Arx Industries

Are You Flying Blind? How to See the Future of Your Project

Published on by James at Arx

We've all been there. You're weeks into a project. The team is busy, money is being spent, and things feel like they're moving forward.

You ask for a status update and get a familiar answer: "We're about 50% done."

But what does that actually mean?

  • Does it mean we've spent 50% of the budget?
  • Does it mean we've passed 50% of the timeline?
  • Does it mean 50% of the actual work is complete?

More often than not, these three things are dangerously out of sync. Spending half the budget doesn't mean you've done half the work. Being halfway through the calendar doesn't mean you're on track.

When you manage a project based on gut feelings and fuzzy percentages, you're flying blind. You can't see the cliff until you're already over the edge.

There's a better way. It's a framework the pros use called Earned Value Management (EVM), and it's the closest thing we have to a crystal ball for project work.

"In God we trust, all others must bring data." — W. Edwards Deming

The Three Questions Your Project Can't Hide From

EVM isn't complicated. It just forces you to be honest by comparing three key numbers:

  1. Where did we plan to be? This is the Planned Value (PV). Based on our schedule, how much work should we have completed by now?
  2. How much work did we actually complete? This is the Earned Value (EV). It's the true measure of our progress.
  3. How much did it cost to get there? This is our Actual Cost (AC), the number staring back from the bank statement.

By simply comparing these three values, the entire health of your project snaps into focus. You're no longer guessing; you're calculating.

The Two Numbers That Tell You Everything

From those three inputs, you get two magical indicators that work like a GPS for your project:

  • Cost Performance Index (CPI): This tells you if you're getting your money's worth. A CPI over 1 means you're under budget (hooray!). A CPI under 1 means you're over budget for the work you've done (uh oh).
  • Schedule Performance Index (SPI): This tells you if you're on time. An SPI over 1 means you're ahead of schedule. An SPI under 1 means you're behind schedule.

Imagine knowing, at any given moment, that "for every dollar we've spent, we've only gotten $0.85 of work done." That's your CPI talking. It's not a feeling; it's a fact.

The Math Behind the Magic

Here are the core EVM formulas that power these insights:

# Core EVM Metrics
# ------------------
# Cost Performance Index (CPI)
CPI = EV / AC
# CPI > 1.0 = Under budget (good!)
# CPI < 1.0 = Over budget (warning!)

# Schedule Performance Index (SPI)
SPI = EV / PV
# SPI > 1.0 = Ahead of schedule (good!)
# SPI < 1.0 = Behind schedule (warning!)

# Cost Variance (CV)
CV = EV - AC
# CV > 0 = Under budget
# CV < 0 = Over budget

# Schedule Variance (SV)
SV = EV - PV
# SV > 0 = Ahead of schedule
# SV < 0 = Behind schedule

# Example Calculation
# ------------------
Budget_at_Completion = 100000  # Total project budget
Planned_Value = 50000          # Should have done $50k of work
Earned_Value = 40000           # Actually completed $40k of work
Actual_Cost = 45000            # Spent $45k to get there

CPI = 40000 / 45000  # = 0.89 (getting $0.89 of value per dollar)
SPI = 40000 / 50000  # = 0.80 (only 80% of planned work done)

# Forecast: Estimate at Completion (EAC)
EAC = Budget_at_Completion / CPI
# = 100000 / 0.89 = $112,360 (projected final cost)

# Variance at Completion (VAC)
VAC = Budget_at_Completion - EAC
# = 100000 - 112360 = -$12,360 (projected over budget)

From Diagnosis to Fortune-Telling

Here's where it gets really powerful. EVM doesn't just tell you how you're doing right now; it uses your current performance to predict the future.

It answers the terrifying questions that keep managers up at night:

  • If we keep going like this, what will the whole project end up costing? (That's your Estimate at Completion, or EAC).
  • Based on that new forecast, are we still on budget? (That's your Variance at Completion, or VAC).

This is the difference between driving by looking in the rearview mirror and having a real-time GPS map of the road ahead.

Your Free Project GPS Is Ready

I know what you might be thinking. "This sounds great, but I don't have time to learn a bunch of complex formulas or buy expensive software."

You don't have to.

I've built a simple Google Sheet that does all the heavy lifting for you. You just plug in four simple numbers, and it instantly calculates all 12 of these powerful metrics, complete with color-coding to show you what's good (green) and what's not (red).

It's your on-demand diagnostic tool and your project fortune-teller, all in one. No strings attached.

Stop flying blind. Get the clarity you deserve.

➡️ Click here to get your Free Project Health Calculator (Excel) ⬅️

Make a copy, plug in your numbers, and see the truth about your project in minutes.