Earned Value (EV) is an incredibly powerful tool when used properly. Unfortunately, we see a lot of EV implementations that are less successful than they could be, and we are often called in to help companies get the best out of their EV systems.
Here are the top ten reasons why EV fails – and it isn’t all about the software. Earned Value Management (EVM) also impacts people, processes and technology as well as a company’s revenue stream.
#1. Lack of management commitment
Earned Value initiatives take time to set up and can involve a complete rethink of how success is measured. It’s not just a financial tool; it impacts a company’s total revenue stream and measures the company’s ability to manage cost, schedule and technical performance. If the senior management team is not committed to this change, then Earned Value systems will never gain any traction.
#2. Management don’t assign a team of proven performers
Earned Value is often seen as an additional reporting mechanism, so inexperienced resources are assigned to set it up. EV is so much more than simply another way of visualizing project data, so make sure that the people implementing it are confident, strong and proven performers who can truly lead the change.
#3. Control Account Managers (CAMs) don’t accept responsibility for cost, schedule and technical performance
The role of the Control Account Manager is really important in Earned Value systems. The person in this role is responsible for planning and co-ordinating the work in a Control Account. Their function is as a Deputy Program Manager for their respective area and they have responsibility for cost, schedule and technical performance for their Control Accounts. It’s their responsibility to manage the Control Account effectively – no excuses. Sit with your CAMs and make sure they are clear about the role, and if they continue to duck their responsibilities, remove them from post.
#4. Management doesn’t hold Control Account Managers (CAMs) accountable for cost, schedule and technical performance
It’s the role of the Portfolio Office Manager or another senior leader sponsoring the move to EV to challenge the CAM. Don’t accept poor performance, either at a personal level or at the level of a Control Account. Also remember that this is no less important than the Program Manager’s role. If the CAMs don’t perform, it’s going to be impossible for the Program Manager to achieve cost, schedule and technical performance excellence. The more that people are held accountable for their responsibilities, the better the outcome of the EV initiative will be. Equally, you will need to empower staff to be able to carry out their duties effectively. It’s no good challenging them to perform better while not giving them the operational ability to do so.
#5. Poorly documented processes
Earned Value is more than implementing software tools. Review your existing processes to ensure that they are compatible with EV methods. If they aren’t, change them.
#6. A poorly trained team
The EV implementation will only be as good as the people using it, so it makes sense to invest heavily in training the team EVM Training. It’s likely that many of the individuals involved will never have had any exposure to EV before, so start with the basics to cement a good understanding of core principles.
You will also want to schedule enough training time to encompass people, processes and tools in order to effectively implement a viable EVM solution.
#7. Using unproven tools
There are many EV tools available, but don’t rush to choose the first one in your price range after a slick sales presentation. Carry out proper research into what tools have been proven to work for other businesses in your sector. Some tools work more effectively for different sized companies. Some are aimed at those with a mobile workforce, others are more useful for team members based in one location. If you are unsure, get some independent advice – Ten Six will be able to help you select something that works for your situation.
#8. Management accepts excuses for bad performance
The role of the senior leadership is again important in stopping excuses. We often hear things like, “It’s not me, it’s the system”. Software only does what you ask it to, so make sure that your staff are well-trained, properly mentored and able to use the tools effectively. And never accept excuses for poor performance or mediocrity. Demand excellence and the Program Team, IT, Labor, Accounting, etc. will get the message that solutions to problems are the expectation, not excuses. If there’s a problem: why did it happen, what’s the impact on cost and schedule and finally what’s being done to mitigate it?
#9. Inaccurate performance data from existing systems
A major struggle for new EV initiatives is that the data in existing systems is not good enough. If it isn’t good enough, don’t use it. It will take time, but it is better to build up accurate data than base your future performance on data that was meaningless.
#10. Lack of Management Commitment
Are you getting a feeling of déjà vu? Yes, management commitment appears on our list twice, because it’s doubly as important as anything else. EV benefits companies and projects. It really is worth taking seriously, and that means throwing the support of the senior leadership team behind it. Without the commitment and active participation of executive management, your EV initiative will wither and fail, or never properly get off the ground in the first place.
Choosing to implement EV is such an important decision that if you are going to do it, it really is worth doing properly and avoiding the issues on this list. Let us know how you get on!
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