The PMP exam is big on terminology. These are the basic Earned Value Terms you need to know. If you are studying to pass the PMP exam you should know these by heart and be able to derive them in case you are heartbroken. They really are fairly simple. In order from first to last:
BAC = Budget at Completion (Project budget)
AC = Actual Cost of the Work Performed
EV = Earned Value
EV = Budgeted Cost of the Work Performed
EV = % complete times BAC
PV = Planned Value
PV = Budgeted Cost of the Work Scheduled
CV = Cost Variance
CV = EV – AC
CPI = Cost Performance Index
CPI = EV/AC
SV = Schedule Variance
SV = EV – PV
SPI = Schedule Performance Index
SPI = EV/PV
EAC = Estimate at Completion
EAC = BAC/CPI
ETC = Estimate to Complete
ETC = EAC – AC
VAC = Variance at Completion
VAC = BAC – EAC
Note that the acronyms are slightly different from what was used a few years ago and is still widely used by old timers. PMI simplified the terms by dropping a letter here and there. The fundamentals are the same though.
Comments (3)
Turns out the acronyms used by PMI are ignored in most foirms who get paid by using EVMS. This is the critial understanding about this area of PM.
If you get paid by being a EVMS shop - we do - then all this external falder rall is moot. The customer (in our case a NASA center, and there are different approaches for different centers, and there are 10 centers) each negoiate the exact processes for EVMS.
Then the DCMA (Defense Contract Management Agency comes and audits at the Integrated Baseline Review (IBR) and every month after that. For NASA the 533M/Q is one report full of EVMS numbers the CPR (Contract Performance Report) is a anothe and there are 5 formats for that one. Which reports are sent when is a contract issue itself.
If you'd like I can send the Handbook(s) used every day in an EVMS shop. A little (but very little) of what PMI talks about is how it is actually done, beyond the simple versions of the math.
Finally, Earned Schedule is the current (2005) approach.
http://www.apm.org.uk/documentLibrary/198.pdf
EV is a powerful tool, once the transition to performance based management takes place. It IS for everyone, but everyone has to be ready for EV before it will work. These means defined deliverables, cost and schedule integration, and the discipline to actually get the answer to "where are we on the scheduel."
The failures of EV are not EV's fault, no matter how loudly it is proclaimed, but it is hard work, and many project's don't like this kind of hard work.
Posted by Glen B. Alleman | July 24, 2005 12:57 PM
Posted on July 24, 2005 12:57
It might be helpful to show the migration from the older BCWS type acronyms to the newer format SV PV EV, etc. . .
Posted by Miles Dahl | January 23, 2008 9:22 AM
Posted on January 23, 2008 09:22
If you are taking the PMP certification, you need to know these, but you do NOT need to agonize over them. It's better that you understand the flow of a project, the knowledge areas, the processes and the matrix that these form.
Also, and most important - you need to frame your answers from the prespective "In a perfect PMBOK world I would..."
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I disagree. There were several questions which covered earned value. Knowing thing like if a CPI greater than 1 is good or bad is important on the test. -Jack
Posted by James Fleming | September 4, 2010 5:11 AM
Posted on September 4, 2010 05:11