What is earned value in SAP SRD-PRO-PMN - PRO-Project Management?

SAP Term: earned value

• Component: SRD-PRO-PMN

• Component Name: PRO-Project Management

• Description: The value of the money earned for the work produced.

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• Key Concepts: 
  Earned value is a project management technique used to measure the progress of a project. It is a combination of the project’s planned value (PV) and the actual cost (AC) of the project. Earned value is calculated by multiplying the planned value by the percentage of work completed. This allows project managers to compare the actual cost of the project to the planned cost and determine if the project is on track or not. 
  
  How to use it: 
  Earned value can be used to measure the progress of a project and determine if it is on track or not. To calculate earned value, first determine the planned value (PV) of the project. This is the total amount of money that was budgeted for the project. Then, calculate the actual cost (AC) of the project. This is the total amount of money that has been spent on the project so far. Finally, multiply these two numbers together to get the earned value (EV). 
  
  Tips & Tricks: 
  When calculating earned value, it is important to remember that it is not an exact science. The accuracy of earned value depends on how accurately you can estimate both the planned value and actual cost of a project. It is also important to remember that earned value does not take into account any changes in scope or other factors that may affect a project’s budget or timeline. 
  
  Related Information: 
  Earned value is closely related to other project management techniques such as critical path analysis and resource leveling. It can also be used in conjunction with other techniques such as earned schedule and earned value management systems (EVMS). These techniques can help project managers better understand and manage their projects.