Lee R. Lambert, PMP

A Founder of the Original PMP® Certification (1984)
PMI® Fellow (2009)

PMI® Professional Development Provider of the Year (2007)
PMI® Distinguished Contribution Award (1995)

10-Apr-2018

An “Earned Value” Approach

Lee Lambert

Have you ever been somewhere that when you got up and walked into the kitchen for a drink of water in the middle of the night?  When you turned on the light it looked like the whole kitchen floor was “moving”?  That illusion of movement was caused by Cockroaches scattering to escape the light!  This has been my experience when suggesting that an organization implement the Earned Value Management System (EVMS).  When I mention it in my workshops project managers scatter like roaches when the light turns on.  Why is that?

When the world was first introduced to the Earned Value approach by the Department of Defense in the mid-sixties it was to achieve an improved way of managing government contractors using one consistent methodology across the spectrum of project types.   The new EVMS (formerly known as CSpec or C/SCSC) provided a multiple criteria based approach to developing and reporting timely and complete decision support information.  It was a great idea at the time, but…….  Like most of the policies and procedures implemented by the government the volume of documentation required grew like an uncontrolled cancer.  Soon contractors were looking for ways to “game the system” so it looked like they were complying with the government requirements.  Was the negative reaction by contractors reasonable?  What is the truth?

Unfortunately, the truth is that the primary reason for resistance is one word: accountability!  With Earned Value contractors are required to prepare “value” based Performance Measurement Baselines (PMB) for reporting progress (or lack thereof), identifying variances, analyzing those variances and developing corrective action plans (if necessary).  Contractors could run but they couldn’t hide from a properly designed EV methodology.   Truth in reporting/managing was the goal and Earned Value created the opportunity to achieve it.  Bureaucracy made it almost impossible to achieve!

 

Earned Value should not be optional.  When you plan a work task and you estimate resources (cost) you have created an EV baseline.  When you execute the work you can measure the difference between your plan and actual.  Herein lies the power of the EV approach.  Determine the delta between plan and actual. Confirm the root cause and the potential impact before you identify any necessary corrective.  Common sense should prevail! Caution: EV data is the equivalent to Sodium Pentothal (truth serum) and only those who fear the truth will ignore the possibilities.  Once EV is given an honest evaluation of the merits, its use will “shine a bright light” on the realities of the project and lead to better (more effective) and more timely decision making.  Visibility and accountability will be achieved!

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2 Replies to “An “Earned Value” Approach”

  1. I agree EVM is a great tool to help identify systemic schedule, or cost issues on a project or program. Even in an Agile environment, Burn Down charts are essentially the inverse of your actual cost (hours) EV chart…instead of showing cumulative cost in hours, you are tracking the remaining cumulative cost (hours).

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