{"id":5203,"date":"2023-02-27T02:24:40","date_gmt":"2023-02-27T02:24:40","guid":{"rendered":"https:\/\/course.oeru.org\/ipm103\/?page_id=5203"},"modified":"2023-02-27T02:24:40","modified_gmt":"2023-02-27T02:24:40","slug":"more-about-earned-value-and-planned-value","status":"publish","type":"page","link":"https:\/\/course.oeru.org\/ipm103\/learning-pathways\/budget\/more-about-earned-value-and-planned-value\/","title":{"rendered":"More about earned value and planned value"},"content":{"rendered":"
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When we’re thinking about Earned Value<\/b> in project management, we’re really looking at the amount of work that has been completed, and asking ourselves whether that’s what we expected in terms of progress, in the expected period of time, and for the expected spend. In other words, how much money should have been spent, over how much time, for the amount of work done to date.\n<\/p>\n

This may differ from the Planned Value<\/b> for a project, if the project is ahead of (or behind) time, or if more (or less) money has been spent than anticipated. Planned Value, sometimes called the Budgeted Cost of Work Scheduled<\/b>, estimates the cost of each activity in the project, and maps it against time. In this way, the Project Manager can plan for how much money is needed at key points in the project, as well as planning for human resources, equipment, and so on.\n<\/p>\n

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Street lighting<\/div>\n<\/div>\n<\/div>\n

The Mayor of AnyTown has asked a project manager to lead a team of people installing energy-efficient street lights across the city, within two years. The Project Manager has divided the city into different zones, and set out a plan including a breakdown of costs and time. The Mayor has approved the plans, including the planned value of work to be completed in each zone by an appointed date.<\/p>\n

Once the project begins, installation moves more quickly than anticipated. The Project Manager is pleased to find that the Earned Value is higher than the Planned Value for a particular date. In other words, more work has been completed in a period of time than had been planned for. This may<\/i> or may not mean that less money has been spent. For example, they could have achieved the work through being more efficient in their job and therefore saved cost in wages. Alternatively, they could have employed more staff or more experienced staff at a higher cost than was planned.\n<\/p>\n

In the next phase of the project, though, the technicians hit upon lots of problems. At the halfway point in the whole project, only three out of the eight zones have been completed, and not four as had been expected. The Earned Value is therefore lower than the Planned Value at this stage, and the project is behind schedule.\n<\/p>\n

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