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EVM Myth #6: Companies Need to Change Their Organization to Implement EVM
January 26, 2009 | Author: PM Hut | Filed under: Cost Management, Time Management
EVM Myth #6: Companies Need to Change Their Organization to Implement EVM (#6 in the series The Seven Deadly Myths of Earned Value Methods in Project Management)
By Keith Custer
EVM requires that projects define which organizational units are responsible for each element (work product) of the Work Breakdown Structure (WBS). Usually this is just the organizational project team. The WBS should also include any subcontractors (current or planned) that may be responsible for delivery of some work products. Organizational unit(s) responsible for indirect or overhead costs which might not be normally considered a part of the project team should also be included.
Difficulties arise because some companies have functional organizations that have some responsibilities in their projects. This is OK with EVM, which only requires that these functional organizational units also show up on the project organization chart known as the Organizational Breakdown Structure (OBS). The OBS is a virtual construct for any given project and does not require any changes in how a company is actually arranged. What EVM wants to know is who, or at least which organization, is responsible for delivering which work products.
Another difficulty sometimes arises because EVM wants to roll up costs along the lines of the OBS, which may cross some traditional organizational responsibility lines. Again, the OBS is just a virtual construct for the sake of making meaningful EVM reports and does not require any actual changes to organizations. It is true that some companies might want to study these OBS relationships as there might be better ways of organizing, but no such change is required by EVM.
Myth 6: Companies need to change their organization to implement EVM – 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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