Earned Value Management (EVM)     

                             

The current performance of any project is the best indicator of future performance, and therefore using trend data, it is possible to forecast cost or schedule overruns at early stage in a project. The most comprehensive trend analysis technique is called Earned Value (EV).

 

Here are some definitions of EVM:

 

Englert and Associates Inc.: “A method for measuring project performance. It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule performance is as planned.”

 

Project Magazine defines it as, “A methodology used to measure and communicate the real physical progress of a project taking into account the work complete, the time taken and the costs incurred to complete that work.”

 

Microsoft Project defines EV as, “A method for measuring project performance. It indicates how much of the budget should have been spent, in view of the amount of work done so far and the baseline cost for the task, assignment, or resources.”

 

NASA defines it as, “An integrated management control system for assessing, understanding and qualifying what a contractor of field activity is achieving with program/project dollars. EVM provides project management with objective, accurate and timely data for effective decision making.”

 

In a nutshell, EVM is an approach where you monitor the project plan, actual work, and work-completed value to see if a project is on track. Earned Value shows how much of the budget and time should have been spent, with regard to the amount of work done so far.

 

 

 

Earned Value (EV) is the most comprehensive and accurate trend analysis technique to project managers today. Using trend data it is possible to forecast cost or schedule overruns at an early stage (as early as 15% to 20% into the project progress). It allows you to have an early warning system to identify and correct problems before the project is due. This will prove to your client that you have a reliable management methodology in place.

 

 

 

Earned Value differs from the usual budget verses actual cost (used by seismic Prime Contractors) incurred model, in that it requires the cost of work in progress to be quantified. This allows the project manager to compare how much work has been completed against how much work he expected to be completed at a given time (from detailed project plan).

 

Earned Value provides the project manager with an objective way of measuring performance and predicting future outcome. This can enable him or her to report progress with greater confidence and highlight any budget overrun earlier. This in turn, enables the management team to make cost and time corrections decisions earlier that would otherwise be possible.

 

 The term “Earned Value” is gaining in popularity around project management circles and with good reason. Today, it is both embraced and shunned, often as a result of a prior experience or stories told “in the hallway.” The opponents will generally cite the cost and effort to make it work and the limited benefit derived from its implementation (a principal reason for a 73% failure rate). The proponents will cite the cost savings to the overall project, the improved analysis, communication, increased safety, and control derived from its implementation.

 

EVM has the ability to combine measurements of scope, schedule, and cost in a single integrated system. When properly applied, EVM provides an early warning of performance problems. Additionally, EVM improves the definition of project scope, prevent scope creep, communicates objective progress to stakeholders and keep the project team focused on achieving progress.

 

Essential features of any EVM implementation include:

 

1.   A project plan that identifies work to be accomplished,

2.   A valuation of planned work, called Planned Value (PV) or Budgeted Cost of Work Scheduled(BCWS), and

3.   Pre-defined “earning rules” (1) (also called metrics) to quantify the accomplishment of work, called Earned Value (EV) or Budgeted Cost of Work Performed (BCWP).

 

(1)    In seismic we  use usually 0/100 rule

 

EVM implementations include many more features. However, the most basic requirement of an EVM system is that it quantifies progress using Planned Value (PV), Earned Value (EV) and compares it to Actual Cost (AC). The criterion for EV and AC is a Cost Performance Index (CPI) and Schedule Performance Index (SPI) for EV and PV respectively.       

 

These initial three steps define the minimal amount of planning for simplified EVM. It requires executing the project according to the plan and measuring progress. When activities are started or finished, EV is accumulated according to earning rule. This is typically done at regular intervals (seismic projects daily).

 

 

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This three-day (24 hours) workshop is the most practical and comprehensive introduction to the many facets of seismic project management you'll find anywhere ...

 

 

Why?

 

 

 it is specifically designed for the seismic exploration industry addressing issues contributing to budget overruns...

 

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Our workshops are designed to cover only features and techniques relevant to seismic exploration projects.

 

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By attending our workshop you will master the most important elements of Microsoft Project software. No matter your level of expertise, our unique workshops will help you learn to manage projects more efficiently and ensure that your seismic exploration projects come in on time and on budget with repeated success.


The Facts are:

Many companies claim to offer "complete project management services", yet 73% of seismic exploration projects are over budget (sometime way over and mostly in pre-recording phase), often resulting in costly litigations while loosing credibility and clients as well.

Why?

 

because none of the 73% of failed seismic projects were managed by using Project Management Best-Practice Processes, resulting in

  • Poor Planning or no plan at all

  • Inaccurate Estimates

  • Ineffective Project Management

  • Loosely Defined Requirements or Objectives, etc.

* * *

When the business unit of the project requestor approves the project it only provides a high-level view and what needs to be done.
It does not provide the totality of the tasks. It is now the project manager's responsibility to uncover the details and complexity of the project, and develop a plan that will document a detailed course of action ensuring successful completion of the project.



By attending our workshop you will learn ...

How to create strong and meaningful project plan and why it is needed (Work Breakdown Structure)

How to estimate task duration using Three Point Estimate Techniques, also known as Program Evaluation and Review Techniques (PERT)

How to successfully launch the plan (Work Packages)

How to control the project progress against the project plan (Earned Value Management)

How and why we close the project and the resulting benefits to you and your clients


                      ... and much more