How do you apply Agile earned value management Agile EVM in financial tracking

Question

Tracking financial performance in Agile projects can be tricky. How can I apply Agile Earned Value Management (Agile EVM) to ensure financial transparency while maintaining flexibility?

Answer 1

Agile EVM merges Agile’s flexibility with traditional cost tracking.

• Use Story Points Instead of Hours – Measure progress based on completed story points rather than time spent.

• Planned vs. Earned Value – Compare expected vs. actual story points delivered in a sprint.

• Monitor Cost Performance Index (CPI) – Calculate CPI by dividing earned value by actual cost to assess budget efficiency.

• Use Velocity Trends – Forecast future performance based on past delivery trends.

Agile EVM helps teams manage budgets while maintaining Agile adaptability.