Why EVM Fails

Some recommended reading now for anybody attempting to instigate the use of Earned Value in their organisation. Follow the link below to a very candid paper on the pitfalls of poor EV managament and why it is important to get the foundation of processes and culture in place before EV could ever hope to be successful.

http://www.icoste.org/LukasPaper.pdf

Joseph makes a few great points, particular in the latter part of the paper in is 'Top Ten Mistake' section. I've seen all of these at some point in the past and I've seen first and what affect they have on the quality of EVM outputs.

I would also like to add my own 11th 'Top Mistake' which relates to granularity.

Break It Down

Even if you find yourself in the privileged position of having avoided Jospeh's 'Top Ten Mistakes', there is a further, less obvious mistake that can, at best, limit the value of the process and, at worst, mislead those reviewing the project into a false impression of project performance.

Successfully running Earned Value is only worth the effort if it is performed at a sufficient level of granularity. Obviously doing so requires an equal level of granularity in cost collection, which comes with its own cultural and procedural issues. Many companies shy away from more detailed cost collection because it increases the burden on direct bookers and increases the likelihood of misbookings.

But these reservations are minimal when compared to the resulting increase in Project control. The increased burden on bookers will be small providing the organisation has a well established and robust booking system integrated with its ERP software. The potential of reduced booking accuracy is a more serious one though and can only be mitigated via:

- Efficient lines of communication to ensure that project teams are aware of the correct booking numbers;

- A well designed booking process that encourages precision;

- Good shop-floor control by the PM and CAMs;

- and thorough analysis of recorded actuals to spot any errors, both with labour bookings and materials.

Once in place, a more broken-down EVM system will provide far better clarity of the condition of the project and will present Project Managers with greater precision of performance data.

This is important because progress on Work Packages (WPs) with smaller budgets will be open to scrutiny, rather than swallowed up in the figures of a much larger area of the WBS; particularly important where these smaller elements exist on the critical path or are otherwise subject to narrow constraints.