PMcrunch

Much is written on earned value techniques, and I am not going to delve in depth into the techniques in this post. I am only going to emphasize that to whatever degree you practice earned value techniques, the most important thing is to be very detailed about work packages and costs. If nothing else, go about this with eyes wide open.

Where are we?
An old mentor of mine was very good at expressing picture stories that illustrated a management concept very well. One of his stories went something like this: 

A manager fell off a 100 story building.  As he descended and crossed the 10th floor, someone yelled him, "Is everything okay?" He yelled back, "Everything is okay.  No problems so far!"

As we all know, falling from a 100 story building is not a good thing, and we should have a pretty good idea when we are in serious trouble at the start of the descent, let alone by the time we cross the 10th floor on the way down! I think this is where earned value techniques come into play.

When we are very detailed about the project schedule, and detailed about what those work packages should include,  we should have a sound basis to evaluate where we are and where we are headed at any given time.  We need to know when the work is to take place, and have detailed, believable values assigned to our work packages, and almost as a by-product we will have the foundation for practicing earned value techniques.

No matter how involved we get with the various formulas of earned value, we will be in position to know where we are headed, and whether that is good or bad. We will be in a position to know how we got there and to judge how we are going to get to the next level – to the final objective of the project, and how much it will cost.  Indeed, I think believeable and detailed work packages and schedules are the key to effective use of earned value techniques.
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John Reiling, PMP
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