An Alternative to EVM: The Zone Method
By Michael D. Taylor
The Zone Method1 was developed as an alternative to the Earned Value Management (EVM) when projects cannot support the administrative load of EVM. The Zone Method uses two metrics, “schedule events” and “labor hours” to track project progress. A schedule event is defined as the measurable start or finish of a given activity. Since project costs are determined primarily by direct labor hours, most project managers find that costs can be tracked by tracking direct labor hours. These two metrics can reveal schedule and cost variances from the planned baseline. To determine the variances from the planned baseline one must accumulate the planned versus actual schedule events within a certain period of time (weeks, quarters, months, etc.). Once the planned schedule events have been established, the actual schedule events are subtracted to determine the variance of the schedule. The same idea holds for the variance of the cost of the project. Once the total planned and actual direct labor costs are compared, the variance can be determined by examining the difference between the two.
Both metrics can be tabulated on a conventional spreadsheet as shown below. These tables show the planned versus actual schedule events and labor hours with the resulting variances. The variances can then be plotted over time to give a picture of the variance trends. By examining the trends, project managers can determine when corrective actions are required.
The Zone Method has advantages in that it is highly effective and has a very low administrative load. After converting the Gantt Chart to cumulative schedule events there is little else one has to do other than to regularly compare planned schedule events to actual schedule events. The same is done for labor hours. Because of this, and the fact that this method can be accomplished using conventional spreadsheets, it offers a viable alternative to the EVM method which may require a relatively large administrative load in light of the project budget.
1The Zone Method was developed by Systems Management Services.
MICHAEL D. TAYLOR, M.S. in systems management, B.S. in electrical engineering, has more than 30 years of project, outsourcing, and engineering experience. He is principal of Systems Management Services, and has conducted project management training at the University of California, Santa Cruz Extension in their PPM Certificate program for over 13 years, and at companies such as Sun Microsystems, GTE, Siemens, TRW, Loral, Santa Clara Valley Water District, and Inprise. He also taught courses in the UCSC Extension Leadership and Management Program (LAMP), and was a guest speaker at the 2001 Santa Cruz Technology Symposium. His website is www.projectmgt.com.