A short definition of the earned value analysis:
The earned value analysis is a project controlling procedure that, along with the planned and actual costs, includes the earned value. Through this the project’s cost efficiency and time efficiency can be calculated.
How does the earned value analysis work?
It doesn’t matter whether you plan agile or classical – the earned value analysis can be implemented with both management forms, even using hybrid project management. The earned value is always calculated for activities or work packages. To evaluate the whole project, just calculate the earned value of the top project activity. Lower activities can also be calculated through the earned value analysis. That applies to classic, agile and hybrid projects. So in agile project management, the lower activities correspond to the release and sprint activities that are connected with backlogs or individual requirements. As the basis for the earned value analysis, you need the duration, the planned value and the actual cost of the activities.
Interpretation of the earned value diagram: examples
For the correct interpretation of the earned value diagram, the calculation of the CPI and SPI needs to be included. To find out the cost efficiency, the EV has to be related to the AC, for example. How the EV fits to the PV doesn’t matter here. Compare the following examples:
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Use a template for the earned value analysis that supplies figures and diagrams.
The three types of earned value analysis
The crucial factor for calculating the earned value is the degree of completion (PC). This is decided depending on the type of the earned value analysis: if you plan classically with activities and work packages, then use the value in percentage. In agile planning, the relationship between the PV of the completed requirements to the PV of all planned requirements is applied. Hybrid projects use a combination of both. Here are a few examples.