earned value management is a project management technique to measure project performance and progress by examining the work completed at each stage of the project in simple terms here's how it works every project has a planned cost which is the amount of money that the project is expected to cost a schedule the amount of time that the project should take and a scope the amount of work needed to be done in order to complete the project let's say the planned cost for your project is $10,000 the schedule is 3 months and there are 100 estimated hours to complete the work within the scope as the project progresses so does cost of salaries expenses and so on this is the actual cost now let's say you're halfway through the project time frame and you've spent $4,000 if we only take a look at these two numbers it would seem clear that the project is slightly under budget and doing well but what if we take into account the amount of work completed here's how we can calculate what EVM calls the earned value or EV for short as the name suggests earned value is simply the value of work done at each stage of the project let's say that although you're 50% through the project timeline you finished 25% of the work within the project scope or in this case 25 hours a simple formula allows you to calculate the earned value ev equals PC * number of completed hours divided by hours within the project scope so in this case earned value equals $10,000 multiplied by 25 and divided by 100 this gives us $2,500 as the earned value at this moment in time if you're working within agile methodologies this would be the burnup chart status and whatever is remaining in the project scope is the remaining backlog you can now see that although you've spent less than 50% of the planned cost of the project you're behind in terms of progress the difference between the earned value and the planned cost gives you the schedule variance the difference between the actual cost spent to date and planned cost gives you the cost variance with this in mind you can assume that the rest of your project will continue in this manner and if nothing changes you will be behind schedule and over budget knowing this information early in the project allows you to be agile and make changes where needed before things get out of hand and that's EVM in a nutshell try Tempo Budgets and get Agile EVM seamlessly integrated in Jira go to tempo.io/try io/try