Key Performance Indicators (KPIs)
So what you need for EVM is a schedule and an estimate. Then you measure progress and collect actual cost. Provided these values are available at the end of a reporting period SAP can calculate these performance indicators (for all WBS Elements). For some ideas on how to ensure they are, we have prepared a small guide you can use to quickly improve your end-of-period reporting.
Schedule Variance: SV = EV - PV (SV > 0 means ahead of schedule)
Schedule Performance Indicator: SPI = EV / PV (SPI > 1 means ahead of schedule)
Of course the major work for controlling the schedule will be done with the scheduling system (e.g. critical path). But the SV and SPI values include all the "small" tasks outside of the critical path that are often out of focus in early project stages. Therefore these indicators provide valuable additional schedule performance information.
Cost Variance: CV = EV - AC (CV > 0 means cost below estimated)
Cost Performance Indicator: CPI = EV / AC (CPI > 1 means cost below estimated)
In all these indicators only cost is used as input. But if there are cost variances then the reason can either be that the unit rate of a resource was different than estimated or that the consumed quantity of the resource was different. It is therefore important that the cost is estimated using the correct (current) rates. If this is the case then any cost variance indicates that different quantities were consumed compared to the estimate. Or in other words the performance didn't meet the plan. The SAP Controlling module (CO) can only provide you with these indicators. But the modules where the AC were derived from (e.g. “MM” – Material Management or “HR” – Human Resources) contain all the detailed quantities and can be used to drill down and check the man hours or material consumption in detail.
Read more about Forecasting.