Earned Value (EV) vs Planned Value (PV)

In Earned Value Management, Planned Value (PV) — sometimes called the Budgeted Cost of Work Scheduled (BCWS) — is the cumulative budget for all the work that was supposed to have been completed by a given reporting date, as established in the performance measurement baseline. Earned Value (EV) — also called Budgeted Cost of Work Performed (BCWP) — is the cumulative budget for the work that has actually been completed, regardless of what it cost. Comparing EV to PV gives the Schedule Variance (SV = EV − PV): a negative number means the project is behind schedule.

The Schedule Performance Index (SPI = EV / PV) puts this into ratio form: an SPI below 1.0 means work is being earned more slowly than planned. Both SV and SPI are expressed in cost (£) rather than time, which is counterintuitive but allows them to be calculated consistently across a complex programme where different workstreams have different unit costs. This also means that SPI converges to 1.0 at project completion regardless of actual schedule performance — a known limitation of classical EVM that earned schedule theory was developed to address.

The most important thing to understand about EV vs PV is that EV measures the value of work done, not the value of time elapsed. If a task is half done and was planned to be fully done by now, EV is 50% of the budget for that task, not 100%. This distinction is what makes EVM meaningful: it prevents projects from appearing on track simply because time has passed and money has been spent, when in reality the scope has not been delivered. Ensuring that EV is calculated on the basis of genuine completion — not subjective 'percent complete' claims — is the critical governance issue in any EVM implementation.