Earned Value Overview :
Earned value analysis is a procedure of measuring the cost of work performed up to the status date or current date.
Project schedule and cost measurements should be managed as integrated elements and not as separate items. If the project is over budgeted than planned or projectís tasks are getting delayed, you can know you may be in trouble. Earned Value analysis solves this issue by providing the information of schedule and costs variances related to a baseline plan. Earned value uses the original estimates saved with a baseline and progress of the plan reported on the project to determine whether project is on track in terms of duration and cost.
Earned value is always specific to a status date. Status date may be current date, a date in the past, or a date in the future. Setting the status date to the date you last updated project progress is always the best practice.
Earned Value compares the following information:
Planned Value: How much work you planned to have completed by now (usually calculated in dollars or hours)
Actual Cost: How much you have actually spent by now (usually calculated in dollars or hours)