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SPI <=> Critical activities

5 replies [Last post]
Mon, 2005-07-11 07:50
Muhammad Ali
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In earned value analysis, if SPI>1, does this really means that programme is ahead than planned and it’s going to finish earlier than target finish date. Q: What if the work has been completed on some non critical activities which were not planned to start by that time but were actually started and progressed well yielding a financial credit to BCWP . . . and at the same time work was’nt progressed well on the critical path activities eventually slipping the project end date.

Vice versa SPI<1, should’nt necessarily means that project end date is slipping . . because may the work is being done satisfactorily on the critical path activities and some slight deficiencies in progress may exisit in the non critical activities resulting BCWP
In such cases SPI will be in contradiction to the real project finish date.

Note : Assume BCWS is based on the Early dates.
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Replies

Tue, 2005-07-26 08:48
#1
Muhammad Ali
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Thanks Luca and all others for your valuable feedback. Botttom line could be that while dealing with EV (SPI & CPI) one must not ignore the critical path analysis.

Luca further to your last para my usual practive is as follow :

Let’s limit our discussion to SPI only. I have drawn to set of curves Early and Late which reflect my BCWS (Early and Late).

Now quite often in my case

BCWS(Late) < BCWP < BCWS (Early)

So my actual curve i.e BCWP remain in between the loop generated by Early and Late curves. So if from my P3 or the critical path analysis the project end date is not slipping then even if my SPI<1 still I am not reporting any delay.

In my opinion until and unless there is really a delay to the crtical path. . . . then only we must ring the bell. Otherwise during EV analysis if we monitor SPI only on BCWS (Early) and ignore critical path scrutiny then probably from the very first update of the job the project will be slipping, bell will be ringing and ringing and ringing . . . . may be uptill the end of the job and CM/execution team will be pressurized and frustated . . . for no reason !!

And may some silly CM after being blamed by a silly planner could become cost oriented and will try to execute at the earliest something which gives him more and more financial progress ignoring critical activities.
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Tue, 2005-07-26 07:14
#2
Luca Basile
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I am agree with Vladimir.
The SPI and CPI are just project control tools.
Never must be forgotten the importance of the Critical Path analysis.
The scenario proposed from Muhammad is not so remote, in special case for Earned Value analysis done at too high level.
EV has a lot of pitfalls, but is still a valid project control tools, not planning & Scheduling one!

Muhammad the Project performance Baseline you monitor against is based on early dates. I would not like to show the latest dates as people may start to get relaxed telling we have time, we are in the “banana” curve.
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Sat, 2005-07-23 08:34
#3
Vladimir Liberzon
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Yes Akhilesh, you are right. But EV is suggested as integrated cost schedule analysis tool. People think that SPI shows if the project is ahead or behind the baseline schedule. That is the problem. EV limitations should be widely known and EV parameters could not be used as the only project performance indicators, they are about money consumption, not about project performance.
Regards,
Vladimir
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Sat, 2005-07-23 01:55
#4
Akhilesh Shukla, ...
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Ali,

You are right that if we depend only on EVA sitting remotedly the projections may go inappropriate even. but that’s not the case .

My submission is :

The cocept of EVA, although a crude estimate, identifies trends regarding the status of specific WBS.

EVs are used to determine whether costs are being incurred faster or slower than planned. and this never prevents the planner to see actually where the money is going. Rather EVA only provides basis and plateform for further enquiry. EVA, in my opinion, is a tool to avoid sudden shocks.

So if the money is spent on non-critical heads, it can well be traced going in furtherence to EVA.

Regards

Akhilesh
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Mon, 2005-07-11 11:07
#5
Vladimir Liberzon
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I suggested similar examples at Performance Management Symposium and hoped for some discussions. Unfortunately EV gurus prefer not to notice these problems with Earned Value Analysis. It may be applied to large programs, it may produce wrong indicators for projects.
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