The Case for “Earned Value” and Against the Status Quo PLAN CONTROL EXECUTE EVMS

Here’s what we have now… The Status Quo 70% of projects are: Over budget Behind schedule 52% of all projects finish at 189% of their initial budget And some, after huge investments of time and money, are simply never completed. Here’s what we have now…

Right to be concerned 16% 53% 31% Success Rates Successful Cancelled Under Perform Successful Success Rates 53% 31% 16%

What the experts say Others Technical Problems Problems with Suppliers Ineffective Project Planning Poorly Defined or Missing Project Objectives Poor Organization and Project Management Practices Insufficient Project Personnel Resources

Project a ‘mess’; Cabinet report implies widespread incompetence leading to cost overruns and slippages Any project of this nature should have, in broad terms: a detailed design for the purposes of cost estimating, securing funding and construction execution. a detailed plan which breaks down each task/activity, their sequencing and dependencies, which also profiles the cost estimate over time a risk register a Governance Board structure operating regularly at a number of levels that monitors progress on the ground against the plan, tracks cost build up against deliverables, and the management of risks. 20 million pound project 2018, currently 50% over budget and no set delivery date.

This is how bad it have become………… The challenge for many organizations is achieving project delivery success, given that the historical performance of many projects, especially major projects, has not been good. In fact, the failure rate on major projects, especially large engineering projects (LEPs), threatens to bring the whole concept of major projects, and project management, into disrepute at a time when more major projects than ever are being conceived and built. Francis Hartman, PhD, P.Eng NSERC/SSHRC Chair and Professor Project Management Specialization University of Calgary, Alberta, Canada

What the PM’s Say Undefined Deliverables – When deliverables are not clearly identified both in quality and timelines then typically the project has little chance of succeeding. Scope Changes – Also known as scope creep, controlling scope takes a strong control system integrated rooted in the master schedule. Inadequate resourcing for the Project – A project’s resourcing should be defined and linked to schedule, otherwise it’s a just a wish. Lack of Accountability – Complex projects require teams to work towards a common goal, they must understand how their work fits into the whole and a single ownership within the organization linked and accountable to the schedule. Improper Risk Management – Risks should be linked to scope, and have drop off periods when the risk should be retired via the schedule. Ambiguous Contingency Planning – If contingencies are not identified, the entire project can become mired in an unexpected set of knock on effect problems. Impossible Deadlines – The odds of successfully completing a project under unreasonable deadlines are generally not feasible. Loss of Stakeholder confidence – Missing millstones deliverables and subjective project reporting will only lead to distrust and aggravation on the part of your client

What is Earned Value? and How can it Help Simply, it is a project monitoring and measurement system that: establishes a clear relationship between planned accomplishments and actual Simply, it is a project monitoring and measurement system that: establishes a clear relationship between planned accomplishments and actual accomplishments reinforces and rewards good planning practices

Basic concepts of Earned Value Management (EVM) What is Earned Value? Simply, it is a project monitoring and measurement system that: establishes a clear relationship between planned accomplishments and actual Basic concepts of Earned Value Management (EVM) Each task in a project earns value as planned work is completed For example (perhaps), if you were paid on this basis, you would earn £ £ at key milestones based on the value of what you have completed (earned value) Earned value can be compared to actual cost and budgeted cost to determine variance and predict future performance

FORECAST & STATUS => Progress DB How EVMS can help…. CHANGE BCRs SCOPE SOW DB COSTS ANALYSIS SCHEDULE EV REPORTING FORECAST & STATUS => Progress DB RISK

What an Integrated EVMS System mitigates Undefined Deliverables – Deliverables are now defined in standard format integrated to level 3 and milestone definition statements. Scope Changes –Scope is clearly written and integrated to cost, resource dependency, deliverables and risks. Change can be assisted against all of these impacts quickly and consistently once baselined. Inadequate resourcing for the Project – Resourcing now defined and linked to scope and deliverables. Recourse profiles can be produced at a button push down to level 3. Lack of Accountability – Deliverables can be accessed and identified quickly by work package owner, control account owner, and inputs and outputs are linked and managed as a thru life project baseline. As change is agreed owners are notified. Improper Risk Management – Risks can to transferred to Risk manager, and is linked at the proper level and can be tracked to the work packages that spawn the risk. Risk cascades can be produced quickly. Ambiguous Contingency Planning – pre-defined "what-if" scenarios and contingencies are managed and “hand shake”. Knock on effect are mapped and a matrix can be reviewed thru life of the project as a living document. Impossible Deadlines – Deadlines are understood as they pertain to scope and resource indexed to cost. This creates a complete story board. Loss of Stakeholder confident – Detailed reports, change controls, risk mediation, and reporting flow quickly from project to client in a consistent narrative.

The Right people in the Right OBS Programme Control Manager Cost Schedule Earned Value Reporting Risk Opportunity Budgeting Forecasting Data Integrity Owner of one version of the truth Intelligent Information Change Management Programme Delivery Manager Defines Standards and Requirements Selects Source Controls Budget Approves change Expedites Approves overall Delivery strategy Intelligent Customer Commercial Manager Programme Director advisor on Commercial matters Acquisition Strategy Quality and Definition of the Statement of Works Source Evaluation Supplier Evaluation Supply Chain Manager Intelligent Conscience Contracting Officer Competition Source Selection Elevated Negotiator Dispute Resolution Enforcer Official Signatory for all contract matters Approve Changes Intelligent Contract Compliance Programme Director

Do we need a new system for Project Controls? Theodore Roosevelt > Quotes > Quotable Quote “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” Do we need a new system for Project Controls? Back to main

Questions? Theodore Roosevelt > Quotes > Quotable Quote “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” Back to main