The Earned Value Method

The Earned Value Method (EVM) is a technique to objectively measure project progress. In Allegra, EVM is used to provide you with a conservative but very reliable statement of deviations from the planned effort and schedule.

Each item requires three properties to support EVM:

  • Planned Value (PV, Planned): the quantity of work planned (BCWS). This is the estimated total amount of work to complete the item.

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Power value method in Allegra

  • Current Cost (AC, Current): the amount of work expended to date.

  • Estimated Remaining Work (ERW, Remaining): the estimated amount of work to complete the item. At the beginning, this value is equal to the planned value.

There are two derived parameters:

  • Activity Value (EV): also known as budgeted labor cost (BCWP). This is a specific percentage of the budgeted value. In the simplest case, the value is zero as long as the item is not completed, and it is equal to the budgeted value when the item is completely finished. The activity value is independent of the actual Amount of Work Performed.

  • Actual Planned Value (APV): the sum of the actual cost (AC) plus the estimated remaining work (ERW).

By monitoring the three values for PV, AC, and EV over time, you can get early indications of delays and expense overruns.

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An Earned Value Chart

This method is advantageous if you only post the earned value when an item has been completed. Until completion is achieved, the performance value remains at zero. If the project structure is sufficiently detailed, the result is a realistic, conservative progress overview and a reliable projection of the final state.

In the Gantt view, a progress bar indicates the percentage of completion (CG) of an item. The situation when an item will be completed is calculated from the estimated remaining time and the actual costs as CG = actual costs / actual value.

The POC for higher-level activities is calculated as SUM (ACi / SUM (APV)), where ACi is is the actual effort for each non-collective activity, and SUM (APV) is the sum of all actual planned values for all non-collective items.

To obtain an Earned Value Report, go to Task Management > Reports > Earned Value Chart.

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Earned Value Report