EVM Myth #2: EVM is Only Useful for Large/Long-term Projects (#2 in the series The Seven Deadly Myths of Earned Value Methods in Project Management)
By Keith Custer
Almost every project, regardless of size or duration, can benefit greatly from Earned Value Management (EVM) techniques. Numerous studies have confirmed the value of EVM in large projects. You might also note that the US government now mandates EVM techniques on any internal or external project over $20 million (which by today’s standards is not that large!)
On smaller and usually shorter projects it may be necessary to increase the reporting cycle frequency to get timely results – from monthly to, say, weekly, or even daily for very short projects. Many smaller projects find that their Actual Cost reporting systems can’t easily report in these short periods, so Project Managers either do a good deal of extra manual tracking or forego some of the benefits (like weekly cost variances) of EVM. Project Managers can still continue to get the schedule reporting benefits of EVM on shorter reporting cycles because weekly (or even daily) schedule reporting is fairly easy to achieve. By making this compromise – frequent schedule reporting and less frequent actual cost reporting – all of the EVM benefits CAN still be had on a monthly basis as costs are finally reported for the month and matched up to weekly (or daily) schedule data.
It has also been observed that large projects can be viewed as just a conglomeration of smaller projects. This is often expressed as projects being part of a Program. If you understand EVM methods then you will realize that HOW the smaller projects build up to the larger project or Program is easier to see and understand because the rollup logic is greatly facilitated by EVM’s Work Breakdown Structure (WBS). These rollup features are why EVM is so useful for Work Package-type construction methods and summarizing projects into Programs.
We have used EVM on projects as small as $200,000 and 6 months in duration and found the methods extremely useful. We have also used EVM on projects as short as 4 weeks with major costs into the tens of millions of dollars, such as nuclear power plant refueling outages, with similar success. It is clear that EVM delivers major benefits in all scenarios.
Myth 2: Earned Value Management is only useful for large or long-term projects – is busted!
Keith Custer, PE, is an electrical engineer with over 30 years of consulting and management experience and is an expert in project management and the use of integrated cost and schedule techniques. He first learned about Earned Value in the 1970s, when it was still new, and has advocated its use ever since. He teaches a monthly 3-hour online training class in Earned Value Management as well an in-depth eight-module EVM tutorial (offered weekly on a rolling basis) and several other classes at www.CusterConsultants.net