The use of Earned Value to measure program performance is well established. The "earning" of value for the work takes place when physical progress to plan is done. The simple formula for Earned Value (Budgeted Cost for Work Performed) is
BCWP = BCWS x Physical Percent Complete
The budgeted cost for that work BCWS (Budgeted Cost of Work Scheduled) times the Physical Percent complete is the "earned value." This measurement takes place at the time we planned to have a physical percent complete.
That is, were are in terms of physical percent complete NOW compared to where we planned to be in terms of physical percent complete NOW. This measure is not the same as how much money did we spend compared to how much money we planned to spend.
While this process is powerful, there are some missing elements. What is the quality of the product produced at this point in time compared to the planned quality at this point in time. Quality is one measure, but there many others. A more general purpose term is Technical Performance Measure. These are all the measures of the performance - quality, all the "ilities," anything that is NOT cost and schedule.
Here's the current training session from PMI College of Performance Management (the EV college).
This briefing is one part of a large set of training materials given at two conferences a year. One in the DC area and one in Florida. You can find all the presentations at the College of Performance Management site.
There are several critical learning's here:
- Knowing what done looks like means knowing what technical performance measures must be met at what points in the schedule.
- Adjusting performance measures and forecasts of future performance depends on knowing how well you are meeting the Technical Performance goals and how correctly any deficiencies will impact cost and schedule.