A method for integrating scope, schedule, and resources, and for measuring project performance. It compares the amount of work that was planned, versus actual earned, versus actual spent, to determine if cost and schedule performance are as planned. (PMI)
Technique for assessing whether the earned value in relation to the amount of work completed is ahead, on, or behind plan.
Tracks the project by considering effort “earned†against a budget only after it has actually been performed. For software projects, the variance is a measurement in person-hours (or person-days, person-years, etc.) that shows the difference between the effort planned to date on the baseline and the effort completed on the actual schedule. The budgeted cost for work scheduled (BCWS) is the estimated effort of the actual tasks that appear on the schedule to date. The actual cost of work performed (ACWP) is the effort spent on the tasks in the schedule that have actually been completed by the development team members. The data required to calculate this information can be gathered by comparing the effort represented in the baseline schedule (to find the budgeted cost) with the effort in the actual schedule. (Many project management software packages will calculate these numbers automatically.) The variance is the difference between these two numbers (BCWS - ACWP). (BCWS and ACWP are standard acronyms used in most earned value calculations.) If the variance is positive, then the project cost fewer person-hours than were budgeted; if it is negative, then the project overran the budget.
Earned value is a project management technique that relates resource planning to schedules and to technical cost and schedule requirements. All work is planned, budgeted, and scheduled in time-phased ''planned value'' increments constituting a cost and schedule measurement baseline. There are two major objectives of an earned value system: to encourage contractors to use effective internal cost and schedule management control systems; and to permit the customer to be able to rely on timely data produced by those systems for determining product-oriented contract status. ( http://www.acq.osd.mil/pm/evbasics.htm)
Earned Value Management (EVM) is a project management technique that measures forward progress objectively. EVM has the unique ability to combine measurements of technical performance (i.e., accomplishment of planned work), schedule performance (i.e., behind/ahead of schedule), and cost performance (i.e., under/over budget) within a single integrated methodology. EVM provides an early warning of performance problems while there is time for corrective action.