EVM Variances and Indexes

I'd like to first discuss calculating variances and indexes from those fundamental EVM numbers I discussed in my last post.

Variances

Variances are always expressed in currency. They are just what they sound like, the difference between where you are at and where you had planned to be.

CV - Cost Variance

• CV = EV - AC (or CV = BCWP - ACWP)
• Tasks 1-20 are done. You planned on that costing $90,000, but it actually cost you $85,000. $90k - $85k = $5k
  

SV - Schedule Variance

• SV = EV - PV (or SV = BCWP - BCWS)
• Tasks 1-20 are done, but you planned on getting 1-23 done. 1-20 was planned to be $90,000, and 1-23 was planned to be $100,000. $90k - $100k = -$10k

Indexes

Indexes are used to measure performance on a ratio basis which could actually be compared across projects regardless of their comparative sizes. If you are working perfectly to plan, your indexes will both be 1.00. Greater than 1.00 means you are doing better than planned, less than 1.00 means you are doing worse than planned.

CPI - Cost Performance Index

• CPI = EV / AC (or CPI = BCWP/ACWP)
• Using the numbers above, $90k / $85 = 1.06

SPI - Schedule Performance Index

• SPI = EV / PV (or SPI = BCWP / BCWS)
• Using the numbers above, $90k / $100k = 0.90

So, looking at these variances and indexes, you can see in the example above that we are behind schedule, although it looks like we've managed to keep our costs down so we are actually below budget too.

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