Earned Value Confusion = No Value

I have just finished reading another article published in late 2008 where a proponent of Earned Value seems to deliberately set out to do as much damage to the general acceptance of the methodology as possible!

From its inception EV has been plagued with confusion generated by acronyms. EV ‘experts’ used to prove how knowledgeable they were by confusing business managers with a barrage of acronyms and formula. Before the turn of this Century, a decade ago, leaders in the profession recognised one of the major barriers to acceptance of EV was a general lack of understanding and sought to simplify the ‘alphabet soup’ that was making EV too hard for busy managers to understand.

ANSI EIA 748 A released in 2002, AS 4817 2003 released in 2003 and the 2000 version of the PMBOK® Guide all adopted a common, simple set of acronyms:

EV = Earned Value instead of BCWP (Budgeted Cost of Work Performed)

PV = Planned Value instead of BCWS (Budgeted Cost of Work Scheduled)

AC = Actual Cost instead of ACWP (Actual Cost of Work Performed)

These standards between them cover some 90% of the world’s Earned Value community! The intention was (and is) to demystify the process of Earned Value so managers could understand the data their project ‘controls’ staff were generating and use the information to make wise decisions. A really great idea! EV is an extremely useful and powerful tool if the data being presented to management is understood and acted upon.

What I cannot understand is why so many self professed advocates of EV are so keen to cause confusion by writing articles using the old, superseded acronyms.

  • Is it to try to look clever by confusing the ‘dumb reader’?
  • Is it to attempt to re-wind history back to the 1990s?
  • Are they actually opposed to the general use of EV and seek to prevent its general adoption by spreading confusion?

The UK (where EV is used to a very limited extent) is the only place that still published standards that use the old acronyms. These ‘standards’ are primarily from the Association for Project Management rather than British Standards.

Surely it’s time everyone used the same acronyms for the same item in an EV article and dragged themselves into the 21st century – it’s hard enough getting EV accepted in senior management circles without so-called experts and practitioners creating excuses for ‘not understanding’ by reverting to outdated acronyms, even in the UK??

What do you think?

5 responses to “Earned Value Confusion = No Value

  1. In the US DoD community the “old” terms are used in pratice for the simple reason, this is how we speak to each other. BCWS, BCWP, ACWP are referred to as S, P, A in the shorthand of daily conversation.
    In the end the principles of EV do require some effort to learn. Motivation for EV overcomes this learning curve and is required to grt past any naive objections.

  2. Thanks for the comment Glen. I think you have summed up in two short sentences the reason why EV is a bit player used in a minute number of projects (compared to the world-wide total) sponsored by a handful of organisations.

    EV is a brilliantly useful tool but no one will bother to become motivated to learn about it, if the starting point from their perspective is impenetrable acronyms and the experts are seen to consider CEOs of major corporations as naive because they can’t tell the difference between ‘S’, ‘BCWS’ and ‘PV’ – oh sorry, they aren’t different they are the same?????

    This is not a problem internally – DoD and every other major organisation has its internal jargon and short hand. The problem is when the confusion erupts into the public arena and the 30 seconds we have to influence a senior executive is spent dealing with acronyms rather than benefits and value. In the public arena we need consistency!

    These problems are not unique to EV, scheduling has a similar set of issues to contend with.

  3. Pat,
    I think no one will use it outside DoD and Federal and some state projects, until accountability for project performance has similar impacts as it does in those domains. I work the Space and Defense side of our firm. The commerical side clients wouldn’t last a week on our Navy, NASA, or Air Force programs.
    As well the clear “seperation of concerns” in A&D for Planning and Controls from engineering. Personal opinion is not allowed – only physical percent complete can be the discussion. Can’t tell you how many times I’ve heard a commercial client say “we’ll make it up in system test.” ;>)

    • You are so right. I did a series of papers at PMI Congresses a couple of years ago focused on ‘effective project governance’, see: http://www.mosaicprojects.com.au/Resources_Papers.html#Governance. Partly to push PMI into including Governance in its standards (reasonably successful – see the Standard for Portfolio Management 2nd Edition) and partly because I was hoping SOX and other similar legislation would result in improved use of project control tools such as scheduling and EV. 4 years later nothing much has changed; but we keep trying.

  4. Thank you for this very good and informative post.

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