Earned Value Management
It is week 26 of a $120M biologics fill-finish facility build. The project manager reports 52% complete and "on track." The finance controller sees $68M spent against a $120M budget and feels reassured. But the schedule says only 45% of the planned work should be complete by now, which means the project is actually ahead of plan. Meanwhile, the $68M spent against $62.4M of earned value means the project is burning cash faster than it is delivering value. Without EVM, these two signals, schedule ahead but cost overrun, are invisible. With EVM, they are captured in two numbers: SPI = 1.16, CPI = 0.92.
ProBeya's EVM module implements full Earned Value Management with classical derived metrics plus Earned Schedule (ES) for time-based performance analysis. Periodic snapshots build a time series for S-curve charts and trend analysis. Portfolio-level EVM aggregates metrics across all active projects using BAC-weighted averaging, giving the PMO Director a single performance view of the entire capital program.
When to Use EVM vs. Simple Budget Tracking
Not every project needs EVM. Here is the decision framework:
| Project Characteristic | Recommended Approach |
|---|---|
| Budget < $500K, duration < 6 months | Simple budget tracking (planned vs. actual) |
| Budget $500K-$5M, well-defined scope | Light EVM: monthly CPI/SPI snapshots |
| Budget > $5M or duration > 12 months | Full EVM with Earned Schedule and S-curves |
| Regulatory capital project (GxP) | Full EVM required: CPI/SPI feed gate review criteria |
| Portfolio of 10+ projects | Portfolio-level EVM with BAC-weighted aggregation |
For pharmaceutical capital projects, most regulatory and site-level investments exceed the $5M threshold, making full EVM the default governance expectation.
Core EVM Metrics
Each snapshot captures four base values and derives a complete set of performance indicators:
Base Values (Input)
- PV (Planned Value / BCWS) -- Budgeted cost of work scheduled to date
- EV (Earned Value / BCWP) -- Budgeted cost of work actually performed
- AC (Actual Cost / ACWP) -- Actual cost of work performed
- BAC (Budget at Completion) -- Total approved project budget
Derived Metrics (Computed Automatically)
| Metric | Formula | Interpretation |
|---|---|---|
| SV (Schedule Variance) | EV - PV | Positive = ahead of schedule |
| CV (Cost Variance) | EV - AC | Positive = under budget |
| CPI (Cost Performance Index) | EV / AC | > 1.0 = efficient; < 1.0 = cost overrun |
| SPI (Schedule Performance Index) | EV / PV | > 1.0 = ahead; < 1.0 = behind |
| EAC (Estimate at Completion, CPI) | BAC / CPI | Projected total cost at current efficiency |
| EAC (Estimate at Completion, SCI) | AC + (BAC - EV) / (CPI × SPI) | Accounts for both cost and schedule performance |
| EAC (Bottom-up) | Manual estimate | Project manager's independent re-estimate |
| VAC (Variance at Completion) | BAC - EAC | Positive = projected savings; negative = projected overrun |
| TCPI (To-Complete Performance Index) | (BAC - EV) / (BAC - AC) | Required future efficiency to meet budget |
Earned Schedule Metrics
Classical SPI has a well-documented flaw: as a project approaches completion, SPI converges toward 1.0 regardless of actual schedule performance. A project that finishes twelve months late will show SPI = 1.0 at completion. Earned Schedule (ES) solves this by expressing schedule performance in time units rather than monetary units.
When earnedSchedule and actualTime values are provided, ProBeya computes:
- SPI(t) = ES / AT -- Schedule performance in time units (does not converge)
- SV(t) = ES - AT -- Schedule variance in working days (negative = behind)
- IEAC(t) = PD / SPI(t) -- Independent estimate at completion in time
Use Earned Schedule metrics instead of monetary SPI for schedule forecasting on any project past 50% completion. For a technology transfer program spanning 18 months, SPI might show 0.97 at month 15, masking a three-month delay that SPI(t) would reveal clearly.
Worked Example: Equipment Qualification Program
Consider a $24M equipment qualification program for a new packaging line:
Month 6 Snapshot:
- BAC = $24,000,000
- PV = $6,000,000 (25% of budget scheduled through month 6)
- EV = $5,400,000 (22.5% of planned work completed)
- AC = $6,200,000 (actual spend to date)
Computed Metrics:
- SV = $5,400,000 - $6,000,000 = -$600,000 (behind schedule)
- CV = $5,400,000 - $6,200,000 = -$800,000 (over budget)
- CPI = 5,400,000 / 6,200,000 = 0.871 (spending $1.15 for every $1.00 of value)
- SPI = 5,400,000 / 6,000,000 = 0.900 (delivering 90 cents of schedule for every dollar planned)
- EAC (CPI) = 24,000,000 / 0.871 = $27,554,535 (projected $3.55M overrun)
- TCPI = (24,000,000 - 5,400,000) / (24,000,000 - 6,200,000) = 1.045 (must improve efficiency by 4.5% to finish on budget)
PMO Interpretation: With CPI at 0.871, the project is trending toward a $3.55M overrun. The TCPI of 1.045 is achievable but requires immediate corrective action. The PMO should investigate root causes: Are external labor rates higher than budgeted? Is rework from qualification failures inflating actual costs? This analysis feeds directly into the next stage-gate review.
S-Curve Charts
The getChartData procedure returns time-series arrays of PV, EV, AC, BAC, CPI, and SPI for rendering S-curve charts. Data can be filtered by date range. The S-curve is the single most important visual artifact in capital project governance: it shows, at a glance, whether the project is tracking to plan, diverging, or recovering.
For pharmaceutical capital projects, the S-curve pattern often shows a flat early phase (engineering and procurement), a steep ramp during construction and installation, and a long tail during qualification and validation. Knowing this pattern helps PMO teams set realistic expectations for CPI/SPI behavior at different project stages.
Portfolio-Level EVM
The portfolio EVM aggregation provides a "single number" for the capital program:
- Fetches the latest snapshot for each active project in the portfolio
- Sums PV, EV, AC, and BAC across all projects
- Computes portfolio-level derived metrics from the aggregated totals
- Returns both the portfolio summary and per-project breakdown
The aggregation is BAC-weighted, meaning a $200M facility build contributes proportionally more to portfolio CPI/SPI than a $2M equipment upgrade. This prevents small projects from distorting the portfolio signal.
When CPI < 1.0 and SPI < 1.0 simultaneously, the project is both over budget and behind schedule. Focus corrective action on the lower of the two indices first. If CPI = 0.85 and SPI = 0.92, cost performance is the more urgent problem.
Take EVM snapshots at consistent intervals, every Friday or on the last working day of the month. Irregular intervals produce noisy trend lines that make it harder to distinguish genuine performance shifts from measurement artifacts.
Snapshot Management
Individual snapshots can be deleted via deleteSnapshot if they contain erroneous data. One snapshot is stored per project per snapshot date (enforced by a unique constraint). The getSnapshots procedure returns the full time series with optional date range filtering.
Permissions
| Action | Required Role |
|---|---|
| Take EVM snapshot | Project Manager, PMO, or Admin |
| View indicators | Any project member |
| View S-curve charts | Any project member |
| Delete snapshot | PMO or Admin |
| View portfolio EVM | PMO Director or Admin |
A TCPI significantly above 1.0 (e.g., > 1.20) usually indicates the original budget is no longer achievable. At that point, the project manager should prepare a formal Estimate at Completion (bottom-up) and present it to the steering committee for re-baselining rather than continuing to report against an unachievable BAC.
Related Features
- Budgets & Costs -- Actual Cost (AC) values flow from approved cost entries
- WBS -- Earned Value is derived from WBS completion percentages and planned effort
- Scoring & Optimization -- EVM performance data informs portfolio-level decisions
- Stage-Gate Reviews -- CPI/SPI thresholds are common gate review criteria