Earned Schedule - Schedule performance analysis from EVM measures

By Walt Lipke

USA

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Originally published in Projects and Profits magazine, India (January 2010, pp 53-61)

Abstract

Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing way, cost …schedule …and technical performance. It is a system, however, that causes difficulty to those just being introduced to its concepts. EVM measures schedule performance not in units of time, but rather in cost, i.e. dollars. After overcoming this mental obstacle, we later discover another quirk of EVM: at the completion of a project which is behind schedule, Schedule Variance (SV) is equal to zero, and the Schedule Performance Index (SPI) equals unity. We know the project completed late, yet the indicator values say the project has had  …perfect schedule performance!!  A senior executive receiving the project performance report, minimally knowledgeable of EVM, cannot understand why he has an angry customer screaming, “Your product delivery is late!” This paper discusses the dilemma with the EVM schedule indicators, SV and SPI. A method for resolving the problem is presented in the paper. It is shown that the result from the method is schedule indicators having the same behavior as those for cost.

Foreword

This paper is a re-publication of my seminal article on Earned Schedule (ES) [Lipke, 2003]. Although the knowledge and use of ES has grown immensely and spread globally over the last eight years, the method remains unknown to many. The article is intended to raise the curiosity and interest of those who are unaware of the method and further expand the uptake of ES.

From 2003 until the present much has happened. For those applying ES, the method is broadly considered to be a significant advancement to the practice of EVM. ES has propagated across the world, including the USA, Australia, United Kingdom, Belgium, Spain, Canada, India, and other countries, as well. It is being used across all industries applying EVM for all sizes of projects. Furthermore, the method is being used in research, instructed in some universities, and is included in recent project management texts and the newer EVM analysis tools. Presently an ES appendix is being prepared for inclusion in the PMIÒ Practice Standard for Earned Value Management.

The measure of ES has provided analysis and forecasting capability to those using EVM, until now not believed possible. Parallel to forecasting final cost using EVM measures, ES facilitates a simple calculation for the forecasting of project completion dates. Additionally, another measure has been derived from ES, “Schedule Adherence.” This measure, in turn, has provided the capability to perform detailed analysis, yielding identification of process constraints and impediments and specific tasks having the likelihood of future rework. Additionally, calculation methods have been developed recently for determining the value of the out of sequence work and the rework cost caused by imperfect schedule adherence. These advancements are not addressed in this article; however literature is freely available for your study and exploration at the Earned Schedule website, www.earnedschedule.com.

As you will see in reading the article, the concept of ES is very straight forward. It is not difficult to grasp. Furthermore, if you are presently using EVM in your approach to project management, there is almost insignificant effort required to add and utilize the capabilities offered by ES. I hope with this preface that you are inspired to read on.

More…

To read entire paper (click here)

 

About the Author Walt Lipke Author   Walt Lipke retired in 2005 as deputy chief of the Software Division at Tinker Air Force Base. He has over 35 years of experience in the development, maintenance, and management of software for automated testing of avionics. During his tenure, the division achieved several software process improvement milestones, including the coveted SEI/IEEE award for Software Process Achievement. Mr. Lipke has published several articles and presented at conferences, internationally, on the benefits of software process improvement and the application of earned value management and statistical methods to software projects. He is the creator of the technique Earned Schedule, which extracts schedule information from earned value data. Mr. Lipke is a graduate of the USA DoD course for Program Managers. He is a professional engineer with a master’s degree in physics, and is a member of the physics honor society, Sigma Pi Sigma (SPS). Lipke achieved distinguished academic honors with the selection to Phi Kappa Phi (FKF). During 2007 Mr. Lipke received the PMIÒ Metrics Specific Interest Group Scholar Award. Also in 2007, he received the PMIÒ Eric Jenett Award for Project Management Excellence for his leadership role and contribution to project management resulting from his creation of the Earned Schedule method. Mr. Lipke was recently selected for the 2010 Who’s Who in the World.  He can be contacted at waltlipke@cox.net.