Abdullah OguzPhD, Assistant Professor of Information Systems| Cleveland State UniversityCleveland, OH, United States
Do you use EVM (earned value management) for monitoring and controlling, or do you use something else? To what extent do you think EVM is effective? Saving Changes...
Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
Aug 03, 2022 9:56 AM
Replying to Mark Warner
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I've seen a few replies herein that state EVM "does not have a quality component" and "ignores... (to a certain degree) quality." I truly don’t understand this. In fact, it feels to me like a misunderstanding of how EVM works. EVM, by definition, is a measure of a project’s progress. This means task completion, which means scope delivery, which in turn means quality being met.
If an element of your WBS is not complete and has not met all of its quality requirements (form, fit, function, performance, etc...) then you cannot take credit for it earning full value. Period. Instead, you must assess it at some amount less than 100% complete. Unless and until the item is fully delivered and meets all of its quality requirements–or is granted a formal waiver against un-met requirements–the earned value reported must be some objective value less than 100%. And once you have that percentage determined, the EVM calculations can be performed accurately. The trick to this of course is assessing an accurate percentage complete.
A properly set up EVM system at the start of a project should include the “rules” to be used for assessing the percentage of compliance. The formal name for these rules is the earned value “technique.” Where people struggle is determining a fair and accurate means of assessing percentage complete that removes human subjectivity from the equation. E.g., if a task is simple, like painting a fixed length of wall, then the value earned is simply a measure of the wall length painted– and accepted by the customer. But most tasks and scope of a project are a bit more complicated than this. Worse, the people assessing the completeness of the work (often engineers, SMEs, and work package managers) are human, and come to the table with their own levels of optimisms and bias.
That said, there are lots of ways to remove subjectivity and improve objectivity. For example, you could assign values with rules like the following: 0%=No Work Started On A Specific Task or WBS Element; 25%=Work Started (i.e., there is real value in the momentum of starting an activity); 50%=Engineer Reports That Work Is Done; 75%=Verification That Scope Created + All Acceptance Testing Performed and Requestion For Waivers Written/Pre-Approved; 100%=Customer Signs Off On Specific Scope Completion, Including Formally Approved Test Results + Waivers..
This is just one method. There a lot of ways to do these percentage assessments, but regardless of the method, quality absolutely has to be built into your EVM system as it’s integral to assessing the true completion of the work.
If you’re not factoring in quality, you’re doing EVM wrong.
"E.g., if a task is simple, like painting a fixed length of wall, then the value earned is simply a measure of the wall length painted– and accepted by the customer."
Even a simple task can be more complicated than one may assume. In the example provided measuring the wall is only part of the 'completion' calculation. Are all the materials on site? Is access in place for the entire task? If materials and access are included in the costs and time (effort) than completion needs to include such. Will quality issues be revealed in the longer term? Typically the customer/client will not sign-off on partially completed work thus acceptance may not be available until well after the 'completed value' is determined.
You are right in that completed value is subjective - even when you assign values (0, 25, 50, 75, 90%). When dealing with many concurrent tasks the 'judgement factor' can be significant, especially when addressing quality.
One way to address quality issues is to set up a Quality Account where a percentage of the project estimated cost and time is assigned for re-work and quality resolution, say 5 to 10% of the initial budget - deals with peeling paint which manifests later in the program.
In order for EV to be a useful management tool it must be timely and, that being the case, not only does one have to determine progress but must do so quickly and repeatedly.
I am not arguing that EVM should not have a quality component, I'm just observing that it typically doesn't Saving Changes...
I've seen a few replies herein that state EVM "does not have a quality component" and "ignores... (to a certain degree) quality." I truly don’t understand this. In fact, it feels to me like a misunderstanding of how EVM works. EVM, by definition, is a measure of a project’s progress. This means task completion, which means scope delivery, which in turn means quality being met.
If an element of your WBS is not complete and has not met all of its quality requirements (form, fit, function, performance, etc...) then you cannot take credit for it earning full value. Period. Instead, you must assess it at some amount less than 100% complete. Unless and until the item is fully delivered and meets all of its quality requirements–or is granted a formal waiver against un-met requirements–the earned value reported must be some objective value less than 100%. And once you have that percentage determined, the EVM calculations can be performed accurately. The trick to this of course is assessing an accurate percentage complete.
A properly set up EVM system at the start of a project should include the “rules” to be used for assessing the percentage of compliance. The formal name for these rules is the earned value “technique.” Where people struggle is determining a fair and accurate means of assessing percentage complete that removes human subjectivity from the equation. E.g., if a task is simple, like painting a fixed length of wall, then the value earned is simply a measure of the wall length painted– and accepted by the customer. But most tasks and scope of a project are a bit more complicated than this. Worse, the people assessing the completeness of the work (often engineers, SMEs, and work package managers) are human, and come to the table with their own levels of optimisms and bias.
That said, there are lots of ways to remove subjectivity and improve objectivity. For example, you could assign values with rules like the following: 0%=No Work Started On A Specific Task or WBS Element; 25%=Work Started (i.e., there is real value in the momentum of starting an activity); 50%=Engineer Reports That Work Is Done; 75%=Verification That Scope Created + All Acceptance Testing Performed and Requestion For Waivers Written/Pre-Approved; 100%=Customer Signs Off On Specific Scope Completion, Including Formally Approved Test Results + Waivers..
This is just one method. There a lot of ways to do these percentage assessments, but regardless of the method, quality absolutely has to be built into your EVM system as it’s integral to assessing the true completion of the work.
If you’re not factoring in quality, you’re doing EVM wrong.
Factoring in quality can be difficult in some industries.
In manufacturing, most of the engineering definition is complete well before there are components to inspect and test. Any quality issues from the design are already baked into the cake. That's part of why the cost of late change is so high. It requires new parts or rework, not just a paper change.
Since engineering and manufacturing are different skills, facilities, and timeframes of the project, EVM is used to measure engineering completion and fabrication/assembly uses different metrics. Discovering issues with how the fully assembled product performs isn't complete until the very end.
But then admittedly...I've typically seen EVM used to observe progress, but do little in the "management" part. Saving Changes...
