The Alternative to Earned Value Management: it’s called being FIRED!

How does a large corporation, filled with thousands of people and multi-million dollar projects, manage their projects successfully without using Earned Value Management?  What is this wonderful alternative to EVM that allows them to effectively manage projects and measure performance?  Let’s face it, EVM can be terribly cumbersome depending on your contract requirements and system design, so it only makes sense to seek a less painful alternative.  This is my number one question I ask when interviewing for a new job or consulting with a new client.  And the answer is usually the same: they’re simply a bit delusional when defining project success and failure—that is, they don’t even know the criteria for successful project management, let alone how to measure it!  

The danger here is that they are so arrogant that they think they know.  They think it is the same criteria that they use for the rest of their business management.  If a manager is excelling at functional management, that should translate to excelling at project management right?  It’s all management in the end, so why would it not work?  They view earned value software as a necessary (or rather, an unnecessary, but contractually required) evil, instead of a useful tool to help manage projects and add visibility into performance.  For Pete’s sake, these are the same people who think there is nothing wrong with keeping their project costs separate from their schedules!

These companies have been successful with other aspects of their business and they’re riding on the coattails of that success. It seems as if they are operating with their heads in the sand when it comes to new management models for projects. They use traditional business models to manage their projects and then are shocked when it doesn't work as expected.  Once senior management starts paying attention to this problem, the project manager is often removed or fired.  This is their way of holding someone accountable, which they love to do.  Ironically, most of those senior managers fail to see that THEY have not held themselves accountable; they haven’t provided the tools to effectively manage projects.  They don’t understand why comparing the budget to actual cost is NOT sufficient for project management or why additional tools, such as procedures, processes, and earned value software are needed.  They are completely missing the value of the work that was completed, yet isn't progress the number one, consistent requirement of project completion?  Yet, in many organizations I've encountered, the old adages of "that's the way we've always done it" and "why fix it if it isn't broken" are so heavily at play, you'd think it was their official vision statement or mantra!  Doesn't it seem odd to not measure progress?

The problem is that it IS broken but they cannot see it until it is too late.  Comparing the budget to actual cost simply yields a spending variance.  They focus on minimizing expenses and maximizing profit margin—both of which end up being heavily impacted by the project management effectiveness.  However, what is the true cost of poor project management?  Poor client relationships and lost future work, confusion and burnout within the team, inadequate resource allocation and funding requests, unnecessary beatings of the wrong manager, missed opportunities to forecast and course correct early in the project, and lack of visibility into true performance resulting in blind decision making—just to name a few.  In an immature, non-learning organization, this does not bode well for the project manager and his/her job is at stake, as well as their reputation in the project management community.  There is a reason project management is now finally recognized with its own degree program at savvy universities.  It’s a science and an art, separate, but related to business management.

Part of the resistance to implementing EVM is the time and cost of setting up the system.  Especially in government projects that require a certified EVMS.  While it is true that implementing all 32 criteria from the ANSI/EIA-748 can be overwhelming and even a little overkill, even a rudimentary EVMS would allow better project visibility and performance.  The “all or nothing” attitude regarding EVMS does it a terrible injustice.  It CAN be sized according to your needs.  The real role of senior managers is to provide employees with the right tools for their jobs, remove roadblocks to success, and then stay the heck out of the way!

So don’t throw the baby out with the bathwater—EVM is the “it” tool for better project performance.  It’s been around for 60+ years, and continues to prove its success.  There is no viable proven alternative, but you CAN lose your job if you choose not to use it.

Have you ever searched for an alternative to Earned Value Management, and if so, what were your results?  Why do you think many companies resist using EVM in some form?  Check out my next blog, “If it looks too good to be true, it probably IS!!”

- Melissa Duncan (About Melissa)

Editors Note: We generally post twice a month, however for November and December we will be posting once a month and return to twice a month in January 2015.   

Read the previous posting -  5 Points of Failure for an EVMS

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

CA=Control Accounts
CAM=Control Account Manager
CPI=Cost Performance Index
EAC=Estimate At Completion  

EVM=Earned Value Management

EVMS=Earned Value Management System
EAC=Estimate At Completion 

IPMR=Integrated Program Management Report
LOE=Level of Effort
OBS=Organizational Breakdown Structure
OTB=Over Target Baseline
PC=Project Controls
PM=Project Manager
PMB=Performance Measurement Baseline
RAM=Responsibility Assignment Matrix
SPI=Schedule Performance Index
WBS=Work Breakdown Structure