Following on from my last post EVM – Six things’ people don’t get! I’m seeing far too many examples of EVM systems that are set up to fail, either because the people doing the work think the WBS should reflect the project chart of accounts or the WBS should be part of the schedule. Both are a recipe for failure! However, like most people with a good understanding of EVM, and almost all of the books, in the first article I did not explain why this is the case.
Correcting this omission is the focus of my latest article EVM – Sizing Work Packages. This article shows why the basic requirement for a work package are that is it big enough to have a manager appointed with the authority to manage the full scope of the work (cost, time, quality, etc), and that it will be open long enough to allow management control to be exercised.
The example I used in Sizing Work Packages was a theoretical $15 million, 10-month project to design and construct a rail bridge. The schedule for this size of project would likely be in the region of 100 to 200+ activities (maybe more). While the project cost controls would likely contain around 50 to 150+ line items. In both of these controls tools this level of detail is needed for effective control. However, for the same project, an effective EVM system needs around 10 work packages laid out in a block diagram they would cover:
These ten work packages are of a sensible size, they are likely to align with a typical management structure, summary activities in the project schedule and the project cost system. Assuming the data transfer from these other systems is robust, the work packages are capable of being rigorously assessed and controlled using standard EVM metrics in a straightforward spreadsheet.
For more on Sizing Work Packages and pragmatic EVM, see Mosaic’s EVM and ES webpage: https://mosaicprojects.com.au/PMKI-SCH-040.php
Pat Weaver
Lynda Bourne
Mosaicproject's Blog 
@Pat here is our SUCCESSFUL “real case study” from Freeport Indonesia that documented savings of 65 million USD over a 4 year period and based on our belief that “God (or the Devil if you prefer) lies in the DETAILS”, we tracked EVM at the PROGRAM, PROJECT, SHIFT and CREW level of details. https://build-project-management-competency.com/ptmc-training-standards-and-specifications-individual/
Why? Because the ONLY way to make REAL PROCESS improvement happens at the very tip of the spear- at the point where the work is done. Given the BCWS ED and LD are ESTIMATES, the only REAL DATA that we have are BCWP and ACWP along with Actual Starts, Actual Finishes and Actual Durations.
Meaning the first “test” is whether the BCWS ED and LD curves were accurate or not. Whether we like it or not, the biggest reason EVM doesn’t work is that the BASELINE ESTIMATES were WRONG. (Go HERE https://build-project-management-competency.com/1-4-1-11-unit-11/ and see Figure 83 on pages 126-128)
Once the BCWS ED and LD curves have been VALIDATED only then can we analyze the ACWP and BCWP against the PMB and draw any meaningful conclusions.
Compare your SAMPLE earned value data collection spreadsheet vs our ACTUAL field data spreadsheets shown HERE https://build-project-management-competency.com/1-4-1-11-unit-11/ Figures 17 and 18 and you can see you are MISSING some critical pieces of information.
And to VALIDATE the ORIGINAL SOURCE, see Figure 3 or better yet, download Gillette and Dana’s 1909 book “Cost Keeping and Management Engineering: A Treatise for Engineers, Contractors and Superintendents Engaged in the Management of Engineering Construction” https://books.google.co.id/books?redir_esc=y&id=zO-ADudj-R8C&focus to see the ORIGINS of earned value evolved from the factory floors of the 18th Century Industrial Revolution as a “pay for performance” or “incentive payment system”.
Lastly, given you have the CPI and SPI data, why are you not running 3 Sigma statistical process control charts to see whether your WORKFLOW PROCESS is IN or out of CONTROL and if it is OUT of control is it due to a process problem or an external problem (See https://build-project-management-competency.com/1-4-1-11-unit-11/, Figures 43 – 47)