Introduction – What is Earned Value – A quick overview
There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system. For the imitator has the enmity of all who would profit by the preservation of the old institutions and merely lukewarm defenders in those who would gain by the new - Niccolỏ Machiavelli, The Prince
For many years the project management techniques that have been used extensively for the management of projects of all sorts, shapes and size: have tended to focus on achieving deadlines by controlling (initially) the use of time and then resources. The most common reports would be centred around “Milestones” showing time based progress reporting of the “Current Status” versus the “Original Planned Status” based on resources used. This of course only showed part of the picture, the use of time and resources whilst being valuable information, did not provide management with a full view of the project, what was missing, was the “Value” of the work done.
The concept of work having a value has been around for over thirty-five years and has been known by a series of popular acronyms, for example: EVA (Earned Value Analysis), CS² (Cost/Schedule Control Systems Criteria), EVPM (Earned Value Performance Management). In spite of software tools being available that would carry out Earned Value computations, it was considered too complicated by most project managers. However with the increasing number of projects failing to meet time or budget expectations, the project management market is examining ways to improve project delivery. Having noted that those projects, which have utilised the EVA method, have actually been successful in delivering the project that the stakeholders expected, the project management community is beginning to make moves towards the use of Earned Value techniques.
However many project managers within the wider project community see earned value as being a method that is mandated by the department of defence. There is now a current move the technique from the government arena and make it available to the wider project market. To this end, the existing definitions of how an Earned Value system should be established are being redefined by Standards Australia. However I have always used the term Earned Value Performance Management (EVPM) and will use it throughout this paper. What is EVPM? It is basically a way of understanding how a project is performing. It is a simple way of progress monitoring and forecasting completion.