Hello Heisenberg!

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I devoured over the beautiful works in quantum theory a few years back while I was rummaging through the mystical land of quantum mechanics. I bumped into Schrödinger’s cat along the way before I caught up with a precarious bloke by the name Heisenberg. The idea of an impossible dead and alive cat has taught me that a project cannot be both on schedule and delayed at the same time, but it was the madness of uncertainty in Heisenberg’s world that has since set me off in a pursuit of analyzing a similar problem we have in Earned Value Management (EVM). The Heisenberg Uncertainty Principle states that a fundamental limit on the accuracy with which certain pairs of physical properties of a particle can be simultaneously known since the more precisely one property is measured, the less precisely the other can be determined.

As most of us are familiar with, EVM is a project management technique for measuring project performance and progress in an objective manner combining measurements of scope, schedule and cost in a single integrated system in order to provide accurate forecasts of project performance problems. This can be achieved by working with three key project metrics – Planned Value (PV – budgeted cost for work scheduled), Earned Value (EV – budgeted cost for work performed) and Actual Value (AV – actual cost for work performed). EVM essentially projects and converts everything from ‘what you need to do’ to ‘how much time you need’ into dollars and cents so that it can be easily tracked and monitored (your finance department would be delighted to hear this).

An ingenious touch, isn’t it? But, wait a second. Didn’t uncertainty principle tell us that the more precisely one property is measured, the less precisely the other can be determined? Following along this argument, shouldn’t we expect that the more we try to assess a project from a cost perspective, the more we will lose sight of it from the scope and schedule perspectives? Indeed, this was exactly what Walt Lipke intended to address when he introduced Earned Schedule (ES), an extension to EVM, in his archetypical article Schedule is different in 2003. According to Walt, there is a fundamental problem with 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.” What an exemplary Schrödinger’s cat paradox we are looking at. The main reason behind this quirky behavior is, unlike AV, EV has to be equal to PV at the completion of the project making it impossible to determine if the project is behind schedule or not. In fact, due to this reason, both SV and SPI become less meaningful as we progress nearer to the end of the project. In order to complement this shortcoming in EVM, Walt proposes a slightly modified way to compute SV and SPI in the Earned Schedule approach by projecting EV from cost into ES as time value and computing everything in time unit to obtain a new pair of time-based SV(t) and SPI(t). For those who are interested in the details of this approach, you may get everything you need from the Earned Schedule site.

So now we have all these models that serve as good indicators for the health of a project. The key question is – “Do they make us better in predicting project performance?” As much as we would like to encapsulate the whole kit and caboodle in the models, deep down inside, we know that they can never be 100% perfect. Project management is all about change and there are far too many factors that may affect the success of a project. The concern here is therefore, whether we should entrench ourselves so deep into the nitty-gritty of the quantitative models and miss out the whole picture of what project management should be. This is exactly the same concern that Jacques Olivier has on the global financial crisis in 2008 when he commented “The crisis is due in part to all the people who know how to count marbles but have no idea what those marbles mean.” One final word – at the end of the day, all these are just models. We are as blind as what these models can show us.

Posted on: May 05, 2013 01:06 AM | Permalink

Comments (1)

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Good article!

I agree with "We are as blind as what these models can show us." Frequently project managers can get so caught up in the process and the minutiae that we lose sight of the ends, the purpose of the project. This focus on the minutiae can reduce our ability to make good business and strategic decisions about our projects.

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