Measuring progress for Earned Value
One of the important premises of earned value management is that you have a defined way of measuring progress for each task. Some of the formulas need you to calculate how much of the work is done, either at project level or at task level. You can use percent complete: that’s often how the formulas are laid out for simplicity. However, how do you decide what the percent complete should be?
There are three ways to measure project performance:
- Discrete Effort
- Apportioned Effort
- Level of Effort.
These are all useful in different circumstances, so you’ll need to pick and choose the best measurement approach for the task. This should be documented in the work package information so that everyone is clear how progress will be assessed.
Let’s look at how each of those measures work and how you can use them.
Discrete effort applies in situations where there is a specific output that can be planned and measured, which is often the case if you are making something. Whether it’s widgets for an aircraft or loaves of bread, you can measure output easily, normally by counting.
There are four different ways of measuring discrete effort so you can tailor it to the task at hand. They are:
- Fixed formula: Assign a specific percent complete to the work package as soon as it begins, and allocate the remaining percent when it finishes. For example, assign the task as 25% complete once something has been done on it, and then once the work package is finished it becomes 100% complete. Generally, this is only useful for small work packages.
- Weighted milestone: Assign a specific percent complete to the work package to be allocated as the team hits milestones.
- Percent complete: The classic method of attributing percent complete based on how much of the work has been done by the end of each measurement period.
- Physical measurement: Useful if your project is delivering something you can measure in standard units, like number of miles of road laid.
If you choose discrete effort as your measurement method, make sure the work package documentation sets out exactly how you will be calculating progress so everyone is very clear on the calculations involved.
In our experience, most of the ‘meat’ of the earned value calculations comes from here. It’s important to be able to break down the project into chunks of activity that can be adequately measured. The other progress measures relate less to actual output and more to the support work that has to happen to complete the deliverables.
Make sure the person responsible for leading on the work package has a say in what technique is most appropriate for the kind of work they are creating.
Apportioned effort is used mainly for tasks that are difficult to quantify with any degree of accuracy and exist to support the ‘main’ delivery activities of the project. For example:
- Quality assurance
These tasks sit alongside tasks that can be measured with the discrete effort method. Apportion progress using percent complete based on what has been delivered in the ‘main’ activity. For example, if 70% of the road has been laid and the value earned, you can assume that 70% of the associated testing and inspection tasks has also been completed.
It’s important to document assumptions in your work package paperwork so that these can be reviewed later on.
Level of Effort
Finally, Level of Effort activities need to be accounted for. Work that falls into this bucket is generally activities that support and underpin the rest of the work such as project management tasks, contract management, resource planning and so on.
The level of effort expended doing these activities is not evenly distributed throughout the project – any project manager will tell you that there are busy times and not so busy times throughout a project lifecycle.
Working out level of effort is pretty easy in comparison to some of the more complex calculations you’ll do in the earned value domain! Assign a Planned Value (PV) to the task for the measurement period. At the end of the measurement period, the task has earned that value: the PV becomes EV.
All these methods of managing progress have nuances and more to them than there is space to explain here. Earned Value Management training will help your team understand exactly how to measure their work and how to report progress.
There is no right or wrong option to choose. As long as the measure makes sense in the context of the task, it’s right! The only recommendation we’d make is that mixing measurement methods within a work package is only going to lead to confusion, so one work package should have one way of measuring progress.
An earned value management system assessment will help you see where you can improve to enhance your application of all of these methods and assure your team that you are choosing the correct approach for each work package. There is a lot to take in with earned value, so it helps to have an independent pair of eyes look over your practices so you can have confidence in the way you are applying the techniques.