There are many companies touting the concept of “Earned Value Management Lite” or “EVM Lite” often suggesting that you only need to meet the intent of only 10 or so of the 32 EIA 748 standard guidelines. While this is welcome news to some organizations that are new to Earned Value (EV) and have just won a government contract with an Earned Value Management System (EVMS) as a requirement, it may not be the best way to go.
For large, complex, long-term projects, it is widely accepted that EVM is the most thorough way of performing project management. But this is not where EVM Lite is typically being proposed. It’s targeted at the smaller organizations that have not practiced EVM before, are considered low maturity in terms of project management and that have just won a government contract. These may be Biotech companies, smaller defense contractors or high tech companies.
The EVM guidelines are a set of criteria to which project management systems must address, but they are not a set of rigid rules or requirements. Unfortunately, some companies make them rigid through an improper implementation; ironically, this is often in an attempt to save on implementation costs.
So, any “Lite” version of EVM should come from how the 32 guidelines are applied and implemented, and not by reducing the ones we use to 10 or some other number less than the 32. It simply becomes a matter of how rigorously they are applied.
Any contract requiring full compliance to a validated EVMS, must have the full application and intent of the 32 guidelines implemented. We may call this EVM ‘heavy’.
Contracts that do not require full compliance, or if EVM were self-imposed, then a less rigid application of all 32 guidelines would be employed. Granted some of the 32 guidelines may not be applicable, e.g. those related to material or subcontractor management or indirect costs, so they would be ignored, not because we choose not to follow them, but because they do not apply to the environment.
Example of Earned Value Management Lite
One of the primary areas where EVM could be “Lite” is the level of the Work Breakdown Structure (WBS) that drives the detail planning. Perhaps level 2 or 3 would suffice. Perhaps only 10-20 Control Accounts are needed. Perhaps the Control Account Manager (CAM) responsibility is at a higher level in the organization structure.
Other considerations could be
- The reporting periods could be quarterly vs. monthly.
- The actual costs could be collected at the Control Accounts level rather than the Work Package level.
- The reporting requirements would consist of internal management reports only and at a higher level.
- The work authorization process would be at a higher level with minimal paperwork.
- The baseline change process would be less rigorous and allow the Control Account Manager (CAM) more freedom to adjust to-go plans outside a less rigorous planning window.
Notice all of these examples do not eliminate the need to meet the intent of the 32 guidelines (all of them), but rather the manner in which each is deployed. However they are deployed, there still must be sound discipline in the EVMS or else why do it at all. Don’t diminish the value of EVM by employing only 10 of the guidelines. Rather customize all of the 32 guidelines to meet your company project management objectives.
Example:
A company has a $1M internal project that will take a year to execute. The Work Breakdown Structure (WBS) may only go two levels with perhaps only four level two elements. Each level two may only have three control accounts. We may have one Control Account Manager (CAM) for each level two with their three Control Accounts. Or you could even have the Project Manager as the only CAM for all 12 Control Accounts.
The CAM develops Work Packages and may have a Planning Package for the effort following a key management decision milestone that occurs 6 months out. The CAM plans what resources will work on the Work Packages. We may have a full-up labor rate because we don’t need to breakout Overhead and G&A costs. This project could be built down to the resource planning in Deltek Cobra or MPM in an hour. We could manually keep a simple Microsoft Project schedule and Cobra/MPM plan in sync because we are talking about so few activities and Work Packages.
Monthly status would take less than an hour with only a few Work Packages open at any time. Since we probably only have a few charge numbers, you could manually enter actual costs into an Earned Value Management tool in a few minutes. Run a couple of performance reports and any variances could easily be recognized and explained. No formal customer reporting means no time consuming month-end cycles. We would maintain an updated Estimate To Complete by entering any updates needed to reflect your forecast of future performance.
Management reporting could consist of one or two charts, showing Schedule Variance (SV), Cost Variance (CV), Variance At Complete (VAC), Cost Performance Index (CPI), Schedule Performance Index (SPI), To Complete Cost Performance Index (TCPI), % complete, and an updated forecast of schedule and cost. All of this comes straight out of the tools.
None of the above ignores any of the principles of the EVM guidelines, but applies them in a flexible, reasonable manner and you still realize the full benefits of an EVM project management system.
Summary
If you look at the 32 guidelines, there isn’t a single one that shouldn’t be an integral part of any good management practice. There’s much more that could be discussed here, but the point is to attempt to define “Earned Value Management Lite” beyond the marketing hype.
Interesting Background Note
The EIA 748’s 32 criteria fell out of an effort in the 1990’s to take the C\SCSC’s 35 criteria and trim it down to make EVM more palatable as a ‘best practice’ process for private industry. The thought leaders worked on this for two years and managed to reduce it by only three criteria.