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4 Persistent Myths About Earned Value Management

Myths are great material for the movie screen. The lost kingdom of Atlantis, bloodthirsty vampires, or fire-breathing dragons: these are all the “good” kind of myth and will fill theaters. Of course, everyone usually knows that these myths are just that. The danger is when myths are confused with reality.

When large amounts of money, reputations, and even careers are at stake – such as in the execution of large-scale projects – risk aversion can easily blur the line with fear, and fear is where the “bad” kind of myth can take hold. Even when large-scale projects are failing at an unacceptable rate, change of any kind is intimidating, and the various myths that pervade business thinking can hold back progress.

Consider Earned Value Management (EVM) as an example. It’s proven time and again to be a highly effective forecasting tool, it makes for clear visualization of progress, and it reliably leads to better scope definition. So why isn’t it more widely adopted? Let’s debunk four myths about EVM.

It’s too complicated! Probably the most rampant misunderstanding about EVM is that it is synonymous with the EIA-748 guidelines for compliance with large US government contracts. Interested parties assume that EVM requires a complex and rigid set of processes for all projects, and so they avoid implementing EVM altogether.

Reality: EVM is a highly adaptable methodology. Outside of projects where the EIA-748 guidelines are specifically mandated, the level of effort applied can be tailored to fit the needs of a project. An organization can – and should – apply entirely different EVM processes to the construction of a power plant and a maintenance shed. Apply vigilance where it’s needed.

It’s too costly! The overhead expense – in both financial and labor resources – stemming from the implementation of an EVM solution is an understandable concern for any kind of organization. Undertaking an added (and potentially very costly) expense for performance measurement is often looked upon as an unwelcome additional cost, rather than an investment leading toward cost reduction.

Reality: An entry-level EVM process can leverage information provided by systems most organizations already use for project management and project controls. If you can provide a well-defined scope, a linear time-phased budget, and actual costs, then you require no additional investment to get started.

It’s not sustainable! Again, the requirements of an EIA-748 compliant system imply a laborious level of detail that must be recorded and tracked to ensure an accurate measure of earned value. Organizations new to EVM, or with immature processes, would find this level of detail very burdensome. An EVM system relies on employees to accurately indicate times of productivity to measure progress. Within this data capturing struggle, many find themselves in a minefield of information, having to record data from different sources. Human error becomes a greater risk with this type of reporting.

Reality: At the most basic level, progress measurement can be captured as a basic percent complete from each person responsible for their part of the work. While it is subjective and vulnerable to those notorious “stuck at 99%” situations, it’s an easy way to wade into EVM with no additional work required in the project planning.

It’s not accessible! Another obstacle voiced by many is the unfamiliar terminology and formulas necessary to execute Earned Value (EV) metrics, making it difficult to train employees and difficult to translate findings for executive consumption.

Reality: The workers assigned to specific EVM calculations need only learn a handful of terms, and the formulas in question involve rudimentary math. “How much did we do?” compared to “How much did we think we would do?” is the fundamental question EVM asks. The answer translates quite easily into more descriptive “productivity” language, which is sufficient to capture the attention of stakeholders.

With even the most rudimentary implementation of EVM, organizations can achieve a number of benefits, including comparison against performance baselines, better forecasting, and scenario impact analysis, to name a few. It is a highly flexible, highly adaptable approach to project controls that can lead directly to improvement over time. To achieve the best performance, don’t rely on anecdotes. Do the research. EVM is legitimate.