A lot of folks in San Diego wonder how the construction of Petco Park, a managed project, could have possibly spent all the funding before it was half completed without anyone knowing. While I certainly don't have proof as to the actual cause, there is a very good way a project can get into this state -- they failed to look at all three key project success factors -- time, cost, and performance.
The usual illustrative story goes something like this ... you hire a painter to paint four walls in four days. Each day is budgeted for $1,000 for a total of $4,000. If at the end of 2 days, I tell you the painters spent $1,500, do you know what the status of the project is? No because you don't know how much work was actually completed. If I were to tell you the painters finished 3.5 walls, would you know? No, because you don't know how much was spent.
Earned Value is a project management technique that can help you look at the integrated time, cost, and performance of your project. Using it can provide an early warning of issues that need to be addressed before they permanently derail your project. Like many other tools, its use must be scaled to your project. Employing all elements of the methodology may be too costly or not including enough may oversimplify and provide a false view of your progress. There are also some limitations -- if you don't have a real plan of any kind, there will be nothing to measure.
The basic principles of Earned Value are easy to understand. There are simple calculations to provide you with the amount of deviation from schedule and costs, plus performance factors that can be used to predict the future performance of your project. Even simple projects or consulting engagements can benefit from the application of the key principles.
For more information and resources on Earned Value, please visit http://www.acq.osd.mil/pm/. The DOD was a very early adopter of the technique and has some of the best resources available. Don't be caught with a project that's half done but already over budget -- look over this information for techniques which will help keep your projects on the right track.
[This article was originally published 18 May 2007]
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