Practical EVM

Introducing Earned Value Management (EVM) into an organization needs a staged approach. There is a need for new tools, new processes, and a management culture change to make use of the new information.  Implemented properly, EVM is far more than a simple ‘add-on’ to either the scheduling tool or the cost management tools. Both of these systems are still needed, to support the added value created by a practical Earned Value Management System (EVMS). An effective EVMS is a performance management system designed to assess and assist the performance of the project’s management team.

Our latest article Practical EVM, looks at using the Easy EVM Workbook as a low cost, practical stepping stone on the journey towards creating the management culture and systems needed to take advantage of a fully-featured EVM software tool.

Download the Practical EVM article:  https://mosaicprojects.com.au/Mag_Articles/AA015_Practical_EVM.pdf

See more on Earned Value Management: https://mosaicprojects.com.au/PMKI-SCH-040.php

6 responses to “Practical EVM

  1. I don’t know, Pat. We’ve been using Earned Value Management as a CONTRACTOR for well over 50 years now and we still don’t understand why you continue to ignore the work of Gillette and Dana from 1909 https://books.google.co.id/books?redir_esc=y&id=zO-ADudj-R8C&focus that shows very clearly and unambiguously that earned value as CONTRACTORS use it even today, dates back to the factory floors of 18th Century Industrial Revolution and probably well before that to the 16th Century Guilds and even can be found in the Old Testament, as a “pay for performance” or “incentive payment system”.

    The frustrating part is that many contractors still use it today as was described by Gillette and Dana. Any contractor who quotes and/or is paid on the basis of the UNIT IN PLACE (i,e, carpet, tile, and other flooring contractors, roofers, painters (square foot or square meter) Civil Contractors (i.e Cubic Yard or Cubic Meter, (Dirt) or Square foot or Square Meter, paving) etc is practicing EVM as it originated.

    Unfortunately, the US Government along with PMI and AACE have managed to DIVORCE “payment from performance” and this is reflected in ISO 21500 and ANSI/EIA 748.

    For those who want to learn how EVM ORIGINATED and remains in use today by many if not all contractors as a CASH FLOW MANAGEMENT, COST MANAGEMENT and PRODUCTIVITY MANAGEMENT TOOL go HERE https://build-project-management-competency.com/1-4-1-11-unit-11/, Line Items, Pay close attention to Line Item 120/Figure 3, Line Item 431/Figure 10 and Line Items 1910 to 2076, Figures 43 to 49.

    And for PROOF that what we advocate works here is an example from Freeport Indonesia where they followed our guidance implementing EVM as it evolved from the mid-1800s to today and they documented 65 million USD in savings over a 4 year period and is one of the very few PMO’s still in existence after 18 years. https://pmworldlibrary.net/wp-content/uploads/2013/01/PMWJ2-Sep2012-WIBIKSANA-EVM-Adapted-for-UndergroundMining-StudentPaper.pdf and https://build-project-management-competency.com/ptmc-training-standards-and-specifications-individual/

    • The answer to your question Paul is unlike you, I actually understand what EVM is. Your opinion is wrong, based on false assumptions, and fundamentally delusional.
      As a starting point, EVM and cost engineering are not and never have been synonymous terms. Apparently you think you are right and the USA, UK, Swedish, Australian and numerous other governments, plus ISO, AACEi, ANSI, PMI, BSI, and many other organizations are wrong in respect of the definition, function and purpose of EVM. Maybe you need to take a close look at why you have to be right and 99.9% of the rest of the world, including the people who developed EVM are wrong…….
      Your stupidest point is confusing piece rate/quantity payments with EVM, this is so wrong and stupid it’s not worth arguing about. EVM is not and never has been a payment system – you don’t even need to use money as the metric within EVM.

      • OK Pat once again we are going to have to “agree to disagree” but I can assure you that I have been using EVM as I was taught by my professor at Worcester Polytechnic Institute, Marvin Gates, PE back in the late 1960s-early 1970s and for over 50 years I have been using it EXACTLY like shown in Gillette and Dana’s 1909 book on projects where my own money is on the line if my projects succeed or fail.

        IF you get the chance, check with EVM Guru Wayne Abba and he will validate that EVM originated as a “Pay for Performance” system. Do any of these names resonate with you? https://managementation.com/types-of-incentive-plans/

        Where we DO agree is that EVM is not commonly used which tells me your understanding is NOT correct. IF people fully understood EVM better as a cash flow management, cost control and productivity assessment tool/technique, they would be DEMANDING it be used whether OWNER or CONTRACTOR.

        To quote Booker T Washington “A lie doesn’t become truth, wrong doesn’t become right, and evil doesn’t become good, just because it’s accepted by a majority.” I don’t see any evidence that supports the argument that “USA, UK, Swedish, Australian and numerous other governments, plus ISO, AACEi, ANSI, PMI, BSI” are RIGHT.

        What did your 2020 AIPM/IPMA/KPM research show? https://home.kpmg/au/en/home/insights/2020/08/australian-project-delivery-performance-survey-2020.html
        – 52 percent of projects are delivered with stakeholder satisfaction
        – 51 percent of projects are likely to meet the original goal and business intent
        – 48 percent of respondents feel their organization manages projects and programs effectively or very effectively
        – 42 percent of projects are likely to be delivered on time
        – 40 percent of projects are likely to be delivered on budget.

        Hardly a solid argument for using “USA, UK, Swedish, Australian and numerous other governments, plus ISO, AACEi, ANSI, PMI, BSI” as the basis for your position?

        What is it Einstein told us about people “doing the same things over and over again but expecting different results?”

        MAYBE consistent with the Scientific Method https://sciencing.com/five-characteristics-scientific-method-10010518.html instead of calling me “stupid” you should TEST MY HYPOTHESIS? We have proof it WORKS. Can you provide proof REBUTTING my statements of fact?

      • The problem is EVM was not developed until 1972! Your deluded view of EVM is simply wrong and very damaging. Why don’t you call ‘cost engineering’ cost engineering? It is the term used in your referenced book for the early 1900s. And please stop using cheap debating trick such as introducing completely irrelevant statistics – what KPM research (and Gartner and others) show about project success is totally irrelevant to a discussion about the major differences between EVM and cost engineering.

      • “Where is your PROOF?” I’ve provided you with documented proof that EVM was formalized during the late 1800s and early 1900s by the same people whose names are associated with CPM scheduling and the foundations for “cost engineering” (called “engineering economics” back then)

        And I argue that EVM is SYNONYMOUS with “project success” and the fact we have been in business for 30 years in a highly competitive market with low-profit margins combined with the Freeport Case Study stands as evidence that it is you who don’t fully understand how to APPLY EVM. You understand the MECHANICS but I don’t believe you have provided any evidence that you understand how to USE or APPLY what the EVM dashboards show you.

        Go HERE https://build-project-management-competency.com/1-4-1-11-unit-11/ and if you can provide any CREDIBLE PROOF to refute or rebut how I learned how to use EVM back in the late 1960s – early 1970s and have been using to run our business for 52 years, I would love to see it.

        “The proof of the pudding lies in the eating”…

      • You have simply shown cost engineering in construction and engineering projects was developed at that time. We agree on this! The rest of your tirade simply shows you have absolutely no understanding of Earned Vale Management as defined in a range of authoritative documents starting with DoD directive DoDI 7000.2 and running through to ISO 21508.

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