Right Sizing Your Earned Value Management System

The concept of obtaining the biggest bang for your buck is not new, certainly there are thousands of managers attempting to maximize their Return On Investment (ROI) every day.  Truly, a smart business will squeeze every ounce of worth out of any good or service purchased; this is just common sense.  The trick is to find the right balance of squeezing those ounces without sacrificing something along the way, such as burning out your resources.  The same is true for your Earned Value Management System.  Implementing your EVMS is similar to a game of limbo; the lower you go, the harder it is to maintain balance.  More details and granularity means more complexity, time, and money.  It costs significantly more to control and maintain very low levels of detail.  Yet if the data exists at higher, summary levels, it won’t yield the details you need to effectively manage and you’ll lose control and visibility of the status of the project.

So how do you find your balance when implementing an EVMS?  The key is in the planning and design of the system.  The level of detail of the EVMS should be commensurate with the organization’s control and reporting goals, as well as the customer’s requirements.  This is one of those instances where you MUST define the rules before you play the game.  A certified EVMS, adhering to the ANSI/EIA-748 32 criteria, will have set requirements and therefore some of the planning and design is fixed.  Variables will include structure, procedures/processes, and the EVMS software tools.  The key in this scenario is to keep it as simple as possible and be careful in your design and software choices.  You can easily add complexity with systems that don’t speak the same language and intricate interfaces will make your head hurt.  Do your research and planning; map out the processes and software—you won’t regret it.

But what about organizations and projects that don’t require a certified EVMS?  Should they toss the whole concept out the window?  I’ve worked in organizations that attempted to implement various aspects of the 32 criteria—or some rudimentary Frankenstein cousin of them in any case.  Sometimes it works, other times it’s so painful you begin to think that implementing all 32 criteria would be easier!

When scaling your EVMS to align with your organization’s goals, remember to make it flexible enough that your company can grow without it blowing up.  By putting a few key elements into place, you can make your implementation easier, and crossing over into a certified system won’t require a painful redesign.  This means setting up the framework for a certified EVMS, but only implementing the pieces you really need right now.  Using the ANSI/EIA-748 Intent Guide, your framework should cover the five areas containing the 32 criteria.  These areas are:

1.     Organization

2.     Planning, Scheduling, and Budgeting

3.     Accounting Considerations

4.     Analysis and Management Reporting

5.     Revisions and Data Maintenance

Implementing only a few elements of each area can give you the ROI you need in order to convince management an EVMS is a good investment.  It will also set you in the right direction if you ever do need to get your EVMS certified.  

In our next Blog, we’ll break down these five areas and discuss which elements are most needed as you begin marching to the EVM drum.  However, you can start looking at the 32 criteria now, and determine which elements seem most useful to your organization.  Your gut feeling may be right on the money.

- Melissa Duncan (About Melissa)

Read the previous posting Weathering the Storm of Cost Variance Analysis

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Earned Value legend as there may be a few of us that don’t yet have this memorized…

PM=Project Manager

PC=Project Controls

CAM=Control Account Manager
CPI=Cost Performance Index

EVM=Earned Value Management

EVMS=Earned Value Management System

EAC=Estimate At Completion 
WBS=Work Breakdown Structure

OBS=Organizational Breakdown Structure
SPI=Schedule Performance Index
IPMR=Integrated Program Management Report