Get More Out of Your Earned Value Management System

Earned Value Management (EVM) requirements can seem like an endless list of rules to follow and squares to check.  It’s easy to get lost in the details and lose sight of the benefits of having an EVMS.  Since you’re spending the time to set up and use your EVMS, take time to make sure you get the benefits of your investment.  Here are some areas to focus on to make sure you’re getting the bang for your buck.

Strengthen your Schedule

EVM uses a Work Breakdown Structure (WBS) to organize project work into deliverable-oriented manageable sections.  The Organizational Breakdown Structure (OBS) is the hierarchical structure of the team that will perform the work.  The intersection of these 2 structures form the control accounts, with one responsible group assigned to each section of work.  Take the time to create your control accounts BEFORE defining your schedule.  Use the control accounts to identify only those activities needed to complete the scope and to ensure only one manager is responsible for the work.  Break the scope into activities with defined, measurable end points so you can easily determine activity completion. Where possible, break long activities into several smaller activities linked together.

Pick the Right Earned Value Technique (EVT)

When selecting the EVT for each activity, pick a technique which will accurately reflect the progress on the activity. Objective measures are preferred over subjective measures.  For short activities spanning one or 2 update periods, use a fixed formula technique.  For activities spanning 3 or more update periods, use weighted milestones if possible.  Percent complete can be a valuable technique if the percentage can be tied to physical progress on the activity, such as number of bricks laid or linear feet of trench dug, but loses some of its value if based on manager opinion.  To avoid this issue, select another technique or define the rules for determining percent complete on this activity.

The apportioned technique is often overlooked but can be a powerful tool for determining earned value on intangible activities.  For this technique, the activity earns value in relation to another activity or set of activities.  Inspection activities often use apportioned techniques, and earn their percent complete at the same rate as the activity they are inspecting.  For any activity using the apportioned technique, always check to see that the apportioned value will realistically reflect progress on the activity.  For activities that are duration based and produce no tangible measurable outcomes, use the level of effort technique. This should be the technique of last resort, since it will only show cost variances.

Monitor your Measures

Even the best EVMS loses its usefulness if it’s not operated correctly. Status should be measured objectively, and verified if there are questions.  Here are some common status errors that offer a short-term fix but hide the true project status:

  • Padding the Schedule – Activity durations and lags between activities should reflect the true estimate of time required to do the work. Contingency to accommodate risk should be shown in a separate location.
  • Creeping Percent Complete – Activities using percent complete technique should not automatically increase the percent every reporting period but should reflect the true activities’ progress.
  • Low Hanging Fruit – The schedule activities should be worked in the planned sequence. Check to see if problem activities are skipped to maintain project performance, this hides the problem and results in inefficiencies.
  • Questionable Quality – Make sure any activity products meet required specifications before activities are marked complete.  Otherwise, the cost of rework is pushed forward and performance impact is delayed.

Go for the GGo-For-the-Goldold

With a little more time and attention, you can upgrade your EVMS from a sy
stem  that passes the compliance checks to a system that provides real data for managing and controlling your projects. Turn your EVMS into a useful tool, and you may wonder how you ever got along without it.  You’ve already spent most of the time and effort to set up the system, why not go for the gold?

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Steve Berube

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