In 30 seconds
- Compares what was planned, what was earned and what was spent.
- Gives schedule and cost performance indexes.
- Agile versions use story points and sprints as the baseline.
The three numbers
| Term | Means |
|---|---|
| Planned value (PV) | Budgeted cost of work scheduled so far |
| Earned value (EV) | Budgeted cost of work actually completed |
| Actual cost (AC) | What was really spent |
The two indexes
- Schedule performance index (SPI) = EV / PV. Below 1 means behind schedule.
- Cost performance index (CPI) = EV / AC. Below 1 means over budget.
EVM in agile
AgileEVM uses the release backlog as the baseline and completed story points as earned value, measured each sprint. It can help organizations that require EVM reporting, though a burnup chart usually tells the same story more simply.
Myth vs reality
Myth · EVM can't work with agile.
Reality · Adapted versions exist and work for reporting.
Myth · EVM shows value to customers.
Reality · It shows progress against plan, not customer value.
Myth · A CPI of 1 means success.
Reality · On budget doesn't mean the right thing was built.
FAQ
Who uses EVM?
Often government and large contract projects.
Is EVM required for agile contracts?
Only where the contract or regulator demands it.
What's the simplest agile alternative?
A burnup chart with cost tracked alongside.