An Emerging Enhancement to Earned Value Management

Department of Defense in the 1960s and has shown over the four decades from that time to be a very valuable project management and control system. EVM uniquely connects cost, schedule, and requirements thereby allowing for the creation of numerical project performance indicators. Managers now have the capability to express the cost and technical performance of their project in an integrated and understandable way to employees, superiors, and customers. For all of the accomplishments of EVM in expressing and analyzing cost performance, it has not been as successful for schedule performance. The EVM schedule indicators are, contrary to expectation, reported in units of cost rather than time. And, because cost is the unit of measure, the schedule indicators require a period of familiarization before EVM users and project stakeholders become comfortable with them and their use. Beyond this problem, there is the much more serious issue: The EVM schedule indicators fail for projects executing beyond the planned completion date. Because these problems are well known to EVM practitioners, over time the application has evolved to become a management method focused primarily on cost. The schedule indicators are available, but are not relied upon to the same extent as the indicators for cost. The resultant project management impact from the EVM schedule indicator issues is cost and schedule analyses of project status and performance have become disconnected. Cost analysts view the EVM cost reports and indicators while schedulers tediously update and analyze the network schedule. Frequently for large projects, these separate skills are segregated and, often, their respective analyses are not reconciled. It has been a long expressed desire by EVM practitioners to have the ability to perform schedule analysis from EVM data similarly to the manner for cost. Various approaches to using earned value (EV) for this analysis have been proposed and studied from time to time. However, none of the methods have proven to be satisfactory for both early and late finishing projects. Before discussing the ES approach to overcoming the described cost-schedule dilemma, let us first review EVM. EVM has three measures: planned value (PV), actual cost (AC), and EV. Refer to Figure 1 as an aid to this discussion. The planned values of the tasks comprising the project are summed for the periodic times (e.g., weekly or monthly) chosen to status project performance. The time-phased representation of the planned value is the performance management baseline (PMB). AC …