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EVM Myth #3: Earned Value Management is Too Rigid
January 23, 2009 | Author: PM Hut | Filed under: Project Plan Development, Scope Management
EVM Myth #3: Earned Value Management is Too Rigid (#3 in the series The Seven Deadly Myths of Earned Value Methods in Project Management)
By Keith Custer
Given EVM’s emphasis on strict, detailed up-front project planning and quantifying of expected results, many PMs have promoted the misconception that EVM is a “rigid” tool best suited, for example, to large-scale construction projects. Our experience is contrary.
In fact, EVM is extremely flexible, and can easily accommodate even major scope changes – with the added benefit of immediately reflecting their effect on the project’s costs, schedule, and performance. All of the basic EVM constructs can be modified “on the fly” without invalidating the data that has already been collected. Skeptics might note that EVM has been widely (and successfully) implemented in the defense sector, where contractors are often building something completely new and untested with technology that may not have even been developed yet! In many of these projects only the near-term scope is known and the details of the later work only emerge years after the project is underway. If EVM works for these risky, R&D-heavy types of projects, then it can also be employed effectively in the more mundane day-to-day work of the typical medium-sized private company.
The trick perhaps to enjoying a “flexible” EVM implementation comes from developing a robust and flexible work breakdown structure (WBS) to help scope the work and set up the EVM for any given unique project. If the WBS is set up correctly PMs will find EVM to be a powerful and flexible set of tools for project management.
Myth 3: Earned Value Management is too rigid – is busted!
Keith Custer, PE, is an electrical engineer with over 30 years of consulting and management experience and is an expert in project management and the use of integrated cost and schedule techniques. He first learned about Earned Value in the 1970s, when it was still new, and has advocated its use ever since. He teaches a monthly 3-hour online training class in Earned Value Management as well an in-depth eight-module EVM tutorial (offered weekly on a rolling basis) and several other classes at www.CusterConsultants.net
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3 people have left comments
Hi Keith,
Enjoying your articles immensely!! Keep up the good work.
About the only thing I would add is a warning that making changes to the scope results in some pretty bizarre looking S curves, and requires frequent rebaselining if the S curve is to mean anything.
For those looking for more information, Dr. Joseph Orczyk wrote a chapter in AACE’s “Skills and Knowledge of Cost Engineering, 5th Edition” https://www.aacei.org/PortalTools/Shopper/ProductDetail.cfm?ProdCompanyPassed=1&ProdCdPassed=1-1545-02 that details several approaches to implementing Earned Value under conditions where the budgets are variable or changing.
Thanks again for the good articles… Keep them coming.
BR,
Dr. PDG, Jakarta
Great stuff here! I am so tired of people complaining about the increased workload of EV. With a Program Manager armed with even the most basic understanding of Earned Value, your program can be both valuable and not overly cumbersome. Making sure you have the right team in place is the most important part.
Keith, I think you comment is confusing the EVM system and the application of that system on project. A flexible WBS may help an individual project but does not make the EVM System more flexible. Maybe it is my point of reference since I work for Deltek and provide EVM Software, but let me explain my comment.
An EVM System is the set of procedures and practices that are used to provide an EVM capabilty in project management. It commonly includes an automated product to support the calculations, but it is not necessary.
I think, what makes a system too rigid is the lack of choices. If your documentation only allows 2 EV measurement techniques, that is too rigid. If you system descripiton says you must use a defined WBS to x levels, that is too rigid.
On the other hand if it says you have to have a WBS with a description of the work at each level and it is changed only by an approved change order, that is not rigid, that is effective management and change control.
I recently heard the VP of Project Performance at SAIC (MS. Kathleen Hedges) describe the standard EVM system that is used for all projects. But those requirements are at a high level so each project has some latitude to set up project specific desk instructions that may vary from the company standard. By having a company standard, they get greater efficencies, the ability to view all projects together with common metrics and everyone understands what it means without being retrained.
I will summarize that EVM is not too rigid. The way it is implemented may cause it or any other practice to be too rigid.
Mark