Earned Value differs from the usual budget verses actual costs incurred model, in that it requires the cost of work in progress to be quantified. This allows the project manager to compare how much work has been completed against how much he expected to be completed at a given point.
Earned Value provides the project manager with an objective way of measuring performance and predicting future outcomes. This can enable the project manager to report progress with greater confidence and highlight any overrun earlier. This in turn enables the management team to make cost and time allocation decisions earlier than would otherwise be the case. It is generally true that past performance is a good indicator of future performance and as such Earned Value is a very useful tool for predicting the outcome of projects in terms of time to completion, cost to completion and expected final costs.