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Earned Value Management Lite (EVM Lite)?

1 reply [Last post]
Mon, 2012-03-12 13:14
Emily Foster
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Joined: 19 Aug 2011
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Hi Guys,

Here's an attempt to define EVM Lite that is a term widely touted among vendors http://bit.ly/z1MqFS

Let me know what you think.

Emily

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Mon, 2012-03-12 14:44
#1
Stephen Devaux
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Hi, Emily.

Pretty nice and commonsensical article, I think.  US DoD is itself beginning to realize that EVM has serious limitations (in terms of the main EVM purpose to provide an "early warning" system for projects headed for major problems), and is looking to make some major changes in "EVM Heavy".

Some general comments about EVM and the way it is applied:

*  In the past dozen years, there has been a major effort to expand EVM way beyond the major DoD programs for which it was designed.  This means that people who wouldn't know a Critical Ratio Index from a hole in the ground are trying to implement EVM.  And using metrics that one doesn't understand (especially when those metrics distort!) results in worse, not better, PM.

*  Anyone relying on EVM schedule metrics, like either standard SPI or "earned schedule", that ignore THE most critical aspect of scheduling (why, it even has the word "critical" in it!) are doomed to make things worse in terms of project duration, not better.  (And as most organizations outside of plant maintenance, some construction, and a little DoD wouldn't be able to find a critical path with both hands and a mirror, EVM Heavy or Lite is almost sure to make things worse.)

For my clients who have projects large and complex enough to justify EVM but that aren't government contractors, I recommend an EVM Lite version that includes the following:

  1. Weighting activities only by labour hours or labour cost.  (Simplifies the data collection and bookkeeping, as well as factoring out distorting Equipment and Materials costs.)
  2. Separate baselines for schedule and cost, with the schedule EVM on the Late Dates of the schedule to factor out Total Float.
  3. NEVER giving credit for an activity's EV until the reporting period in which it is scheduled. (To do otherwise simply encourages "gaming" the system by doing out-of-sequence work.)
  4. Clearly understanding that "earned value" is a misnomer: it's about cost, NOT value! (And anyone who does not understand the difference between cost and value on an investment is hereby invited to a poker game next Saturday night!)

Fraternally in project management,

Steve the Bajan

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