Earn Value Management

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One Response to Earn Value Management

  1. John County says:

    I have had the opportunity to serve an array of organizations throughout my consulting career. I have yet to held a C-level executive discussion regarding earned value. I do see the value in the discussion assuming a large EMPO organization where resources exist to focus on budget spend to duration analysis for 8 hours. I do believe that earn value is an attempt to determine how much am I spending compared to actual project delivery. The real discussion is comparing scope, unplanned factors and what’s left in the bank account.

    Project leaders should focus on forecast based on existing scope compared to chartered scope, burn rates incurred in OPEX, capital purchases, and vendor contracts in terms of current SOWs. Internal resource consumption is another factor but is a non-cashflow impact. Next, consult the team, understand the issues and resource constraints (planned vacations, vendor availability, etc.) will lead you to a logically and practical understanding of overall project condition (Green/Yellow/Red).

    An executive wants to know two things: How much does is cost? And, when will it get done?

    Do as much analysis as you can to attempt to arrive to this answer. However, do not spend time on analytical, iterative, un-comprehensive approaches in terms of telling a senior leader whether we are on target or not.

    Focus on what you can see and understand. Collaborate, collect input, work with Finance, reconcile budget to what has been paid, and walk with confidence into the exec meeting to tell them what your team has done, this is what we need and if approved, this is what I will deliver by the next time we meet.

    Earn value diagrams have room in PM methodology, but not where it counts….the Board Room.

    John County

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