MONTHLY COLUMN:

Advances in Project Management

Progress and performance: The case for extending Earned Value Management

By Darren Dalcher, PhD

Middlesex University
London, UK

Editor’s note:  The series on Advances in Project Management was launched with a Guest Editorial by Professor Darren Dalcher and first article in the December 2009 edition of PM World Today.  Please read that introductory editorial here, where Professor Dalcher explains and sets the stage for articles in this exciting series by leading authors in the field of project management.  Please read previous articles in the series by visiting the archives, beginning with the December 2009 edition.  Each month’s article is introduced by Professor Darren Dalcher, editor of the Series on Advances in Project Management.  Here is Professor Dalcher’s introduction to this month’s article.

Introduction to October Advances in Project Management Series Article

Progress and performance: The case for extending Earned Value Management

Are we there yet?

The dreaded question… Having returned from a family summer holiday I was reminded that regardless of their age, children sitting in a car (and therefore in a bounded environment) appear to be uniquely focused on progress and destination. Many parents will attest that the obsession with the target ensures that the continuous progress checking begins almost at the point of departure and that complications and delays are rapidly brushed aside to ensure the targeted focus remains firmly fixed. This offers an example of a classical control loop which monitors a key parameter by constantly questioning its value.

According to the Oxford Dictionary, progress is the forward or onward movement towards a destination, which also can represent advance or development towards completion or improvement.  Once a project is launched a large part of the project manager’s role is to gather information about the status of the project, interpret that information and take appropriate action. Milestones, progress reports and meetings play a part in providing  visibility regarding progress. Techniques such as Earned Value Management (EVM) are used to inform management decisions on a project by delivering measures that can be used to assess its performance.

The UK’s Association for Project Management, APM Body of Knowledge 5th Edition asserts that “Earned Value Management is a project control process based on a structured approach to planning, cost collection and performance measurement” which facilitates the integration of project scope, time and cost objectives and the establishment of a baseline plan for performance measurement.

Traditional scheduling and budgeting inform management of the amount of budget that has been spent and the progress that has been achieved. EVM in contrast is concerned with determining the value of work achieved alongside the cost of achieving it, thereby providing a performance measure explaining what has been achieved as a result of the expenditure to date. It works by establishing baseline plans which can be compared with actual achievement during the execution of the project. Establishing a relationship between cost and achievement becomes the basis for monitoring and controlling progress, determining performance levels, identifying deviations from the agreed plan s, predicting the ultimate outcomes of a project and making informed decisions about actions required to ensure the achievement of the project targets.

EVM has been in use since the 1960s; however it is normally viewed as an extension of cost measurement and project cost accounting. Other approaches have tried looking at the measurement of time, time performance and earned schedule. Such attempts also manage to change the meaning of some of the basic concepts in EVM. The article by Alexandre Rodrigues attempts to open up a new perspective and introduce an alternative approach and an extended model.

Dr. Rodrigues has been intimately involved in researching and extending the use of EVM and has been influential in shaping the discipline of performance measurement through the use of the EVM technique. The ideas in the accompanying article are taken from his forthcoming book Earned Value Management for Projects published by Gower in the Fundamental of Project Management books series. The purpose of the Fundamentals series is to provide a more comprehensive grounding in key areas related to the discipline of project management. It complements the Advances in Project Management book series by offering definitive and focused treatise of the key areas in the discipline: Each book is written by one of the leading experts in the discipline offering reflections, ideas and insights.

Progress can also represent the development of an area or discipline over time. The project management discipline is indebted to Dr. Rodrigues and his colleagues for continuing to challenge the boundaries of the discipline. Work in this area is concerned with addressing concerns observed in practice and the new ideas presented by Dr. Rodrigues have been applied successfully in empirical settings playing a key part in solving problems and improving our ability to measure performance and improve the track record of project delivery.

Earned value enhances good project management through the development of an integrated baseline planning, monitoring and control technique as well as the delivery of insights which underpin decision making. It is a technique that will continue to evolve and improve. Reflecting on our journey, we may not be there yet, but we now know that the journey looks to be interesting and challenging. Some of the solutions on offer are bound to generate more discussion and stimulate additional debates.  It is hoped that through articles and publications, we can all play a part in this discussion and discover for ourselves new and improved ways for monitoring and controlling our projects. We actively seek and encourage further discussion and engagement. Until we get there, we simply must learn to enjoy the journey…

Darren Dalcher, PhD
Middlesex University, London
Series Editor