Planned Value (PV), often referred to as the Budgeted Cost of Work Scheduled (BCWS), is a fundamental concept in Earned Value Management (EVM). It represents the value of the work that was planned to be completed by a specific time. PV provides a benchmark for evaluating schedule and cost performance as the project progresses.

Key Aspects of PV:

  1. Baseline Reference: PV is derived from the project’s baseline, which is a detailed representation of the project plan in terms of scope, schedule, and cost. The baseline is the project’s roadmap, detailing what should be done, when, and at what cost.
  2. Time-Phased: PV is time-phased, distributed over the project’s timeline. For any given point in time, PV tells you how much of the budget should have been spent based on the amount of work planned.
  3. Cumulative Measure: As the project progresses, PV accumulates. For instance, if a project lasts 12 months, the PV at month 6 would represent the total budgeted cost for all work planned to be completed within those six months.
  4. Comparison with EV and AC: PV is used in conjunction with Earned Value (EV) and Actual Cost (AC) to determine the project’s performance. While PV represents what was supposed to be done, EV represents what has been done, and AC represents what it costs to achieve that work.
  5. Performance Indicators: One can determine the Schedule Variance (SV) by comparing PV with EV. If EV is greater than PV, it indicates the project is ahead of schedule. Conversely, if EV is less than PV, it indicates the project is behind schedule.

Implications:

  • Regularly monitoring PV against EV and AC provides insights into how well the project is adhering to its plan. Deviations can be identified and addressed promptly.
  • PV is a proactive measure. Instead of waiting for the project to finish to determine if it was on time or within budget, PV allows for ongoing assessments and course corrections.
  • While PV provides a quantitative measure of planned work, qualitative assessments are also crucial. For instance, why is the project ahead or behind its PV? Are there quality issues, resource constraints, or other factors influencing performance?

In essence, PV is a critical metric in project management, offering a clear view of what was planned versus what’s happening in reality. When used effectively, it’s a tool to help ensure projects stay on track and deliver the expected outcomes.