Making EVM Work
Earned Value Management is a tried-and-tested way to measure project performance. It’s robust, data-driven and highly respected as an approach for understanding how the work is going. However, as with all approaches, there are some things you should be aware of before you start using it.
All systems have their limitations, and EVM is no different. The main three challenges for teams new to earned value are:
- It doesn’t measure customer satisfaction
- The numbers can lack context and don’t show the whole story
- You need reliable data.
In fact, it doesn’t matter if you are new to EVM or have been using it for a while – these are the limitations you will come across! Let’s look at those in a bit more detail.
It doesn’t measure customer satisfaction
More and more projects are being done in complex environments with a wide range of stakeholders. EVM is great at measuring project schedule and budget progress and you’ll get accurate figures for those measures.
It won’t, however, give you any sense for whether the work is being done in a way that builds a successful partnership with the client. Customer satisfaction – and quality generally – is not taken into account. You’ll need to find other ways to make sure quality targets are met and that you are developing good working relationships with stakeholders at all levels.
One way to make sure that you are seeing the bigger picture is to gain EVM system certification. It might seem strange that we are recommending getting your system certified as a way of dealing with the issue of delivering a quality result but we promise it makes sense! When you’ve got a whole infrastructure set up and full understanding across the organization, the team knows what EVM can offer and what its limitations are. As a result, the team uses EVM for the right reasons, and continues to use excellent project management practices in other areas to deliver a quality result.
The numbers aren’t the whole story
Many people love EVM because it’s a data-driven way of displaying project progress, totally removed from the guesswork and emotion of reporting status. There’s no worry about the project team ‘massaging’ the report and inflating progress measures because a successful earned value management system draws on the underlying figures to present an unbiased picture. There are no raised eyebrows when someone reports a task as 80% complete – for the third week in a row – because the data tells the story.
Having said that, the numbers alone don’t show the whole story. You need some narrative and context to explain what the EVM report means, especially if your audience is people who are new to earned value or who have not seen the report before.
EVM doesn’t judge: your numbers can be interpreted as ahead or behind schedule, but being behind doesn’t always equal ‘bad’. There could be many reasons why the figures are reported as they are, so you’ll have to use your professional judgement to add a layer of interpretation for those who need it.
You need reliable data
Earned value calculations rely on data, and if your numbers are not accurate, your EVM metrics won’t be either. Unfortunately, some people will interpret the metrics as fact even if they have been calculated with unreliable data.
This is often the biggest challenge for organizations starting to use earned value in earnest. The quality of the underlying data needs to be robust enough and timely enough to produce useful EV calculations.
That can be a big mindset shift – and behavior shift – for the project team. They’ll have to start reporting progress in real time and putting more effort into planning in advance to create accurate baselines.
In addition, fast-moving projects can mean that the EVM numbers become out of date quickly. Even if you do have accurate data, getting them into the system and using the information becomes a challenge if the figures become irrelevant fast. As the main purpose of EVM reporting is to spot trends and act on them before they become a problem, it is a big issue to be working from outdated reports. That turns your EVM data into a historical record of project performance rather than a useful management tool.
Robust reporting tools will help you create the environment for success by making sure you have the systems in place set up to give you accurate data in a timely way.
Making EVM Work
As with any approach or business tool, EVM comes with caveats. They don’t stop you using it, and we would argue that understanding the limitations of the system means you can get better use out it. When you know what EVM can do for you, you can use it in an appropriate and effective way to support project delivery. Making EVM work is not as hard as most folks think!