Microsoft Project Tips and Tricks
EARNED VALUE ANALYSIS OVERVIEW
Microsoft Project Tips and Tricks
Copyright © Project Learning Ltd. 2005
Page 1
Introduction
How many Microsoft Project users update their projects with actual and remaining work
and cost information? Furthermore, how many users take advantage of the Earned-Value
Analysis capabilities found within Microsoft Project? If your answer is ‘No’, then you are
missing out on a great deal of functionality – that can help you plan and manage your
projects more accurately and effectively.
These tips and tricks provide an introduction into Earned Value Analysis and illustrate the
potential that it provides.
Background
In addition to assessing any slippages or cost overruns in a project in general terms,
Earned Value Analysis (EVA) can be used to help determine if a project is providing value
for money or not. EVA concentrates on three basic parameters: How much work SHOULD
have been done so far (BCWS); how much money has ACTUALLY been spent to progress
the project so far (ACWP) and what is the VALUE of work that has been accomplished so far
(BCWP). By comparing these values, assessments can be made about how efficient a
project is and where problems may lie.
Microsoft Project Tips and Tricks
EARNED VALUE ANALYSIS OVERVIEW
Microsoft Project Tips and Tricks
Copyright © Project Learning Ltd. 2005
Page 2
What is earned value analysis, and why use it?
Earned Value Analysis (EVA) was developed by the US Department of Defense to
determine the performance of large military procurement contracts. Its techniques can
still be applied to the smaller projects currently in use today. Indeed, as Microsoft Project
allows you to drill down through and across a project, specific variances and general
trends can be easily found.
EVA looks at three basic parameters:
• What value of work SHOULD have been accomplished to date?
• How much value has been realized to date?
• How much has actually been spent to dat