Voices on Project Management

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Voices on Project Management offers insights, tips, advice and personal stories from project managers in different regions and industries. The goal is to get you thinking, and spark a discussion. So, if you read something that you agree with - or even disagree with - leave a comment.

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Making Earned Value More Valuable

The most powerful — and most commonly misunderstood — measurement of project progress is earned value metrics, the way of measuring actual versus planned progress.

"Earned value" is so attractive because the term conjures positive visions, emotions and expectations on what earned value metrics will do. But in reality, if a project manager does not measure and then present the metrics properly to project sponsors, the numbers can produce unpleasant mood swings, premature celebrations and raging arguments.

I have found that project managers who successfully track project progress with earned value metric share a common practice: They allocate the same effort to the meaningful presentation of earned value and its implementation. Consider these basic tips for making earned value actually mean something: 

1. Qualify activities that earn value. One of the quickest roads to failure is to include all project activities in determining earned value. This can set up the false indication of true progress by incorporating administrative tasks like the kick-off meetings, project status meetings and other activities that are not central to actual progress. To avoid misleadingly optimistic earned value, include only core items when determining earned value — for example, high- effort and -risk activities, and external dependency milestones.  
 
2. Set standard earned value ranges. Another common trap in calculating earned value is allowing optimistic or downright untrue declarations of progress. You've all probably heard, "We are 99 percent complete, and all we have left to do is..." time and time again. 

To avoid this trap, set up conservative ranges of progress completion. For example, you may set a conservative percentage-complete tier of 75 percent if a deliverable is completed, and designate the remaining 25 percent to the approval process by the project sponsor.

3. Clearly communicate earned value to project sponsors. Speaking of project sponsors, one of my all-time favorite earned value moments occurred recently during the first progress status meeting. After several weeks of high expectations around earned value, the project manager stood up and said, "Our SPI is .92." Needless to say, this abbreviated report of the schedule performance index caused a long silence, puzzled looks and furrowed brows among project sponsors. Avoid such tense moments by communicating to project sponsors, in terms they understand, what earned value can and cannot do. Add relevance and context by combining earned value with other project readout content, and tailor your communications to sponsors through visualization techniques. For example, present a graph showing the schedule of planned value against the actual earned value of these deliverables for the project. 

Earned value can be one of the most powerful and revealing indications of true project progress — as long as it is properly determined and presented.

How do you measure earned value? What are your tips in presenting earned value to project sponsors?
Posted by Kevin Korterud on: May 15, 2013 02:39 PM | Permalink | Comments (4)

Finding a Project's Intangible ROI

If you're new to project management, you might be surprised to learn that some projects -- maybe some of yours -- do not generate any actual profits.

That can make it difficult to demonstrate how talented you are as project manager and how great your project delivery team is. So, how can you show you've created value if you cannot show revenue or profits as a direct result of your project?

Look at ROI in a different light. Instead of using profits as a benchmark, consider intangible benefits, such as cost-savings that will result from the project, or a positive swing in public relations or team dynamics

My team and I were working on a project that involved automating a conference room. A user could walk into the room, push a single button and the automation would do the rest. The project didn't generate any profit, but the feedback from stakeholders was 100 percent positive: My team had created an environment that worked as advertised and made users' work lives easier and less frustrating. And that translated to a huge upswing in stakeholder influence.

When we needed buy-in on the next project, the stakeholders were more than happy to offer support. They even understood if the project would affect them negatively (i.e. space being unavailable for use during project, or a feature being disabled for a short time). It may be hard to say that stakeholders' good graces (for example) increased by exactly 42 percent, but it's very obvious when your ability to influence them has increased. Things seem to just run more smoothly.

Have your projects generated intangible ROI? How have your project teams benefited from it?

Posted by Taralyn Frasqueri-Molina on: May 31, 2011 10:54 AM | Permalink | Comments (9)
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