Talk:Earned value management

message: I think this is a superb article, however I have a suggestion which I think might improve it a bit - I would however welcome other opinions on this.
My suggestion is based on my understanding of Earned Value being a measure which is first and foremostly aimed to provide key stakeholders & sponsors with regular empirical data about the progress of a project, which will enable them to make decisions such as deciding when to stop a project or demand a replan and a revised budgetary forecast.
In my experience these key recipients of this information will not be specialists in the technical aspects of project management such as EVM, and need to understand what EVM offers them 'in their own language' - i.e. in terms that a typical business manager might understand & relate to.
In simpler words, I think an explanation of EVM in layman's terms would be useful, beause the layman is actually the real customer of EVM.
Why is this?
My experience is that reporting of project progress from project managers and project teams is potentially unreliable - because the PMs and their teams are reporting on their own progress and productivity there is a risk that they will err on the side of optimism, only report successes and attempt to hide failures, risks and issues in the hope that they can be sorted out 'behind the scenes' without alarming sponsors & stakeholders and risking stopping the project (& possibly the livelihoods of the PM and team).
My understanding is that EVM effectively cuts through such potentially dubious reporting by exactly clarifying how the project has progressed in terms of cost and delivery, to the extent that it provides an auditable history of the project's progress against a baseline - EVM's real value is that it is the only truly empirical measure of progress vs. plan which is both measurable and indisputable, and that is why the SOX legislation in USA has effectively made EVM a mandatory requirement for all projects undertaken by USA corporations (and often extended into their non-US subsidiaries). This legislation may well be taken up by other countries.
I think this article would benefit from an introduction to EVM from a layman's perspective, because most of it describes the in-depth technical details of EVM which are of most use to PM professionals who might need to measure & report on EV, rather than the key fundamental business drivers which are important to stakeholders and sponsors who make decisions.
My suggestion for a layman's description of EVM is along these lines;
- the project plan presented by your PM and team is just a forecast - it should be a time-based forecast of both the expected costs of the project and the expected delivery dates of key deliverables. The plan should be baselined to establish this forecast as being that which progress will be measured against. The key elements of the baseline should be clear and understood between all sponsors/stakeholders.
- EVM will give you a clear, precise & auditable measure of progress against this baseline, in terms of delivery and cost. These have to be viewed in combination, because viewing one without the other is misleading e.g. "We are exactly on budget" (but we have only delivered 80% of what we should have) or "We have delivered exactly to plan" (but it has cost 50% more). EVM measures what has been delivered and at what cost, compared to the baseline. It also provides a revised forecast to complete based on actual progress to date, so that if the project has only delivered e.g 80% of what it should have and has cost e.g. 150% of what it should have, the forecast will be that the baselined cost for the what remains outstanding should be revised to be 25% more time and 50% more cost! So if your baseline was for a 12-month project costing $1M, EVM will forecast a 15-month project costing $1,5M - this will directly impact the business case and may require action.
- the basic principle of EVM is to use hindsight to provide foresight - to revise your forecast of the future progress of your project vs. the baseline based on the actual progress of your project to date.
- EVM is a good thing, but it is only as good as the data provided to it. There is considerable potential for error in the practicalities of capturing the basic data of completion of deliverables and costs, e.g.
     - development of software may be described as completed, but independent testing of software may prove that considerable rework is required
     - actual costs may appear be captured, but some costs may be deferred until later (e.g. cross-charges of resources between departments) and therefore hidden until appearing as a later surprise
- if you don't use EVM, you are ignoring the only true & empirical data available about your project's progress and instead relying on Project Manager/Team reports on progress, which may well err on the side of optimism.
I am not an experienced poster on Wikipedia, and I realise I may have expressed opinions as facts and probably committed some other minor transgressions in this post, for which I apologise and I would also like to reiterate that I think the currect article is a superb explanation of EVM, just not quite aimed at the real customers of EVM.
It should hopefully be obvious that my focus is on making EVM accessible and understood (in business terms) to the people whom I believe are its key customers - the project sponsors and stakeholders who need to make decisions about projects based on EVM. I don't think these people will have the time to analyse and understand the fairly complex equations that make up PV, EV, TCPI etc. - they just need the real lowdown in their owm business language.
That's all folks - please be kind!!
--86.148.144.124 (talk) 01:50, 12 December 2007 (UTC)
replies: text: In yet another small victory for Wikipedia, this article has now climbed to the top of the Google rankings for the search terms "Earned Value" and "Earned Value Management".  --Garrybooker 15:19, 12 May 2007 (UTC)
thread_title:  Suggestion for an Introduction for non-PM professionals 

message: I made a change in the description of EVM scalability.  It now refers to a range of simple-to-advanced implementations of EVM instead of a range of small-to-large projects.  This is because it is possible (and usually quite valuable) to integrated technical, schedule and cost performance on small projects.  In other words, I don't want to imply that small projects necessarily reject full-featured implementations.  If the capability exists, by all means use it. --Garrybooker 21:22, 21 July 2006 (UTC)
thread_title: EVM Scalability

message: This reads like an entire college course in a single article...any chance it can be pruned down to a concise explanation with some references and links? Paul 03:22, 24 August 2006 (UTC)
replies: text: Well, if it reads like an academic paper (to a general audience) it might be because of the formulas and acronyms.  If this is what you meant, I agree completely.  I hope it isn't because of the graphics, because I really think graphics make EVM easier to comprehend.  Besides, some people will come to Wikipedia to learn how to read EVM line charts.  I hope it isn't because of the crawl-walk-run approach to describing technical-schedule-cost integration because it is written to make EVM accessible to a general audience.  So without more specific recommendations, I assume the problem is the formulas and acronyms -- they are a common barrier to understanding and acceptance of EVM essentials.  If anybody would like to second the motion, I will move formulas and most of the acronyms to a separate article. But they should not be removed from Wikipedia.  Also, changing the outline structure (outdenting Section 5 subsections) may have been unintentional, so I'm restoring it; the narrative flow is better with the indented outline structure.  --Garrybooker 02:34, 25 August 2006 (UTC)

text: My pleasure, Peter. /Garrybooker 16:47, 18 April 2007 (UTC)
thread_title: Article

message: The word "value" in Earned Value has nothing to do with the perceived value of a project.  The English word "value" has many meanings, and this ambiguity has caused unnecessary confusion.  I removed the following paragraph, because it describes the word "value"  as an abstract notion of "worth."  It is not.  Instead, the word "value" in earned value refers simply to a "numerical value" (a quantity).  In EVM, we use the word "value" in the sense that it helps us compute a percent complete.  Planned Value (PV) and hence Earned Value (EV) are a numerical portion of the total scope of the project -- which is a concrete measure, not an abstract notion.  The so-called "limitation" in this deleted paragraph is the unfortunate result of choosing the wrong definition of the word "value." 
:There is a fundamental implicit assumption in EVM by which planned cost is equated to planned value (PV). This assumption is so basic that even the concept of planned cost does not appear in EVM and cost is simply called value. The rationale for the assumption is that if the cost of an activity (a very concrete measure) were greater that its value (a rather abstract notion) then the activity would not be done. The limitation of this assumption has to do with the fact that in most endeavors the actual value is not obtained from just one part but from the whole. For example, the value of a building's foundation by itself is very little to none: the value obtained from a building is related to all its parts. This is of concern if there is a possibility that a project might be canceled or significantly changed so that the actual value of completed parts of the project cannot be realized.
Another problem with this paragraph is that it assumes value must be expressed in terms of planned cost.  Although cost is certainly the most common unit of measure in EVM, it is by no means universal.  One can use labor hours, or a point system (e.g. story points), percent of total scope, etc.  One can use PV and EV to improve scope management and schedule management without collecting actual costs. (For example, see Figure 2 in this article.)   --Garrybooker (talk) 01:49, 24 October 2008 (UTC)
replies: text: Jgyi, At the end of the project, a cost variance calculation is trivial.  It is simply the total budget (total Planned Value) divided by the total actual cost (total AC).  But then its too late to take any corrective action.  Earned Value Management (EVM) allows us to calculate cost variance while work is in progress, while there is still time to take corrective action.  Instead of using the total budget and total cost, we use the portion of budget and the portion of actual cost associated with completed elements of work.  For every work element that has been completed, we sum the Planned Value (which is the budget), and that summation is called Earned Value (EV) which can be compared regularly to AC.  That's what Figure 3 is illustrating.  Hope this helps.  --Garrybooker (talk) 00:58, 10 December 2008 (UTC)
thread_title: What is "Value" in Earned Value

message: When learning EVM in school, the mutable number of Acronyms for the same item always bothered me, and here this article is the same way.  Some one should go through and standardize the acronyms used in the article and then create a list of alternative acronyms. When I have some time if no one else has done and there is no one in disagreement, I will do it.Zath42 17:27, 15 June 2007 (UTC)
replies: text: I respectfully disagree.  There is only one external link (the .com link) that should be deleted.  The others are recommended government and professional organization references that are easily justified by a person skilled in the art.  I can't find a requirement in WP:EL that says recommended sites must be footnoted to be included in an External Links Section.  Regarding the wikify tag, more specifics in this Talk page would be useful.  --Garrybooker 04:46, 17 July 2007 (UTC)

text: So.... If there are no comments or clarifications, I will restore the top six EVM-related external links (minus the .com link).  I'm not sure what to do about the "wikify" tag, without comments or clarifications, except give it some more time.  --Garrybooker 19:23, 19 July 2007 (UTC)
replies: text: Garyrybooker, read WP:MOS to understand "wikify". One quick suggestion is to make the headings lower-case except the first letter. Also, since you're a volunteer with PMI, it's not considered good etiquette in Wikipedia for you to add your own organization as an external link without agreement from other editors. See WP:COI. For more information related to external links, see WP:NOT. Hope this is helpful. --Busy Stubber 23:23, 19 July 2007 (UTC)
replies: text:  For the record, I am a volunteer for the PMI Tulsa Chapter, and have no conflict of interest (COI) with the College of Performance Management or the PMI parent organization.  Further, I have not referenced any of my own work, so I'm squeaky clean on COI.  I welcome other editors' opinions on including PMI-CPM as an external link.  It is the dot org "home of EVM" so its omission would be obvious.  --Garrybooker 04:05, 21 July 2007 (UTC)

text: I agree with Garrybooker. Solarapex 22:12, 19 July 2007 (UTC)

text: Me too, I honestly think that the links are all ok. Pm master 23:01, 19 July 2007 (UTC)

text: Ok, I've restored the links, even the com is legitimate. Feel free to remove any link that you think is spam, but please explain. Thanks. Pm master 23:17, 19 July 2007 (UTC)
thread_title: Acronyms

message: I've put some tags on this article because it needs some re-writing. The lead reads like an advertisement and uses inappropriate abbreviations and slash marks:
::"Earned Value Management (EVM) is a project management technique that measures forward progress objectively. EVM has the unique ability to combine measurements of technical performance (i.e., accomplishment of planned work), schedule performance (i.e., behind/ahead of schedule), and cost performance (i.e., under/over budget) within a single integrated methodology. EVM provides an early warning of performance problems while there is time for corrective action. In addition, EVM improves the definition of project scope, prevents scope creep, communicates objective progress to stakeholders, and keeps the project team focused on achieving progress."
Also, the latter part of the article tends to read like a set of instructions. This might be more appropriate for Wikibooks than Wikipedia. Hope this helps! --Busy Stubber 03:21, 18 October 2007 (UTC)
thread_title:  Cleanup tags 

message: I cannot see the difference between the two "different" IEAC calculations. Also the difference between IEAC and EAC is not clearly explained. How is Sigma AC different from AC and Sigma EV from EV?
Anyone can help? Thanks.  —Preceding unsigned comment added by 121.76.115.50 (talk) 15:00, 14 September 2008 (UTC)
thread_title:  IEAC equation 

message: A new section An Alternative to EVM has recently been added by an anonymous contributor.  I vote to remove it.  This article is about EVM, not about alternatives to EVM.  If we allow this specific alternative to remain, we are opening the door to literally dozens of alternatives -- some notable, and some not.  Most alternatives will surely violate Wikipedia's policy that prohibits Original Research, or the requirement for notability.    --Garrybooker (talk) 21:53, 10 March 2009 (UTC)
thread_title:  Alternatives to EVM 

message: I made some minor changes:
1) Elaborated more that the concept of EVM was based on Frank and Lillian Gilbreth's concept of "Earned Time";
2) I elaborated more on AACE's contribution to EVM as AACE came before PMI and is the only organization to have a knowledge based credential for practitioners;
3) Based on the published research of Bill Zwerman and Janice Thomas "Mapping the Past to Explore the Future" (2004) and my own PhD dissertation, "Is project management a profession? And if not, what is it?" I removed the reference to project management being a profession (which the Zwerman research put forward and was reaffirmed by my own)
Dr PDG (talk) 13:40, 21 March 2009 (UTC)
thread_title:  Minor Wordsmithing Changes 

message: My experience with EVM comes from 20+ years as a general contractor and one of the reasons I really liked using EVM was because if implemented correctly, it serves to enhance a contractors cash flow when combined with prompt payment clauses in nearly all contracts.  Not one of the textbooks or other EVM references I have ever seen features this extremely important argument as to WHY EVM is good for contractors to use.  EVM can also be used as the basis to establish claims. (As recently as November, 2008, I used EVM to substantiate and collect a claim for additional work AND delays using EVM data)
My question to everyone is how and where should we note this piece of often overlooked information?
BR,
Dr. Paul Giammalvo, Jakarta, Indonesia
Dr PDG (talk) 13:47, 21 March 2009 (UTC)
thread_title:  Prompt Payment Clause 

message: Please PMS into EVM as follows:
Measure progress based on various techniques including milestones, weighted steps, value of work done, physical percent complete, earned value, Level of Effort, earn as planned, and more.
Track progress based on any measure – cost, hours, quantities, schedule, directly-input percent complete, and more
Source: https://www.ecosys.net/reference/progress-measurement/  — Preceding unsigned comment added by 2402:1980:82F1:5983:E402:2313:CC67:9572 (talk) 04:29, 4 October 2020 (UTC)
thread_title:  Progress Measurement Sheet 

message: I'm working on a Wikipedia article on the "Value of Work Done (VOWD)" and I'd like to get some comments and suggestions:
User:Chnodomar/Value of work done
The VOWD is mainly used in Oil & Gas and is similar to the Actual Cost in Earned Value Management. I was facing the VOWD during one of my recent projects and at first didn't know what it was. Extensive Internet research brought almost no results (which completely surprised me).
I'm also not very familiar with writing a new page on Wikipedia, so some help would be appreciated.  —Preceding unsigned comment added by Chnodomar (talk • contribs) 14:05, 28 July 2009 (UTC)
thread_title:  Value of Work Done 

message: I think TCPI_EAC is not useful, it may be confusing. By simple algebraic manipulation it can be shown that (BAC-EV)/(EAC-AC) equals CPI. Or, should it be (EAC-EV)/(EAC-AC)?
BR, Brindis15 (talk) 14:24, 3 September 2010 (UTC)
thread_title:  Why TCPI_EAC? 

message: This section seems unstructured or choppy, a collection of individual sentances jumping about on various issues.  I've added a lead sentance to make the flow a bit better and wonder would the rest be better framed as bullets or can anyone suggest a structure of kinds to order them by ?  I'll put in my own bits of problems with EVM concept at the end of the section, but still would like some organizing concept to say what goes here in what order to what depth. Markbassett (talk) 14:41, 4 April 2013 (UTC)
thread_title:  Limitations 

message: This chapter looks like a personal opinion, thus it has nothing to do within a Wikipedia page:
- No reference cited
- Use of very vague terms: "the vast majority of Systems Engineers" (first sentence)
- Terms of subjective assessment: "complete waste of time", "trick", "Micro Managing technique that adds nothing", "to endure Earned Value"...
On the contrary, as a System and Software Engineer myself, in my opinion, Earned Value is a very helpful technique in project monitoring, especially during the "build" phase (I sensed it becomes less efficient as soon as we enter a "maintain" phase). It does really help reestimating the final cost of a project.
Furthermore, no need to ask people for a "minute by minute" reporting. The AC can be measured without a high level of precision, is works as well.
Whatever the project monitoring technique used (Earned-Value or else), activities need to be tracked, otherwise there is no monitoring which is not acceptable for a project.
The reason for the authors of this chapter sensing Earned Value as a "Micro Managing technique" might rather come from former painful experiences of management.
Thus it is rather a controversy of management in general, but not a controversy of Earned-Value.
I would simply delete this chapter.
Alexis Royer (talk) 23:21, 5 November 2015 (UTC)
thread_title:  Controversy 

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thread_title:  External links modified 

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thread_title:  External links modified 

message: Why is Naira used as a currency example, unlinked and without context? Is Nigeria a hotbed of project management activity? It just seems odd. I was confused enough to try to figure out if it was really an acronym for something. ++Lar: t/c 14:28, 26 October 2018 (UTC)
thread_title:  Naira