Role of Program Controls for Business

The application of Earned Value is mandated in the US Government for programs greater than $20M. A Validated Earned Value Management Systems is mandated for all programs greater than $50M. The application of EV is many times seen as a "bookkeeping" burden, reporting numbers to the government. The data is up to 45 days old, the integrity of the data is completely dependent on the integrity of the Performance Measurement Baseline (PMB). The overhead to install and operate an EV is often seen as burdensome.

Much is this is myth, like most topics that have not taken a broader view of the beneficial outcomes from the effort needed to deploy the system. Here are some of the beneficial outcomes to the program - at the business operations level - for installing and operating Earned Value Management.

1. Managers receive information at detailed and summary data from the program. This data has one critical attribute that can only be supplied by Earned Value. It is ACTIONABLE. This means that the data shows not only where you been in terms of performance. It shows where you are going if you keeping producing at the rate you are now - the To Complete Performance Index (TCPI).
2. Provides forecasts of "over budget" and "behind schedule" conditions using actual measures from the program.
3. Records the performance data from day one in cumulative and incremental forms.
4. Quantitative data used to produce measurements. In the best implementations, this data is anchored in Physical Percent Complete assessments of the pre-defined Technical Performance Measures of the produced products.
5. Provides a normalized format for reporting performance.
6. This normalized reporting format provides cumulative and incremental data used to further analysis.
7. When probabilistic analysis is incorporated confidence levels and error bands on this confidence come directly from the baseline numbers.
8. Time phased budgets are directly connected to work and the production of products or services. These budgets can then be connected to funding needed by the customer.

All of these business outcomes provide one critical thing for the program - they Increase the Probability of Success. This increase in probability has one direct impact on the program - it increases the probability of staying on schedule and staying on budget. That outcomes goes straight to the bottom line of the program and to the business who is implementing the program.

In the end all projects and programs are about money. Increasing the probability of making more money is beneficial to everyone.