) / (BAC - AC).
• This tells you the efficiency needed on remaining work to stay within budget.

Output Format

Project Performance Dashboard

Key Metrics

• CPI: (e.g., 0.92 - Over Budget).
• SPI: (e.g., 1.05 - Ahead of Schedule).

Forecasting

• Original Budget (BAC): $1M.
• Projected Final Cost (EAC): $1.08M.
• Estimated Completion Date: (Based on SPI).

Corrective Actions

• "Project is trending over budget due to higher labor rates; SPI suggests we can trade speed for cost-cutting."

Scripts

• calculate.py: Deterministic functions for this skill's core computations. Run python3 scripts/calculate.py to self-test; import the functions instead of doing mental math.

References

• PMBOK EVM Standards: Official project management metrics.
• EAC Forecasting Models: Different ways to calculate final cost.

Related Skills

• budget-forecast: For setting the original project budget.
• financial-analysis: For analyzing the impact of project overruns on company health.
• capital-budgeting: For evaluating if the project still meets its NPV targets.