Earned Value Management (EVM)

What Earned Value Management Tells You That Status Reports Don't

Earned Value Management combines three measurements into a single framework: Planned Value (PV) - what you expected to accomplish by now, Earned Value (EV) - what you actually accomplished, and Actual Cost (AC) - what you spent to accomplish it.

From these three numbers, you derive two critical ratios. Schedule Performance Index (SPI) tells you if you're ahead or behind schedule. Cost Performance Index (CPI) tells you if you're over or under budget. An SPI of 0.85 means you've completed only 85% of the work you planned to by this point. A CPI of 0.90 means you're getting only 90 paise of value for every rupee spent.

The Problem With "Percentage Complete" Reporting

On most Indian construction sites, progress is reported as a percentage - "Tower B is 65% complete." But 65% of what? Activities completed? Physical volume poured? Budget consumed?

Without EVM, a project that has consumed 70% of its budget but completed only 55% of work looks "on track" in a weekly review that only checks activity counts. The Autodesk-Deloitte Digital Transformation study (2024) found that Indian construction firms use an average of 8.7 different tools per project, with cost data in one system and schedule data in another. When these systems don't talk to each other, earned value is impossible to calculate without manual assembly.

A project manager in this situation spends an estimated 1.5 days per week reconciling data from different sources - a finding from the same Autodesk-Deloitte study. That's time spent assembling information, not acting on it.

How EVM Works on a Real Project

Take a 24-month residential project with a Rs 200 crore budget. At month 12, the plan says Rs 110 crore of work should be complete (PV = 110). The finance team confirms Rs 115 crore has been spent (AC = 115). But actual physical progress - measured by completed structural milestones, MEP rough-in, and finishing work - shows only Rs 95 crore worth of work done (EV = 95).

CPI = 95/115 = 0.83. The project is spending Rs 1.20 for every Rs 1 of value delivered. SPI = 95/110 = 0.86. The project is 14% behind schedule.

Without EVM, the review meeting discusses "we've spent 57% of budget and we're roughly on track." With EVM, the conversation becomes "we're overspending by 20% per unit of work and we're 14% behind - what's causing this and how do we correct it?"

EVM in Indian Regulatory Context

RERA compliance adds urgency to earned value tracking. Registered projects have committed delivery timelines, and delays trigger penalties and buyer compensation. A project that looks financially healthy but is schedule-slipping can face RERA consequences that don't show up in cost reports alone.

MoSPI's December 2025 Flash Report documented 1,392 government infrastructure projects with cost overruns totalling Rs 5.42 lakh crore. While these are government projects, the pattern - cost escalation without early detection - applies equally to private real estate.