Earned Value Management (EVM) in Agile Projects

Earned Value Management
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Jose Daniel Esterkin
CEO, Argentina

Earned Value Management (EVM) in Agile Projects

Many professionals want to adapt EVM to Agile projects. It's easy: in order to calculate EVM values, you need four basic variables at a certain given moment in the project:
- Planned Value (PV)
- Earned Value (EV)
- Actual Cost (AC), and
- Budget At Completion (BAC).
Best practices indicate that you must take a picture of the main EVM indexes at predefined periods of time. For example, for a portfolio of projects, it is customary to calculate SPI, CPI and ETC at the end of each month.

In an agile project, you could calculate all these indexes at the end of each sprint. All you need to do is have PV, EV, AC and BAC at the end of the sprint, and then build all the indexes.
In order to speak the language of money, you should assign a monetary value to each Story Point (let's say US$60).
How can each one of the variables be calculated?
BAC = the sum of all Story Points in the prior Sprint Backlogs and Product Backlog multiplied by $60.
PV = the sum of all Story Points in all Sprint Backlogs so far multiplied by $60.
EV = the sum of all percentages of completion of all Story Points in all Sprint Backlogs so far multiplied by $60.
AC = the sum of all worked hours of all the agile team so far, multiplied by an hourly rate (this xan only be achieved using time sheets in the project).

Source: Agile Practice Guide, PMI Global Standard, 2017, Chapter 5.4: Measurements in Agile Projects.

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