• Book Reviews
• Cultural Diversity
• Project Management
• Risk
• Technology

You are here:

1. Home »
2. PM Topics »
3. Are You Busy? First in the Three-Part Series on Scalable EVM

Are You Busy?  First in the Three-Part Series on Scalable EVM

Many people in business today are extremely busy. In fact they are often far too busy, because they don't even have time to reflect if they are really doing the right things. Ask yourself this question: At the end of every work day (or month, or year), are you convinced that you have attended to things that are truly the most important? Most people say that they could use some help dealing with their hyper-busy work life. 

You may be surprised to learn that one of the most powerful ways to deal with the hyper-busy work life is a project management skill, and it is described in the PMBOK® Guide. However, I think it is introduced in the wrong section of the PMBOK Guide, and wrapped in too much complexity. I am talking about the Earned Value Management (EVM) which is described, unfortunately, in the PMBOK Guide chapter on Cost Management. Remarkably, the most fundamental and overlooked benefit of EVM has nothing to do with cost management or schedule management. It is the ability of EVM to improve project focus. I use the term "project focus" to describe when project team members (not just project managers and project analysts) are concentrating their attention on pre-defined priorities, so they are not distracted by other things.

EVM is commonly associated with a rather complicated government-endorsed standard (ANSI EIA-748A), that is not intended for small projects. Thus, EVM is stereotyped as a burdensome cost/schedule control technique that is suitable only for large projects. Many people think that implementing EVM requires (1) a strong top-down executive or customer mandate, (2) sustained senior-management support, (3) expensive software and training, and (4) culture change. Such stereotypes are false. These common misperceptions originate with large EVM implementations, so even the simplest EVM principles are commonly rejected for small commercial projects. More likely, managers of small projects are almost completely ignorant of the simplest benefits of EVM.

In this article, I describe a remarkably simple EVM implementation that has little or no cost burden on projects, yet it significantly improves scope definition and project execution, whatever is the project size. In the U.S. federal government, the current threshold for applying EVM is $20,000,000 or greater, and certain high-risk projects under $20,000,000. While it may be advisable to establish such a high threshold for the full-featured ANSI standard, there should be no threshold for a simplified EVM. There are a great many small projects than large ones, and every project can suffer the curse of hyper-busy team members. Thus, every project can benefit from improved project focus. 

So, the premise of this article is that a simplified EVM (or scalable EVM) can be used to improve project focus on all projects, even very small projects. The example I will use is an article writing project: this series of three articles on Scalable EVM). To many people, a one-person unpaid effort to write a few short articles isn't a "real project." After all, there is no cost constraint and no real project schedule.

That's mostly true, so I will simply agree and call this example a micro project. The premise, then, is that scalable EVM can be used on any size project, even micro projects, and still be well-worth the effort invested. If EVM can work for our sample micro project, it can work for "real projects" too.

The simple spreadsheet shown on this page is a simplified EVM implementation, so the software cost is essentially zero. This graphic represents one-third of the total project, so the entire spreadsheet is quite small. The spreadsheet has only four columns. The first three columns contain user input and the last one labeled "Earned Value" is computed by a simple spreadsheet formula. The column labeled "Scope" is a list of the project outcomes. The ending outcome is called "Article delivered" and there are seven interim steps that define the scope of the project. I'll talk more about how to define project outcomes in a later article; all we need to understand now is that this scope description is comprehensive and all elements are mutually exclusive. The term "comprehensive" means that there are no other outcomes (interim or final) to be included in the project scope. The term "mutually exclusive" elements means that scope of any element has no overlap with any others. If that sounds like a work breakdown structure, you are correct. 

The column labeled "S/F" is how the user defines whether each element of work has been Started (S) or Finished (F). If the flag is blank, it means that the element of work has not been started. 

The column labeled Planned Value (PV) requires just a few minutes of critical thinking, but is very worthwhile. PV is a number that the project manager assigns to each element of work. To keep things very simple, I recommend using an estimate of labor hours for each element of work. It is an approximation for the amount of attention I plan to spend on each item in the list. This isn't clock time; it is an estimate of human attention - the most critical resource in any modern organization.

The column labeled Earned Value (EV) is computed automatically. If an item has been finished, then EV is set to 100% of PV. If the item has been started, then EV is set to 20% of PV. If the item has not been started, EV is zero. Readers who are familiar with classic EVM will recognize this as a fixed 20/80 earning rule. Just one earning rule is all that is needed for this very simple implementation.

That's all there is to this radically simple implementation of EVM. There are no cost performance metrics in this implementation because no actual costs are collected on this project. There are no schedule performance metrics because there is no performance measurement baseline. In fact, there isn't even a project schedule network because this micro project simply doesn't require one. Best of all, there are no acronyms beyond PV and EV. 

This implementation is so radically simple, it begs the question: "Why bother?" Who cares about an EVM implementation that can't be used to control cost or control schedule? The first answer to this question is that defining project scope well is really no bother at all. It is an essential project management skill. Every project, no matter what size, will benefit significantly when its scope is defined by elements that are comprehensive and mutually exclusive. We can be very confident that the scope is comprehensive and elements are mutually-exclusive because I invested just a few minutes of critical thinking to quantify elements of scope,. If I had defined the scope only with words (i.e., without PV), it is very likely that the scope would have been less focused. This is something you should try for yourself. Try defining the scope of one project with words only, and then define the scope of another project by assigning PV to intended outcomes. You will discover that the second project is better scoped and that is no small matter.

Also, using EVM is really the only correct way to compute percent complete. Percent complete is correctly computed as total EV divided by total PV. Any method that uses percent of calendar or clock time or percent of actual cost is an incorrect calculation. In this example, percent complete is 22.9 hrs divided by 37 hrs, or 62%. So the second answer to the question "Why bother" is another question: "What project manager is not interested in knowing the percent complete?"

The third answer to the question "Why bother?" is to think about what I mean by "cost/schedule controls." In classic EVM, much effort is expended to calculate cost and schedule performance indices (which are usually lagging measures) so the project manager can take corrective action. In our simplified implementation, corrective action isn't necessary because I have concentrated my attention on taking correct action. I have used PV as a lead measure of project focus, and have used EV as a real-time measure of project focus. No lagging measures are needed, so none are calculated. Our emphasis on taking correct action, as opposed to taking corrective action, requires only that I share this simple data set with the project team. Fortunately, with small projects, this is quite easy; we need only share the spreadsheet.

Our fourth and final answer to the question "Why bother?" relates to the critical issue we raised at the start of this article: Are you busy, or are you too busy? If you never invest the few minutes of critical thinking to allocate your attention rationally, then you may find your project is hyper-busy. If instead, you invest a few minutes to allocate and prioritize human attention, you give yourself and your team a great gift. The gift is the ability to say NO THANKS to things that are beyond your physical limits of accomplishment, or are out of scope. Any implementation of EVM requires some investment of critical thinking, but when the implementation is scaled to fit the size and complexity of the project at hand, the investment is always worthwhile.

Garry L. Booker

Garry Booker's career covers software engineering, project management for missile defense systems testing, development of infrared surveillance aircraft, and corporate leadership. He has a M.S. degree (Computer Science) from the University of Kansas and a B.S. degree (Computer Science) from the University of Tulsa. He is the President of Project Frontier, LLC, which is currently receiving support from the Oklahoma Center for the Advancement of Science and Technology (OCAST), for the development of a next-generation EVM application. The EVM application combines the concepts presented in this article with web-enabled visualization and animation technology. 

Read the Full Bio »