ABSTRACT
Purpose of this paper:
This paper was written based on the occasionally heated debate debating the differences between the way the US Government uses earned value management compared against the way earned value management is used by small to medium sized entrepreneurial contractors.
Design/methodology/approach:
The paper was based on using the Harrison Assessment Behavioral Profiling Instrument, modified to assess the behavioural profile of “successful” project managers.
Findings and value:
This is a benchmarking piece of research based on the US National Defense Industrial Associations (NDIA) ANSI 748 A- Standard Earned Value Management Intent Guide.
http://www.srs.gov/general/EFCOG/02GovtReferences/03NDIAANSI/NDIAIntentGuide.pdf [1]
Research limitations/implications:
As this was only a comparative study, relying on anecdotal evidence, there needs to be a more structured, robust study to validate the initial findings.
Practical implications:
Given that the US government as well as many European governments are for all intents and purposes, bankrupt, how they exercise their fiduciary obligation to get the most possible value for the taxpayer’s money is of critical importance. While Earned Value is only part of the analysis, it forms an important element to ensure that those who are planning and developing projects are realistic in their estimates AND that the contractors deliver what was specified in the contract documents. Earned Value provides clear accountability not only for project managers, but program managers acting as or on behalf of project sponsors.
Originality/value of paper:
It is believed this is the only published research of this nature, comparing private sector vs governmental approaches to using Earned Value.
Conclusions:
The paper concludes with 2 Actionable Items:
- Link earned value directly to contractor payments (cash flows). Ironically enough, earned value and payments have gotten divorced from one another.
- A “scalable” version of Earned Value needs to be developed that matches the level of effort to create, track and monitor a project using EVM to the size and complexity of the project.