Enter your search terms Submit search form

Web www.projectservertips.com

Earned Value

One of the ways of reporting on project performance is to use Earned Value Analysis. There are three basic values that are the basis for the other earned value calculations. These are:

• BCWS - the Budgeted Cost of Work Scheduled, also known as Planned Value (PV).
• ACWP - the Actual Cost of Work Performed, also known as Actual Cost (AC).
• BCWP - the Budgeted Cost of Work Performed, also known as Earned Value (EV).

The Budgeted Cost of Work Scheduled (BCWS) is basically your budget for a task or project, up to a specified status date. In other words, the BCWS tells you how much you expect to have spent on the project based on how far the project schedule has progressed. This is applicable to a task or an entire project.

On the task level, the BCWS is the amount you expected to spend from the starting date of the task until the status date. If the status date is not specified in Project, then the status date will default to today's date.

As an example, if the project schedule indicates that your task should be 40% complete, then the BCWS for the task is 40% of the cost you expected to spend on that task.

If you expected to spend $100.00 on a task, when the shedule for the task is showing that it should be 40% complete, then the BCWS would amount to $40.00. Simply put, the BCWS is the estimated cost of what you thought it would take to get the task or project done up to a certain status date.

The Actual Cost of Work Performed (ACWP) is the actual cost incurred while completing all or some portion of a task or project, up to a specified status date. The cost includes resource costs, as well as any indirect and fixed costs required to complete the task or project.

The Budgeted Cost of Work Performed (BCWP) is the cost of the physical work completed on a task up to a certain status date. This is the monetary value of the work performed based on the work actually completed on a task.

If the amount of work completed equals 50% of the work on a task, and the budget is $100.00 for the task, then the BCWP is $50.00.

Note that the difference between BCWS and BCWP is that the BCWS is a cost that is dependent on how much of the schedule is complete, versus a cost associated with how much of the work has actually been completed for BCWP. This is reflected in their alternate names, as BCWS is also known as "Planned Value", and BCWP is also known as "Earned Value".

The formulas for earned value analysis can be calculated based on the values of BCWS, ACWP, and BCWP, which will be explained in more detail in this tutorial.