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sachinm on 8 March 2024, 4:09 am
Earned Value Analysis (EVA), has long since been the most widely used managerial control tool in the industry. EVA is a managerial methodology to monitor and control projects and it uses monetary units as a common basis to measure and communicate the progress of a project. It is based on comparing the actual and the budgeted values of the work performed, the time taken and the costs incurred. Hence, time and cost perspectives of a project control system are integrated. Cost and schedule variance are calculated to evaluate the current project progress and also predict the total project cost and duration.
And so, to assess the performance of the projects in the portfolio, Vitner et al. (2006) combined EVA with a multidimensional control system and used Data Envelopment Analysis (DEA), which is a mathematical approach to evaluate efficiency of decision making units (DMU).
Earned Schedule is a measure of time that represents how long you forecasted to do the work that has been completed. The time period is measured from the date the project begins and ends at the point the Planned Value should equal the Earned Value.
Earned schedule is used to work out when the Earned Value should have been earned by to provide early warning indicators. And so, Earned Schedule has been integrated into EVM guidance (e.g., ISO 21508:2018, Earned Value Management in Project and Programme Management). (Source: Czarnigowska, Agata, P. Jaskowski, S. Biruk. “Project Performance Reporting and Prediction: Extensions of Earned Value Management,” International Journal of Business and Management Studies, Vol 3, No 1, 2011)
(Source: https://www.earnedschedule.com)
Even though, EVA has been increasingly taking attention of project managers, there are some limitations of implementing EVA in practice:
- Critical and noncritical activities are not differentiated.
- Activities are assumed to be independent.
- Behavioral aspects of management are not taken into account.
- Quality of processes and output are not assessed.
- Information requirement is high.
In addition to these points, we note that EVA only considers two dimensions of project planning and control: time and cost.
What we need to consider: Is why EVA is not currently used as well to report on the efficiencies of establishing risk management controls, and the efficacy of risk mitigation measures? These are part of the Performance Management Baseline (PMB), and so should form part of the Earned Value (EV) calculations.
Further, we need to consider how EVA includes the practice of Uncertainty Management, within the estimation (cost, and schedule) of the calculation of the Performance Management Baseline (PBM)? If, for example, estimating uncertainty has been included in the expected out-turn costs.
Alternatively, Uncertainty Management, could not form part of the Performance Management Baseline (PMB), if this estimating uncertainty, and mitigation cost measures have been budgeted as part of Management Reserve (MR).
Source: Öncü Hazır, "A review of analytical models, approaches and decision support tools in project monitoring and control", International Journal of Project Management, Volume 33, Issue 4, 2015, Pages 808-815, ISSN 0263-7863, https://doi.org/10.1016/j.ijproman.2014.09.005. (note: Log-in to Download 🔽)
We also need to review the integration of these models into decision support systems (DSS) and project management. DSS are computer-based systems that support decision making by combining and analyzing data and providing analytical models and tools that contribute to the selection of alternatives. Software support is indispensable in performing various functions of project management.
To design an effective system should clearly define the following policies:
- monitoring policy: what, how, where, when and by whom to monitor,
- intervention and control policy: what, how, where, when and by whom to prevent, intervene and correct.
So, as an alternative to traditional EVM and Work Breakdown Scheduling (WBS), we can producing such a deliverables-oriented WBS. This requires that the WBS be based on planned outcomes throughout the project, rather than on planned actions. Using this approach produces a project plan in which the system or the product is the primary driver for the project. This WBS is based on our PPLM approach (Project–Product Lifecyle Model). The suggested improvement over the classical WBS model can become useful to the product design definition and project planning phases during complex, novel, high, or superhigh technology system development. However, where EVM developed on WBS methodology can still be applied.
The PPLM model integrates the project domain with the product domain via a shared ontology, utilising object process methodology (OPM). To develop a PPLM (Project–Product Lifecyle Model), we use as building blocks of Task Execution processes, which takes an expected duration and is aimed at achieving a specific Deliverable Set, using a Resource Type.
Source:A. Sharon and D. Dori, "A Project–Product Model–Based Approach to Planning Work Breakdown Structures of Complex System Projects", in IEEE Systems Journal, vol. 9, no. 2, pp. 366-376, June 2015, doi: 10.1109/JSYST.2013.2297491. (note: Log-in to Download 🔽)
Each resource type is utilised as defined by its attribute, which is measured using specified Measurement Units.The Deliverable Set is the outcome of each Task Execution, and may include deliverables such as product components, documents related to derived requirements, approvals, simulations, analyses, specifications, and other types of reports.
These deliverables are classified into three roles: (1) document, (2) component, or (3) gate. Each one of the deliverables directly and explicitly results from a specific process in the PPLM model and is used in a subsequent process, either as an instrument (usually if it is an informatical object, which does not change) or as a consumee (usually a physical object that is consumed by or embedded into a larger component).
Why bother?
We can automate the derivation and update of the various project views—WBS, Gantt, Program Evaluation and Review Technique (PERT), etc.—from the PPLM (Project–Product Lifecyle Model) source, that is maintained from a single system blueprint.
Integrated Product Teams (IPT), which are widely used as a means for managing complexity during large-scale systems development in Lean development, to integrated project–product teams (IPPTs). These IPPTs can use the PPLM model as a common blueprint, a single integrated model that supports the work performed by all the IPPT members. Moreover, since the complete PPLM model includes the organisational personnel involved in the development with explicit relationships to processes and milestones, organisational information can also be extracted from the model. This includes, for example, organisational design structure matrices for managing the complex relationships of the IPPTs and their members.
Earned Value Analysis (EVA), has long since been the most widely used managerial control tool in the industry. EVA is a managerial methodology to monitor and control projects and it uses monetary units as a common basis to measure and communicate the progress of a project. It is based on comparing the actual and the budgeted values of the work performed, the time taken and the costs incurred. Hence, time and cost perspectives of a project control system are integrated. Cost and schedule variance are calculated to evaluate the current project progress and also predict the total project cost and duration.
And so, to assess the performance of the projects in the portfolio, Vitner et al. (2006) combined EVA with a multidimensional control system and used Data Envelopment Analysis (DEA), which is a mathematical approach to evaluate efficiency of decision making units (DMU).
Earned Schedule is a measure of time that represents how long you forecasted to do the work that has been completed. The time period is measured from the date the project begins and ends at the point the Planned Value should equal the Earned Value.
Earned schedule is used to work out when the Earned Value should have been earned by to provide early warning indicators. And so, Earned Schedule has been integrated into EVM guidance (e.g., ISO 21508:2018, Earned Value Management in Project and Programme Management). (Source: Czarnigowska, Agata, P. Jaskowski, S. Biruk. “Project Performance Reporting and Prediction: Extensions of Earned Value Management,” International Journal of Business and Management Studies, Vol 3, No 1, 2011)
(Source: https://www.earnedschedule.com)
Even though, EVA has been increasingly taking attention of project managers, there are some limitations of implementing EVA in practice:
- Critical and noncritical activities are not differentiated.
- Activities are assumed to be independent.
- Behavioral aspects of management are not taken into account.
- Quality of processes and output are not assessed.
- Information requirement is high.
In addition to these points, we note that EVA only considers two dimensions of project planning and control: time and cost.
What we need to consider: Is why EVA is not currently used as well to report on the efficiencies of establishing risk management controls, and the efficacy of risk mitigation measures? These are part of the Performance Management Baseline (PMB), and so should form part of the Earned Value (EV) calculations.
Further, we need to consider how EVA includes the practice of Uncertainty Management, within the estimation (cost, and schedule) of the calculation of the Performance Management Baseline (PBM)? If, for example, estimating uncertainty has been included in the expected out-turn costs.
Alternatively, Uncertainty Management, could not form part of the Performance Management Baseline (PMB), if this estimating uncertainty, and mitigation cost measures have been budgeted as part of Management Reserve (MR).
Source: Öncü Hazır, "A review of analytical models, approaches and decision support tools in project monitoring and control", International Journal of Project Management, Volume 33, Issue 4, 2015, Pages 808-815, ISSN 0263-7863, https://doi.org/10.1016/j.ijproman.2014.09.005. (note: Log-in to Download 🔽)
We also need to review the integration of these models into decision support systems (DSS) and project management. DSS are computer-based systems that support decision making by combining and analyzing data and providing analytical models and tools that contribute to the selection of alternatives. Software support is indispensable in performing various functions of project management.
To design an effective system should clearly define the following policies:
- monitoring policy: what, how, where, when and by whom to monitor,
- intervention and control policy: what, how, where, when and by whom to prevent, intervene and correct.
So, as an alternative to traditional EVM and Work Breakdown Scheduling (WBS), we can producing such a deliverables-oriented WBS. This requires that the WBS be based on planned outcomes throughout the project, rather than on planned actions. Using this approach produces a project plan in which the system or the product is the primary driver for the project. This WBS is based on our PPLM approach (Project–Product Lifecyle Model). The suggested improvement over the classical WBS model can become useful to the product design definition and project planning phases during complex, novel, high, or superhigh technology system development. However, where EVM developed on WBS methodology can still be applied.
The PPLM model integrates the project domain with the product domain via a shared ontology, utilising object process methodology (OPM). To develop a PPLM (Project–Product Lifecyle Model), we use as building blocks of Task Execution processes, which takes an expected duration and is aimed at achieving a specific Deliverable Set, using a Resource Type.
Source:A. Sharon and D. Dori, "A Project–Product Model–Based Approach to Planning Work Breakdown Structures of Complex System Projects", in IEEE Systems Journal, vol. 9, no. 2, pp. 366-376, June 2015, doi: 10.1109/JSYST.2013.2297491. (note: Log-in to Download 🔽)
Each resource type is utilised as defined by its attribute, which is measured using specified Measurement Units.The Deliverable Set is the outcome of each Task Execution, and may include deliverables such as product components, documents related to derived requirements, approvals, simulations, analyses, specifications, and other types of reports.
These deliverables are classified into three roles: (1) document, (2) component, or (3) gate. Each one of the deliverables directly and explicitly results from a specific process in the PPLM model and is used in a subsequent process, either as an instrument (usually if it is an informatical object, which does not change) or as a consumee (usually a physical object that is consumed by or embedded into a larger component).
Why bother?
We can automate the derivation and update of the various project views—WBS, Gantt, Program Evaluation and Review Technique (PERT), etc.—from the PPLM (Project–Product Lifecyle Model) source, that is maintained from a single system blueprint.
Integrated Product Teams (IPT), which are widely used as a means for managing complexity during large-scale systems development in Lean development, to integrated project–product teams (IPPTs). These IPPTs can use the PPLM model as a common blueprint, a single integrated model that supports the work performed by all the IPPT members. Moreover, since the complete PPLM model includes the organisational personnel involved in the development with explicit relationships to processes and milestones, organisational information can also be extracted from the model. This includes, for example, organisational design structure matrices for managing the complex relationships of the IPPTs and their members.
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