Earned value has a reputation problem. It sounds like something from a PMP textbook — formulas, acronyms, a chapter people skip. Which is a shame, because it answers the two questions every project manager gets asked weekly: are we late? and are we losing money? — with numbers instead of feelings.
Let me explain it the way I wish someone had explained it to me on my first tower.
The lie inside “percent complete”
Say your façade package is worth SAR 2,450,000 and your team reports 62% complete. Sounds fine. But 62% of what — panels installed? Time elapsed? Money spent? These are three different numbers, and the gaps between them are where projects quietly die.
Earned value exists to kill that feeling and replace it with three honest numbers.
The three numbers
Planned Value (PV) — what the programme said you should have done by today, in money. If the plan called for 68% by end of July: PV = 68% × 2,450,000 = SAR 1,666,000.
Earned Value (EV) — what you actually did, in money. You installed work measuring 62% of the contract: EV = 62% × 2,450,000 = SAR 1,519,000. Not what you spent. What you built, priced at contract rates.
Actual Cost (AC) — what it cost you to build it. Wages, materials, cranes, everything. Say SAR 1,490,000.
That’s it. Everything else in earned value is these three numbers being compared.
EV = 62% done × 2,450,000 = 1,519,000
AC = actual spend = 1,490,000
SPI = EV ÷ PV = 0.91 → behind schedule
CPI = EV ÷ AC = 1.02 → profitable
The two verdicts
SPI — are we late? Divide earned by planned: 1,519,000 ÷ 1,666,000 = 0.91. You’re delivering 91 fils of work for every riyal the schedule expected. Below 1.0 is behind; above is ahead. No debate, no “it feels okay” — 0.91.
CPI — are we losing money? Divide earned by actual cost: 1,519,000 ÷ 1,490,000 = 1.02. Every riyal you spend produces 1.02 riyals of contract value. Above 1.0 you’re earning more than you burn.
So this project is behind schedule but profitable — a completely different situation from being on time and losing money, and it calls for a completely different response. Percent complete alone can’t tell those two situations apart. SPI and CPI can, in two divisions.
The S-curve is just this, drawn
Plot planned value month by month and you get the famous S-curve — slow start, steep middle, slow finish. Plot earned value on top of it. The vertical gap between the lines is your delay, visible to anyone in one glance. When a client sees the actual line bending back toward the plan after your recovery measures, that picture argues better than any paragraph.
“Too complicated for our projects”
I hear this constantly, and I understand where it comes from — the textbooks bury the idea under twenty derived metrics. But the working core is what you just read: three numbers, two divisions. If you track quantities against a BOQ, you already have everything needed. Progress % × contract value is EV. The programme gives you PV. Your cost report gives you AC. One spreadsheet row per month.
Start with SPI only if you like. Just knowing, every month, a single number for how far off plan you are changes the conversations you have — with your team, and with the people above you.
The live dashboard in Project Matecomputes SPI and CPI automatically from your quantity logs and draws the S-curve for you — but honestly, even if you never use our tools, start tracking these three numbers somewhere. It’s the cheapest early-warning system in construction.