Foreword
AN EARNED VALUE MANAGEMENT CULTURE
Are you mature? Professionally, of course. That’s a much tougher question than it appears to be on the surface, and it’s even more difficult to answer under the microscope of a single area of professional practice. With the emphasis on earned value management systems being brought to bear by the Office of Management and Budget’s Circular A-11 and the admonitions for due diligence of the Sarbanes-Oxley Act, the pressure has never been greater to prove that organizations and individuals are professionally mature and are managing their businesses (and more specifically, their projects) well.
Any attempts to draw conclusions about good management inherently bring with them some measure of subjectivity. Earned value management, however, has long been about making the case that the subjective and amorphous world of projects can be objectively and rigidly reined in. That’s no mean feat. In today’s world of “faster, better, stronger,” it’s difficult to serve the masters of both efficiency and accountability.
Enter earned value management. Organizations that apply earned value management hold out for the promise of a clear means of determining a project’s progress, effective use of resources, and potential conclusion. And that is the promise of earned value management. But that promise can be thwarted by an inconsistent application or a poor understanding of how earned value management is actually implemented. Indeed, any organization undertaking earned value management as a practice needs to assess its capability for EVM implementation. Such capabilities rest in the hands of individuals, and as such, the protocols for implementation need to be made as clear as is humanly possible. There is a normal progression for the development of such protocols—individual then division then organization.
The individual experience with earned value management is normally somewhat stilted. There are data elements that are readily available to most projects and some that are not. In some organizations, the individual work packages may be clearly defined and outlined, but the resource costs may not be available. Or the resource cost information may be on hand, but the actual costs of the work performed may not be at the disposal of the project manager or the team. As such, individuals almost always must “make do” with whatever data are available to them. That’s not an optimal environment for earned value management, but it can serve as a practical training ground for beginning to understand the mechanics of implementation. In many instances, it’s times like these that make individuals aware of what they do not know. And knowing what we don’t know can open the door for a thirst to learn how we can implement the remainder.
When enough practitioners in a single group determine that earned value management implementation is a necessity, there is a notable shift in culture in that group. Because there are multiple users, the data elements that support earned value management need to become consistent. This is a major change for many organizations, in that the way in which work is packaged, the way in which costs are captured, and the ways in which resources are applied to projects must become progressively more consistent. What a wonderful time for an organization. The pioneers who led the charge on earned value management get to see their vision come to fruition. Other participants are now playing along, and the rules of engagement are more clearly established.
This can also be a difficult time in the world of earned value management. With more players, earned value management becomes more visible, and thus also becomes a potential target. The administrative overhead associated with earned value management is challenged, as is the visibility of cost and pricing information in organizations without a history of open-book management. This time of growth is life or death for earned value management, as the practice will ultimately come under the gaze of senior management, meaning that senior management must endorse or subvert it. Endorsement comes with a host of benefits, including information tracking, forecasting, and reporting capabilities that some organizations only dream of. But endorsement also means the commitment of significant administrative resources and the willingness to become an “enforcer” as the need arises. Those latter roles do not sit well with some senior managers, and may sound the death knell for mature earned value management implementation. For those who can withstand the slings and arrows of earned value management critics, survival in this difficult developmental period can mean a future rich with an understanding of where projects are and where they’re going.
With the advent of OMB Circular A-11, Section 300, the civilian agencies of the U.S. federal government took a major leap forward in terms of organizational maturity in earned value management. By setting clear guidelines of when earned value management systems must be applied and how the information they generate will be used, the government opened the door for consistent application and enforcement of effective earned value management practice. While such “on-high” edicts bode well for those who support the practice of earned value management, they do not guarantee success. They simply create the opportunity for those who want earned value management practice to thrive to succeed. True organizational success arrives with the application of clear standards (such as ANSI/EIA-748-A-1998) and the respect for those standards by the individuals responsible for supporting them. And that takes time. The culture shift to move to an effective earned value management system means a long-term commitment to a vision of improved understanding of incremental and global progress on projects.
While the government can force such commitment by edict, public and private organizations should work to win such commitment by illustrating the value of the practice and the promise that it holds. In the pages that follow, Ray’s work should be read in two contexts—first as an informational treatise on the mechanics of implementation, but second as a cultural guideline. If, between the lines of the pages that follow, you can find the elements that map to your organization’s culture, you can take first steps toward earned value management maturity. If you find affirmation that most of your practices already map to the ANSI/EIA standard, you should look for any areas where your culture can be improved (and you can use it as a wonderful “I-told-you-so” moment). In either case, look at the insights herein as a road map. For the beginner, it’s a chance to see where the path leads and how you might traverse it. For the skilled professional in an organization with a rich EVMS history, it’s clear affirmation that the process is evolving in the right direction.
Carl Pritchard is the Principal of Pritchard Management Associates. He is an Earned Value Professional as certified by the Association for the Advancement of Cost Engineering and a Project Management Professional as certified by the Project Management Institute. He is the U.S. correspondent for Project Manager Today (UK) and is a member of the board of directors of ProjectConnections.com. He lectures, presents, and conducts research in the field of project management. His personal website is www.carlpritchard.com His e-mail is carl@carlpritchard.com