A method which measures project performance by comparing work completed against work planned (at a given date in the project schedule).
Earned value is an established management technique which relates resource planning to schedules, and to technical cost and schedule requirements. It is sometimes required to be used in commercial and government projects. EVM allows a better understanding of project progress than simply looking at tasks accomplished.
Under EVM, work is planned, budgeted, and scheduled in time-phased ''planned value'' increments, constituting a cost and a schedule measurement baseline.
There are two major objectives of an earned value system:
- Encourage contractors (and others) in the use of effective internal cost and schedule management control systems;
- Permit the customer(s) to be able to rely on timely data as produced by those systems for determining product-oriented contract status