The venerable Cost Estimating and Assessment Guide (Cost Guide) has been updated for the first time since 2009! Published in March, the 2020 version of the Cost Guide has been significantly improved.
Some of the changes include:
- Better alignment of best practices, cost estimate characteristics, and cost estimating steps
- Clarification of some of the best practices and their related criteria
- Additional content in technical appendixes and revision or deletion of others
- Update case studies and references to USA government legislation and rules
- Modernization of the Cost Guide’s format and graphics.
The Cost Guide defines the four characteristics of a good estimate: comprehensive, well documented, accurate, and credible. It also incorporates 18 best practices and shows how the best practices align to the four characteristics. Additionally, it introduces the 12 steps of the cost estimating process that produce reliable estimates, and shows how the best practices align with the 12 steps.
Earned Value Management (EVM) remains central to the Cost Guide’s approach to managing the delivery of a project once the estimate is approved.
As with the previous version, the Guide can be downloaded free of charge from: https://www.gao.gov/products/GAO-20-195G
For more on cost management see:
In the March 2003 edition of the PMI College of Performance Management journal, The Measurable News Walt Lipke published his seminal paper “Schedule Is Different” and introduced the world to Earned Schedule (ES).
The challenge of predicting the likely completion date for a project is fraught with issues. There are no established protocols for scaling the remaining durations in a CPM schedule to take account of actual performance to date and there is no way of dealing with the consequences of a ‘bow wave’ of non-critical tasks consuming float until after they hit the critical path.
Re-scheduling the project is the same as re-estimating the work, a practice long discredited by Earned Value (EV) professional as being less accurate and more expensive than using EV formula to calculate a predicted cost outcome. And, the SPI and SV calculations cease to have any validity as the original project completion date is approached. In short, SPI does not work and CPM is wildly optimistic.
Walt solved this problem at least in part with the invention of ES. ES uses standard EV data to calculate a set of schedule indicators, which behave correctly over the entire period of project performance. The methodology and spreadsheets needed for calculation are freely available from the ES website.
Now Walt has published a sensibly priced book that explains the concept of ES and additional advances to the theory and practice of ES including the “P” factor, a measure of schedule adherence and “Effective EV,” which discounts the EV accrued by EV earned out of the correct process sequence.
I downloaded a PDF version of Walt’s book from Lulu Publishing for under $15; printed paperback books are available from Amazon, Lulu and a range of other book sellers.
Used properly, ES is the bridge between EVM cost and network schedule analysis, improving and providing the base for further developments in cost-schedule integration. ES can’t replace scheduling (and does not seek to) but it does provide a useful insight above and beyond what’s achievable using either traditional EV calculations or traditional CPM scheduling.
This is a book serious project control professionals cannot afford to ignore!
Posted in EVM & ES, Project Controls
Tagged CPI, Earned Schedule, Earned Value, ES, EV, EVM, EVMS, Project, Project Controls, Project Management, Scheduling, SPI
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?