Likely the most important article on earned value written by Quentin Fleming and Joel Koppelman, Authors of the best selling PMI publication Earned Value Project Management, has been published in the September, 2003 issue of the Harvard Business Review. The article is short, it appears on pages 20 and 21, and is entitled: "What's Your Project's Real Price Tag."
The Earned Value Management System has been taken a hard road over the years. However, the governance and regulatory scrutiny now given to the corporate Financial Statement requires detailed capital-projects public scrutiny. Fleming and Koppleman in this September 2003 Harvard Business Review article summarize the basics of the Earned Value Management System for Executive Management digestion. The EV approach has been much maligned because of the way it has been applied in DoD weapons systems projects over the years. Despite the fact that the basis of EV is simply project planning, allocation to performing organizations and reporting of progress.
A PM World Today Editorial "Earned Value - The Handmaiden of Project Management" postulated that there was much misunderstanding of the Cost/Schedule Systems Criteria which was the progenitor of the current EV management guidance of major US Federal Government Departments and Agencies. The Editorial stated that too much was made of the major metric the Cost Performance Index and not enough of the set of systems management criteria that any self respecting systems management company should have in place.
Glen Alleman in a recent NewGrange discussion thread states Computing ETC
as CPI * "current run rate" * "period remaining" is somewhat
lame. We do it up stairs in "cost estimating" when they need a rough
EAC, but it is almost always wrong, showing us burning hot from the first
day of the FY. In the end ETC is a place holder on EV projects, until the
real EAC can be generated.
http://www.acq-ref.navy.mil/reflib/evm002.pdf is a simple introduction to
the use of EV numbers for predicting EAC and a look at the tool used inside
DoD and DOE for playing with the numbers - WinSight.
For background on the evolution of the EVMS see the Wayne Abba excellent summary in the January PM World Today. "Earned Value has Reached Prime Time"
The Fleming-Koppleman article is targeted to executive corporate management. Anyone interested can read it on the Harvard Business Review website at: http://HarvardBusinessOnline.HBSP.Harvard.edu/
Drill Down to: Harvard Business Review then Contents of current month September, 2003 and the Forethought article: "What's Your Project's Real Price Tag". Note: as with all HBR articles, there is a small charge to receive a copy of the article.
For your further research into the EVMS a number of other references are available on the PMFORUM through the Google Advanced Search. That is, Google will restrict your search to pages within the PMFORUM. Simply go to the [Google Advanced Search] page and insert "Earned Value" and in the domain box "www.pmforum.org" without the quotes and you will have a select list of PMFORUM pages which highlight EVMS.
I recognize the value of the output metric of an Earned Value Management System, that is the Cost Performance Index(CPI). Fleming and Koppleman categorically state that "Earned value management can accurately predict a major project's final cost- years before completion. I would like to hear from practitioners who have implemented an EVMS both in public agencies and private industry to validate the Fleming-Koppleman "CPI value" thesis in other than a hot house and not for profit DoD environment.
If you are new to the subject of Earned Value or would like a basic review of the Earned Value Management System I recommend the PMI publication "Earned Value and Project Management" (Second Edition) by Quentin F. Fleming and Joel M. Koppleman. My recommendation on the dust cover of the book was:
"A refreshing review of the basics of project performance management and a must read for corporate managers who want to know if project objectives will be met."
David H. Curling
President
LODAY Project Management International
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