Earned Value Management: Tracking Cost and Schedule Performance

Ever wonder how you can tell, mid-project, whether your 10 km HAM road stretch is truly on track—both in time and in budget? That’s where Earned Value Management (EVM) comes in. Think of EVM as your project’s health monitor: it doesn’t just tell you where you stand today, but how you got here and where you’re likely headed.

The Three Pillars of EVM

1. Planned Value (PV)Also called Budgeted Cost of Work Scheduled (BCWS), PV is how much you planned to spend on the work you scheduled to finish by today. For example, if your baseline schedule said you’d complete 3 km of earthworks (out of 10 km) by now, and that work was budgeted at ₹3 crore, your PV is ₹3 crore.

2. Earned Value (EV)EV, or Budgeted Cost of Work Performed (BCWP), measures how much of that budget you’ve earned through actual progress. If you’ve only actually done 2.5 km of earthworks (even if you spent ₹3 crore), your EV is ₹2.5 crore. This is the “aha” moment—EV tells you whether you’re ahead or behind the plan.

3. Actual Cost (AC)Also called Actual Cost of Work Performed (ACWP), AC is the real money you’ve shelled out so far. If you spent ₹3.2 crore to complete that 2.5 km, then AC is ₹3.2 crore. Now you can see cost overruns in real time.

Key Performance Indicators

With PV, EV, and AC in hand, you calculate:

• Cost Variance (CV) = EV – ACA positive CV means you’re under budget; negative means you’ve overspent.

• Schedule Variance (SV) = EV – PVA positive SV means you’re ahead of schedule; negative means you’re slipping.

• Cost Performance Index (CPI) = EV / ACCPI > 1.0 indicates cost efficiency; CPI < 1.0 signals a cost overrun.

• Schedule Performance Index (SPI) = EV / PVSPI > 1.0 means you’re faster than planned; SPI < 1.0 means you’re slower.

Imagine halfway through pavement laying you calculate SPI = 0.85: you’re only earning 85 % of your planned value each day. That’s your cue to investigate—maybe your paver train is underpowered, or base-course compaction is taking longer than estimated.

Why EVM Works for HAM Road Projects

HAM contracts tie annuity payments to specific milestones—subgrade completion, base course, final wearing course, toll commissioning. EVM aligns perfectly with this model because:

• It quantifies progress for each milestone in cost terms, not just in percent complete.

• It predicts future performance: if your CPI is stuck at 0.9, you know you’ll burn through your budget faster than planned.

• It supports claims & extensions: documented variances create clear evidence when monsoon rains or utility relocations delay your critical path, strengthening your claim for time extensions under HAM terms.

Implementing EVM on Your Site

1. Baseline Setup: Build your WBS and assign budgets to every activity—earthworks, drainage, asphalt.

2. Regular Tracking: Gather weekly progress reports and cost data—use digital dashboards or simple Excel templates.

3. Variance Analysis: Calculate CV, SV, CPI, and SPI; identify root causes for any negative variances.

4. Corrective Actions: Reallocate resources, adjust work sequences, or renegotiate vendor schedules to get back on track.

5. Forecasting: Use your current CPI and SPI to estimate Cost at Completion (EAC) and Schedule at Completion (SAC), informing your financing and cash-flow plans.