It seems that the difference between planned value (PV) and earned value (EV) is a project’s way to determine whether or not it is on track on a financial level. If a project is budgeted at $5 million with a 5 year duration, then its PV and EV fall under the same date and time in order to compare the two variables. At 2 years, the PV will therefore be $2 million, and if the EV is below that amount, then the project is simply behind schedule. On the contrary, if the EV is above $2 million, then it will tell upper management that their project is ahead of schedule and perhaps improvements can be implemented with the surplus budget. Another variable that is used in project management that sets PV and EV as a ratio is the schedule performance index (SPI) in that SPI = EV/PV (1). Similar to scheduled variance, a SPI value greater than 1 is an indication that more work is being done than initially planned while a SPI below 1 states that the work being done is not meeting expectations. SPI is really just an indicator for the current work rate at any given time, but does not determine if the project is ahead of schedule or not.

One main question that goes more in depth with a project’s values and variances is how are these values (EV, PV, etc) determined or measured? How is the monetary value of a project measured at any given point in time in terms of budget and percent completed? What if a company has a project that is halfway complete, but decides that it no longer wants to carry the project even though it has an EV of $1 million. Is it possible for the company to sell what they have to another company for its EV value? If so, is it likely for there to be conflict between companies in determining a project’s EV?

Reference
(1) Project Management Institute website