Using The Earned Value Method To

Calculate Project Delays In Terms Of

Time
By: Ahmed Elsayed
Experienced Planning Engineer with a demonstrated history of working in
the civil engineering industry. Certified Project Management Professional
(PMP®) Skilled in Primavera P6, Project Estimation, and Construction
Management. Have a Bachelor's degree (Bsc.) Civil Engineering focused
in Construction Management & Planning from Cairo University.
 Reference Used
• “Practice Standard for Earned Value
Management”
ISBN: 1-930699-42-5
Published by: Project Management Institute, Inc.

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 Earned Value Method
• The Practice Standard “Practice Standard for
Earned Value Management” mentions two
methods to calculate Schedule Variance (SV) &
Schedule Performance Index (SPI).
• The two methods are:
1.Cost Based Method.
2.Time Based Method.

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 Cost Based Method

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 Cost Based Method
• The Cost Based Method is based on comparing
the Planned Value(PV) and the Earned Value(EV)
for work done at a certain moment of time.
• Based on Cost the SV & SPI are calculated as
follows:

SV= EV-PV SPI= EV/PV

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 Cost Based Method
• For example:
For a certain project , a progress report is
prepared at a certain date, It was found that
the Earned Value till the date is 32 M ($) & the
planned Value according to the schedule was
48 M ($). So the SV will be:

SV= EV-PV = 32 M – 48 M = -16 M ($)

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 Cost Based Method

SV= EV-PV = 32 M – 48 M = -16 M ($)

• Schedule variance also can be represented as

a percentage by dividing it by the planned
Value:

SV% = SV/PV = -16 M/48 M = -33%

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 Cost Based Method
• Schedule Performance is calculated by
dividing the Earned value by the Planned
Value, So the SPI will be:

SPI= EV/PV = 32 M / 48 M = 0.67

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 Cost Based Method
So from the example above:
• The SV indicates that a quantity SV = -16 M ($)
of work worth 16 M ($) was SV($)= -33%
supposed to be finished, but SPI = 0.67
actually it wasn’t:
• THE SV% & the SPI indicate that
33% of the planned work wasn’t
finished.
• But all these don’t refer to
delayed time.
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 Why Cost based method cannot
be used to judge time?

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 Cost Based Method
At the end of the Project, EV will be equal to the
planned value, So the SV & the SPI will be as
follows:
SV= EV - PV = zero

SPI= EV/PV = 1
Which means that all work is done. But it neglects
the time delay, Even if the project stayed for 6
months later than it’s planned finish date.

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 Time Based Method

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 Time Based Method
• The “Practice Standard for Earned Value
Management” states another method for
schedule analysis based on time.

• This method compares the Actual Time (AT)

vs the Planned Time (PT) for a fixed amount of
work (the work done till now)

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 Time Based Method
• Based on Time the SV & SPI are calculated as
follows:

SV(t)= PT - AT SPI(t)= PT/AT

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 Time Based Method
• For example:
• After four months of the project start, we
found that the amount of work done till now
was supposed to be done in three months
only. So the PT= 3 months & the AT= 4 months
SV(t)= PT – AT = 3 – 4 = -1 months

SPI(t)= PT/AT = 3/4 = 0.75

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 Time Based Method

SV(t)= -1 months SPI(t)= 0.75

• The SV(t) means that the work has a delayed

time of one month and the SPI(t) means that
25% of work time is wasted.

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 Time Based Method
• Let’s consider an example for a project which
was supposed to be finished within 12
months, it actually took 18 months to finish
work.
• We are calculating the SV(t) & the SPI(t) at the
end of the project. It will be as follows:
SV(t)= PT – AT = 12 – 18 = -6 months

SPI(t)= PT/AT = 12/18 = 0.67

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 Time Based Method

SV(t)= -6 months SPI(t)= 0.67

• The above information means that the project

had a 6 months delay & 33% of it’s planned
time was wasted.

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 Cost Based vs. Time Based
Cost Based Time Based
Assumptions Compares Cost of planned Compares the Actual time
work at certain date to the elapsed to do a certain amount
Cost of actual work done till of work to the planned time
the same Date. supposed to be elapsed for the
same amount of work.
Schedule The SV output indicates the The SV output indicates the
variance (output) cost of delayed work till a amount of wasted time (Delay)
certain date till date
Schedule The SPI output indicates the The SPI output indicates the
performance efficiency of work based on efficiency of work based on time
Index (output) scope (or Cost)
At the End of the If time delay occurred If time delay occurred
Project SV = 0 days SV = - (x) days
SPI = 1 SPI < 1

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 Cost Based vs. Time Based

At the same Date

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 Application to an example Project
• At the 13th of Oct. 2015 for the example project
• No. of Elapsed days (from project start) (AT) = 338 days
• Cost of Actual Work done (EV) = 30,045,060 $
• Cost of planned work at the same date (PV) = 69,915,599.05 $
• This amount of work done till that date was supposed to be
done by 9th of July 2015,
• So the planned time (PT) = 242 days

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 Application to an example Project
EV= 30,045,060 $
• Based on Cost: PV= 69,915,599.05 $
AT= 338 days
SV= EV- PV= 30,045,060 - 69,915,599
PT= 242 dayes
So, SV = -39,870,539 $

SPI = EV/PV = 30,045,060 / 69,915,599 = 0.4297

• Based on Time:
SV(t)= PT – AT = 242 – 338 = 96 days

SPI(t)= PT / AT = 242 / 338 = 0.716

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 Application to an example Project
• For the equation = Delay= (1-SPI)*Elapsed days
• We actually don’t know a formal reference to
this equation. However we can deduce it’s
logic to a certain extent.

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 Delay= (1-SPI)*Elapsed days

How to use this equation ??

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 Application to an example Project
• Based on the last calculations for SV(t) & SPI (t)
SV(t)= PT – AT = 242 – 338 = -96 days

SPI(t)= PT / AT = 242 / 338 = 0.716

• Let’s apply the equation for the SPI:

Delay= (1-SPI)*Elapsed days = (1- 0.716)*338= 96 days which is

exactly equal to the value of SV(t)

We used the SPI calculated on time basis to recalculate the

delay time (which is the same as the SV)

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 Application to an example Project
• For the cost basis method:
SV= EV- PV= 30,045,060 - 69,915,599
So, SV = -39,870,539 $

SPI = EV/PV = 30,045,060 / 69,915,599.05 = 0.4297

• Let’s apply the equation for the SPI:
Delay= (1-SPI)*Elapsed days = (1- 0.4297)*338= 192 days which
is not equal to the value of SV

• But if applied like this:

Delay= (1-SPI)*PV = (1- 0.4297)*69,915,599.05= 39,870,539 $
which is exactly equal to the value of SV

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 • Where is the Problem ??

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 The Problem is:

• We can use the SPI (based on cost Basis)

to calculate the cost of delayed work, but
we cannot use it to calculate the amount
of delayed time.

• To calculate the delayed time we use the

SPI(t) (based on time basis).

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 The Problem is:

• Based on all mentioned before, The equations

Delay= (1-SPI(t))*Elapsed days
Or
Delay= (1-SPI)*Planned Value

Are useless –but not wrong- as they are just another

method to calculate the Schedule variance (SV)
provided that the proper SPI is used in the proper
equation.

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