Preface to the Second Edition
If a project sponsor has dictated that your project must adhere to the requirements of the Earned Value Management System (EVMS), you need to read this book. If you want to learn the mechanics of a complete project system that is much discussed and well accepted in knowledgeable project management circles, you will want to read this book. If you want to understand a few EVMS concepts, you may find exactly what you need to target in the table of contents or the index.
Many project managers initially are opposed to implementing EVMS. Change in any form is often feared. After all, if project managers are successful to some degree without EVMS, they naturally will wonder how successful they will be in a new environment that uses EVMS. Project managers who are accustomed to and comfortable with their particular system may now feel that their every move will be studied microscopically and that they will be compelled to waste time explaining their every action. But consider this: If you are extremely competent, don’t you want top management to recognize your value on the basis of criteria other than your ability to promote yourself (or another manager’s ability to promote you)?
This practical guide provides two perspectives on EVMS: an academic perspective to give you insight into the mechanics of the system and a practical perspective to assist you in its everyday implementation and use.
We have heard several complaints that the requirements of EVMS are too complicated, too detailed, and too difficult to understand. It is our intent to walk you through the EVMS criteria in a way that clarifies the requirements and untangles possible complications. This second edition of A Practical Guide to Earned Value Project Management not only will bring the EVMS requirements into your world but also will guide you in applying additional successful project management techniques and tools.
We also have heard comments that some of the EVMS requirements overlap, some are too “picky,” and some are just not necessary in the commercial and industrial worlds. We believe all the requirements are reasonable ingredients of sound project management. However, initiating and tracking all the EVMS criteria—especially for every project—can require a significant effort. For small, fast-track projects, using a subset of earned valued (EV) measures still may be beneficial. You should not try to shortcut EVMS criteria when they are required, but when they are not, we can show you some effective shortcuts to reduce implementation effort. There is a point, however, when reduction effectively becomes elimination.
Although we use EVMS and tout its strengths, we do not mean to imply it doesn’t have some shortcomings. It does, and we point out those weak and sometimes treacherous aspects. But our purpose is to guide you on a practical route through EVMS and to give you some no-nonsense ideas for ways to meet its criteria and complete your projects successfully.
EVMS is a highly effective project management tool, but it is not a standalone project management system. Project managers need much more in their tool bag. So before we begin to discuss the details of EVMS, we review project management in general. We realize that most of our readers already have good project management skills, so some information will seem very basic. For that reason, we only skim the surface; however, it is our hope that these discussions may introduce unfamiliar topics or stimulate your interest in further examining a well-known topic. You might find a nugget or two to engage your mind while you mull over the challenges of your current project.
Most of our readers are accomplished project managers who, for any number of reasons, want to learn about EVMS criteria and how they can conform to the detailed requirements of EVMS while still completing their projects. We do our best to give you this knowledge. This is not a project management how-to book. Many books and classes on the techniques for successful project management are available. While virtually all these books and classes use EV concepts, few discuss the formal EVMS criteria and even fewer offer project managers practical advice on interpreting and using the criteria to manage their projects.
To understand EVMS, you don’t need to be an expert in accounting or even to have had any college accounting classes. We guide you step-by-step through everything you need to understand the requirements. Checkpoints throughout the material (gates in project management terminology) allow you to review your progress and retrace your steps if necessary. Anticipating that some readers will be involved in EVMS projects that will be audited (internally or by a government agency) for compliance with all 32 criteria, we cover the entire set.
Throughout the book, we try to communicate our perspective in a straightforward manner. Figures and tables are provided to enable readers to grasp concepts readily through visual depictions.
In Part I, Chapter 1 provides the book’s purpose and organization, and Chapter 2 sets the stage for a shared understanding of general project management. Part II presents the basics of earned value; Chapter 3 provides the EV metrics that are the basis of any complete or abridged EV project management system, and Chapter 4 introduces the concepts of EVMS and gives a preliminary view of the EVMS criteria. The 32 criteria of EVMS are discussed in detail in Chapters 5 through 11 of Parts III (It’s All in the Plan), IV (Project Status), and V (Handling a Project’s Changes and Terminations). Part V also includes Chapter 12, which deals with the termination of a project.
In the first edition of this book, published in 2005, we wrote quite specifically for those whose projects were required to meet the full requirements of EVMS as specified primarily by government entities. Now, for even some small projects, we have found that corporate management is requiring a more unbiased project-reporting mechanism. In addition, regulations like the Sarbanes-Oxley Act have reinforced the need for more stringent internal reporting on projects. Auditors of companies required to file financial information with the Securities and Exchange Commission now want detailed information on projects that affect the financial reporting process. In our experience, EV is being used more frequently to satisfy these requirements.
In this second edition, we have added two new parts, Parts VI and VII, to address some common needs not covered in the first edition. In Part VI, Implementations, we present some practical advice to companies that are not required to meet all the formal EVMS criteria but want to obtain the benefits of EVMS. Chapters 13 through 15 deal with various implementation processes and requirements. The new Part VII, Emerging Practices, introduces some developing EV practices: Chapters 16 and 17 present details of two popular emerging practices developed to mitigate some of the recognized shortcomings of EVMS.
Other changes and new items in this second edition include clarification and reorganization of the material, as well as the most recent changes in EVMS regulation, acceptance, and certification. This edition also provides a bibliography, a glossary of key terms, the complete 32 criteria presented in numerical order (Appendix A), and the answers and solutions to problems from some of the chapter reviews (Appendix B).
We hope that you will find our travel together through the Earned Value Management System enlightening, interesting, and beneficial.
Charles I. Budd Charlene S. Budd Jackson, Georgia