This is going to be brief as it really is simple.
If you attempt to implement EVM but haven’t got the basics sorted out you’re in for a number of surprises:
- You’re going to waste money on collecting irrelevant data
- Your project will (yes, will) fail.
Let’s figure out why by using some basic math.
EVM requires some basic input which includes the following:
- Planned Value (aka Budgeted Cost of Work Scheduled (BCWS ))
- Actual Costs (aka Actual Cost of Work Performed (ACWP))
All other esoteric EVM calculations are based on the above basic input parameters. Now, the Actual Costs represents a reality, based on a physical collection of information from the project cost control records (salaries, other procurement costs, etc). This leaves the Planned Value which, using simple terminology, represents the project’s projected costs. So if your projections are wrong none of your subsequent calculations are going to have any credible value what-so-ever. Don’t even bother opening your spreadsheet and an least keep your energy consumption down.
So if your budgets are limited (as they most probably are), don’t waste your time on introducing EVM as a first step in implementing your command and control strategy. Rather, lay the foundations for obtaining credible estimates. If you have credible estimates, even without having EVMS in place, you are already well down the path of achieving much greater levels of successfully completed projects.
Seriously, just think about it!
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Pingback: Shim Marom
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Shim,
The critical aspect of EV is not Actual Cost (ACWP), but Earned Value (BCWP). BCWP = BCWS x \Physical Percent Complete\ The actuals come into play when the budget is considered, but measures actuals does not measure the project’s performance, only the expenditure of budget.
Expenditure of budget as a performance measure is only used when the work is Level of Effort.
Glen, no disagreement here, the point I was trying to make is that the BCWS is a figure that is based on an assessment requiring level of accuracy, without which your whole EV calculations can be thrown out the window.
Shim,
Yes accuracy is needed. But decisions using EV best serves it’s role for schedule variance. The units of measure of EV are Dollars and Time Money except when there is a 1:1 relationship.
So measures of physical percent complete BCWP = BCWS x “physical percent complete” is how to get accurate use of EV.
This is the motivation for Earned Schedule, developed by Kym Henderson (Australian MoD) and Walter Lipke (US FAA), http://www.earnedschedule.com.
Hey Glen, I might be missing the point you’re making. Are we in agreement that unless there’s relative accuracy in the BCWS (and obviously in the identification of the Physical Percent Complete) then the whole BCWP turns into a theoretical discussion?
Pingback: Shim Marom
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Pingback: John Bauer
Shim, I can’t say I’m an expert on EVM or could even fathom jumping in on the conversation you and Glenn are having, but I have worked heavily with solution delivery teams enough to have a worth technical work estimation approach to help with the planning aspect you mention. I’ve written up my approach here:
http://bit.ly/9BFf18
Hi John, I’ve read your post and must admit you write in a very clear and understandable way. I am going to make one or two comments on your original post so see you there…).