Mark Mullaly has a nice post at Gantt Head where he speaks about the three dealy sins of EVM. While I enjoy Mark's posts, and he does bring up good points, I'm not a fan of this approach for some simple reasons:
- EVM is our livelihood on DoD and DOE programs. As program planning and controls we work EV every day. The conjectures made in the post represent very low maturity on the EV maturity scale. See Ray Stratton's The Earned Value Management Maturity Model.
- EV is really a straight foreword process. The minimum concepts of EV are actually that minimal. Read these is see if Mark's post makes sense. When I hear descriptions about the complexities of EV, that are not based on implementations, and miss the foundational aspects, I cringe.
I am always compelled to respond to this type of approach, since the post contains some good ideas, but seems to wrap them in concept that would bring a chuckle on our DCMA validated programs. So here goes a reponse from the field experiences of applying EV on DoD and DOE programs and critically important, surviving DCMA validation and surveillance.
The sins of omission...
...are (relatively) straightforward, in that even the proponents of earned value are (usually) quite up front about what EVM can and can’t do. EVM measures performance against the agreed-upon schedule, budget and particularly scope. It has nothing to do with measuring the quality of what is delivered, and very little to do with ensuring business value.
This is the role of Techncial Performance Measures. See the PMI-College of Performance Management's CPM-500F Techncial Performance Measures. While EV does not address product quality - actually quality is but one Technical Performance Measure - this is far from new news. As far back as 1984 TPMs were part of the performance measurement of a program. In 1995, then SecDef Perry stated
… the basic tenets of the process are the need for seamless management tools, that support an integrated approach … and “proactive identification and management of risk” for critical cost, schedule, and technical performance parameters. ― Secretary of Defense, Perry memo, May 1995
We just haven't been paying attention
The sins of commission...
...are a little more complex ... they largely relate to how earned value is implemented. ... One of the fundamental dimensions of earned value is to understand “work accomplishment”--what is actually done and complete. For anything completely finished or anything remaining, this is pretty straightforward: You get 100 percent credit for what you’ve completed, and 0 percent for what you haven’t started.
It’s when something is in progress that things get a little messy. Projects are famous for hitting 90 percent complete and stopping, and frankly so are activities. What underlies this behavior is the complete imprecision by which many projects get to “90 percent”. We need to understand how this is calculated and what it actually means--and the degree to which it is in any way reflective of reality.
This last paragraph is actually BAD EV. Measures of Physical Percent Complete, Apportioned Milestones, fine-grained (no Work Package crossing more than one accounting period), measures of 0/100, 50/50 and the like at the Task level inside a Work Package are described in the Earned Value Management System Description (EVMSD).
"Completely imprecise" is simply BAD EV. Don't do that. Define what done looks like in units of Physical Percent Complete at the Task level, within a Work Package.
Most egregious of the earned value sins...
...however, must be the sin of deception. Theoretically, earned value is a transparent and open means of tracking project costs. Let’s go back to the fundamental principles of earned value, however, and our identification of what it explicitly addresses and implicitly includes. While cost, schedule and cash flow are explicitly articulated, within the world of earned value, scope and defined work are assumed implicitly to be stable for earned value to work. Here is where the use of earned value goes beyond sin and can get downright immoral. All of the relevance of earned value is predicated on having a stable baseline. However, if you change the baseline, you change the basis of managing the earned value of the project. This is where the deception occurs.
What Mark describes here violates the core principles of EV. You can certainly change the Baseline. It's called re-baselining. The permissions needed to re-baseline only come from one of several conditions - Over Target Baseline (OTD) or a Nunn-McCurdy breach. This is a major event on EV managed system. If you treat re-baselining as a deception, then you get everything coming to you in terms of violating EV principles. It's that simple. This is not a egregious sin, this is a violation of 748-B and the very principles of managing projects with EV.
This approach would be laughable on a DCMA validated program. It would the source of a CAR (Corrective Action Request) - a "ticket" in the speed limit paradigm. Frankly this is simply nonsense. Don't do it. Don't allow anyone to do it. Don't tolerate doing this. Don't believe for a minute this is a sin. It is simply not allowed. If you are compelled to re-baseline, do the simplest thing possible, stop using EV and look for work elsewhere - management is cooking the books.
So In The End
When I read...
A quote that is widely attributed to former British prime minister Benjamin Disraeli is the statement, “There are three kinds of lies: lies, damned lies and statistics.” To this we clearly might also arguably add a fourth: earned value.
I have to ask the question I am always compelled to ask of Mark, of proclaimed PM experts, or anyone making statement like this.
Have you worked a DCMA or credibly managed EV based program?
Because if you have, you'd certainly not be making statement like this. Please read about EV in locations that practice Earned Value. There is new Defense Acquisition Portal. Go there, enroll, install all the Certifications needed to have the site stop asking you to verify, and read about how EV is practiced. Read the articles, download the materials, subscribe the Blog feeds, subscribe to the Journals, Defense Acquisition, Technology and Logistics, Defense Acquisition Review Journal, and most of all join the Earned Value Management Community of Practice and then you can possess the information needed to sort out fact from fiction in the Earned Value Management world.
One Last Suggestion
Take a look at a project that applied EV succesfully. Here's a Case Study from CERN.
