2007 AACE International Transactions
EVM.05 Earned Value Management Why Am I Being Forced to Do It?
Ursula Kuehn, EVP
o many, earned value management seems to be a recent requirement, but the technique has been around for a long time. The original techniques were conceived back in the early 1960s during the Minuteman Missile Development Program, back when most of the other, currentlyused, project management techniques were developed. But why, you may ask, if it hasn’t caught on for all of those years, is it being forced on me now? The answer: If implemented properly, it really works! Any project plan is similar to a flight plan that the pilot of an airplane must submit before the flight. The pilot charts a course that points to the destination of the flight. If you ask apilot how often he or she is exactly on the flight plan they will likely tell you that they are on the plan at take-off and at landing, and then they might happen to fly through it. Yet, they all seem to be able to fly to their destination with very few problems. If the plane is not exactly on the flight plan, the pilot can usually steer the plane back. If not, the charts are brought out to develop anew flight plan. Hovering close to the flight plan is what allows the plane to reach its destination. In project management, it’s not being exactly on the baseline of the plan that counts - it’s that you can steer the project team back toward the baseline. Using the tools and techniques of earned value management allows the project team to identify “control areas” around the baseline (like flightcontrol lanes for a pilot) both on the positive side and on the negative side that the project status should stay in to be successful. Borrowing from Quentin Fleming’s selection of the top ten criteria? of the 32 criteria required to be ANSI/EIA-748-A compliant that he believes will get any project to be using earned value management techniques, let’s see how it works. STEP 1—DEFINE THE PROJECTSCOPE VIA A WORK BREAKDOWN STRUCTURE To define the scope of the project’s deliverable, decisions must be made about whether or not a deliverable or service will meet the customer’s need and still fit within their budget. These decisions should be based on the answers to such questions as: • • • • Does the customer need it? Does the customer want it? Will it benefit the customer to have it? Can thecustomer afford it?
• • •
Do other stakeholders need or want it? Will it benefit other stakeholders? Will it enable the project to be executed more efficiently?
The answers to these and other fundamental questions allow the project manager to truly focus this decision-making process regarding “what” is in the scope of the project on true objectives. The most important tool of this processis the deliverable-oriented work breakdown structure (WBS). The decomposition of the scope is what forms the deliverable-oriented WBS into an architectural breakdown of that product or service. The central focus of a deliverable-oriented WBS is the overall deliverable of the project. For example, if you are constructing a building, then the top block of the WBS would be the building. If you aredeveloping software, then the top block would be the major function the software will perform for the customer. My favorite example is building a pond in my yard, where my top block would be “Ursula’s pond.” I would have to develop a business case of sorts to justify why I need a pond. I certainly would have to manage the pond. I know I’ll have to design the pond and test the pond, but the rest ofmy sub-deliverables are going to be the major parts of the pond. To start my decomposition, I would need to perform a requirements analysis. This is a process in itself where the project as a whole and each part of the project are scrutinized to make sure that they meet the need of the customer or stakeholder and, also, that the part fits into the budget. This analysis is like “peeling an onion.”...
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