Productivity, Performance, & Earned Value

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

Hi Moj, I would very much agree with your quote above by Stephen Lesckha. In my experience as a project manager, earned value metrics are a necessary component of project success. At a basic level, earned value (EV), planned value (PV), actual cost (AC), cost variance (CV), and schedule variance (SV) can adequately summarize project progress. In my opinion, these metrics are simple enough where they can provide meaningful information to the project team regardless of the team's experience or background in Earned Value Management.

One of the more complex metrics that I've had great experience with is TCPI (To-Complete Performance Index). TCPI will tell you what CPI the project must run at to hit the current EAC. By comparing the TCPI vs past CPI performance, you can gain insight into how realistic your EAC is. For example, if the TCPI to hit your EAC is 1.1 and the project is performing at a 0.9, that project would need thorough corrective actions to improve performance and hit the EAC. If no corrective actions are in place, then the project may need to up their EAC to a more realistic target.

I completely agree with your statement above that the metrics can be misleading if interpreted incorrectly. I've experienced this in past projects and have seen the negative impact it can have. For this reason, with project teams and stakeholders that are less familiar with Earned Value Management, I always try to keep the metrics as simple as possible using EV, PV, AC, CV, and SV mentioned above. If I'm using more complex metrics, such as TCPI, I'll always give a quick disclaimer as to what the metric is and try to gauge the audience to verify whether they're understanding the interpretation.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

Hi Moj, I would very much agree with your quote above by Stephen Lesckha. In my experience as a project manager, earned value metrics are a necessary component of project success. At a basic level, earned value (EV), planned value (PV), actual cost (AC), cost variance (CV), and schedule variance (SV) can adequately summarize project progress. In my opinion, these metrics are simple enough where they can provide meaningful information to the project team regardless of the team's experience or background in Earned Value Management.

One of the more complex metrics that I've had great experience with is TCPI (To-Complete Performance Index). TCPI will tell you what CPI the project must run at to hit the current EAC. By comparing the TCPI vs past CPI performance, you can gain insight into how realistic your EAC is. For example, if the TCPI to hit your EAC is 1.1 and the project is performing at a 0.9, that project would need thorough corrective actions to improve performance and hit the EAC. If no corrective actions are in place, then the project may need to up their EAC to a more realistic target.

I completely agree with your statement above that the metrics can be misleading if interpreted incorrectly. I've experienced this in past projects and have seen the negative impact it can have. For this reason, with project teams and stakeholders that are less familiar with Earned Value Management, I always try to keep the metrics as simple as possible using EV, PV, AC, CV, and SV mentioned above. If I'm using more complex metrics, such as TCPI, I'll always give a quick disclaimer as to what the metric is and try to gauge the audience to verify whether they're understanding the interpretation.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

Hi Moj, I would very much agree with your quote above by Stephen Lesckha. In my experience as a project manager, earned value metrics are a necessary component of project success. At a basic level, earned value (EV), planned value (PV), actual cost (AC), cost variance (CV), and schedule variance (SV) can adequately summarize project progress. In my opinion, these metrics are simple enough where they can provide meaningful information to the project team regardless of the team's experience or background in Earned Value Management.

One of the more complex metrics that I've had great experience with is TCPI (To-Complete Performance Index). TCPI will tell you what CPI the project must run at to hit the current EAC. By comparing the TCPI vs past CPI performance, you can gain insight into how realistic your EAC is. For example, if the TCPI to hit your EAC is 1.1 and the project is performing at a 0.9, that project would need thorough corrective actions to improve performance and hit the EAC. If no corrective actions are in place, then the project may need to up their EAC to a more realistic target.

I completely agree with your statement above that the metrics can be misleading if interpreted incorrectly. I've experienced this in past projects and have seen the negative impact it can have. For this reason, with project teams and stakeholders that are less familiar with Earned Value Management, I always try to keep the metrics as simple as possible using EV, PV, AC, CV, and SV mentioned above. If I'm using more complex metrics, such as TCPI, I'll always give a quick disclaimer as to what the metric is and try to gauge the audience to verify whether they're understanding the interpretation.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

Kyle:

Are your contracts for which you are using earned value mostly cost reimbursable or fixed price?  

------------------------------
Christopher (Chris) Carson FAACE
Director of Program & Project Controls, Vice President
Virginia Beach
Chris.Carson@Arcadis.com

Original Message:
Sent: 10-25-2024 11:00 AM
From: Kyle Palmer
Subject: The Power (and Pitfalls) of Metrics in Project Management

Hi Moj, I would very much agree with your quote above by Stephen Lesckha. In my experience as a project manager, earned value metrics are a necessary component of project success. At a basic level, earned value (EV), planned value (PV), actual cost (AC), cost variance (CV), and schedule variance (SV) can adequately summarize project progress. In my opinion, these metrics are simple enough where they can provide meaningful information to the project team regardless of the team's experience or background in Earned Value Management.

One of the more complex metrics that I've had great experience with is TCPI (To-Complete Performance Index). TCPI will tell you what CPI the project must run at to hit the current EAC. By comparing the TCPI vs past CPI performance, you can gain insight into how realistic your EAC is. For example, if the TCPI to hit your EAC is 1.1 and the project is performing at a 0.9, that project would need thorough corrective actions to improve performance and hit the EAC. If no corrective actions are in place, then the project may need to up their EAC to a more realistic target.

I completely agree with your statement above that the metrics can be misleading if interpreted incorrectly. I've experienced this in past projects and have seen the negative impact it can have. For this reason, with project teams and stakeholders that are less familiar with Earned Value Management, I always try to keep the metrics as simple as possible using EV, PV, AC, CV, and SV mentioned above. If I'm using more complex metrics, such as TCPI, I'll always give a quick disclaimer as to what the metric is and try to gauge the audience to verify whether they're understanding the interpretation.

------------------------------
Kyle Palmer
Consultant
Dallas
kpalmer@k2consulting.com

Original Message:
Sent: 09-04-2024 04:30 AM
From: Moj Kesheh
Subject: The Power (and Pitfalls) of Metrics in Project Management

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

------------------------------
Moj Kesheh, PSP, FCIArb
Senior Director
Forensic & Litigation Consulting – Construction, Projects & Assets
FTI Consulting
London | United Kingdom
Moj.Kesheh@fticonsulting.com
------------------------------

------------------------------
Kyle Palmer
Consultant
Dallas
kpalmer@k2consulting.com

Original Message:
Sent: 10-29-2024 11:34 AM
From: Christopher (Chris) Carson
Subject: The Power (and Pitfalls) of Metrics in Project Management

Kyle:

Are your contracts for which you are using earned value mostly cost reimbursable or fixed price?  

------------------------------
Christopher (Chris) Carson FAACE
Director of Program & Project Controls, Vice President
Virginia Beach
Chris.Carson@Arcadis.com

Original Message:
Sent: 10-25-2024 11:00 AM
From: Kyle Palmer
Subject: The Power (and Pitfalls) of Metrics in Project Management

Hi Moj, I would very much agree with your quote above by Stephen Lesckha. In my experience as a project manager, earned value metrics are a necessary component of project success. At a basic level, earned value (EV), planned value (PV), actual cost (AC), cost variance (CV), and schedule variance (SV) can adequately summarize project progress. In my opinion, these metrics are simple enough where they can provide meaningful information to the project team regardless of the team's experience or background in Earned Value Management.

One of the more complex metrics that I've had great experience with is TCPI (To-Complete Performance Index). TCPI will tell you what CPI the project must run at to hit the current EAC. By comparing the TCPI vs past CPI performance, you can gain insight into how realistic your EAC is. For example, if the TCPI to hit your EAC is 1.1 and the project is performing at a 0.9, that project would need thorough corrective actions to improve performance and hit the EAC. If no corrective actions are in place, then the project may need to up their EAC to a more realistic target.

I completely agree with your statement above that the metrics can be misleading if interpreted incorrectly. I've experienced this in past projects and have seen the negative impact it can have. For this reason, with project teams and stakeholders that are less familiar with Earned Value Management, I always try to keep the metrics as simple as possible using EV, PV, AC, CV, and SV mentioned above. If I'm using more complex metrics, such as TCPI, I'll always give a quick disclaimer as to what the metric is and try to gauge the audience to verify whether they're understanding the interpretation.

------------------------------
Kyle Palmer
Consultant
Dallas
kpalmer@k2consulting.com

Original Message:
Sent: 09-04-2024 04:30 AM
From: Moj Kesheh
Subject: The Power (and Pitfalls) of Metrics in Project Management

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

------------------------------
Moj Kesheh, PSP, FCIArb
Senior Director
Forensic & Litigation Consulting – Construction, Projects & Assets
FTI Consulting
London | United Kingdom
Moj.Kesheh@fticonsulting.com
------------------------------

Kyle:

It sounds like we are in agreement, I advocate for the use of EVM on all projects, whether cost reimbursable or fixed price.   I do think the difference is more related to fixed price contracts loading the price to the owner, so as you note, cost performance is less useful when Actual Costs are only a percentage of the BAC instead of a true assessment of current contractor costs.

I think you mentioned it earlier but EVM on fixed price contracts carry a risk that, if the project is running late, the schedule metrics during the final third or so of the project rapidly become unreliable so use of Earned Schedule is vital for accurate assessments.  Since SV=0 and SPI = 1 at project completion, regardless of the completion date, we just can't rely on EVM in that situation.

But for me, that's a major reason why it matters if the contract is fixed price.  I like using the schedule for invoicing so it forces more attention on the status. 

My fellow Arcadian, Andrew Dick, and I wrote a paper using our version of EVM (loading duration-days, as we call it) that works very well on fixed price contracts and provides accurate metrics all the way to completion even if late.  I've attached it, it's particularly useful if the schedule is not loaded with costs or other resources and it doesn't require a contractor to do anything in the way of loading.  In our testing of the process, Andrew assigned arbitrary costs to the resources, and it seems to offer value on the cost side as well as the time side.  Since the AC input to the EVMS is actual durations, the process allows for resource overruns, which means the BAC can be greater than the planned value, which emulates cost reimbursable results quite well.  I've attached the paper.   

Good discussion!

------------------------------
Kyle Palmer
Consultant
Dallas
kpalmer@k2consulting.com

Original Message:
Sent: 10-29-2024 11:34 AM
From: Christopher (Chris) Carson
Subject: The Power (and Pitfalls) of Metrics in Project Management

Kyle:

Are your contracts for which you are using earned value mostly cost reimbursable or fixed price?  

------------------------------
Christopher (Chris) Carson FAACE
Director of Program & Project Controls, Vice President
Virginia Beach
Chris.Carson@Arcadis.com

Original Message:
Sent: 10-25-2024 11:00 AM
From: Kyle Palmer
Subject: The Power (and Pitfalls) of Metrics in Project Management

Hi Moj, I would very much agree with your quote above by Stephen Lesckha. In my experience as a project manager, earned value metrics are a necessary component of project success. At a basic level, earned value (EV), planned value (PV), actual cost (AC), cost variance (CV), and schedule variance (SV) can adequately summarize project progress. In my opinion, these metrics are simple enough where they can provide meaningful information to the project team regardless of the team's experience or background in Earned Value Management.

One of the more complex metrics that I've had great experience with is TCPI (To-Complete Performance Index). TCPI will tell you what CPI the project must run at to hit the current EAC. By comparing the TCPI vs past CPI performance, you can gain insight into how realistic your EAC is. For example, if the TCPI to hit your EAC is 1.1 and the project is performing at a 0.9, that project would need thorough corrective actions to improve performance and hit the EAC. If no corrective actions are in place, then the project may need to up their EAC to a more realistic target.

I completely agree with your statement above that the metrics can be misleading if interpreted incorrectly. I've experienced this in past projects and have seen the negative impact it can have. For this reason, with project teams and stakeholders that are less familiar with Earned Value Management, I always try to keep the metrics as simple as possible using EV, PV, AC, CV, and SV mentioned above. If I'm using more complex metrics, such as TCPI, I'll always give a quick disclaimer as to what the metric is and try to gauge the audience to verify whether they're understanding the interpretation.

------------------------------
Kyle Palmer
Consultant
Dallas
kpalmer@k2consulting.com

Original Message:
Sent: 09-04-2024 04:30 AM
From: Moj Kesheh
Subject: The Power (and Pitfalls) of Metrics in Project Management

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

------------------------------
Moj Kesheh, PSP, FCIArb
Senior Director
Forensic & Litigation Consulting – Construction, Projects & Assets
FTI Consulting
London | United Kingdom
Moj.Kesheh@fticonsulting.com
------------------------------

Chris,

Really appreciate you sharing that paper. I'm very interested in the duration-day concept, especially for projects that are nearing completion. As you mentioned, SPI becomes less and less reliable when nearing project completion and this appears to be a suitable alternative.

I'm envisioning a scenario of using standard SPI on projects up until a pre-defined project % complete is reached, at which time you can phase in the duration-day analysis. Will need to think more on that application, but appreciate you sharing this information.

Kyle

Kyle:

It sounds like we are in agreement, I advocate for the use of EVM on all projects, whether cost reimbursable or fixed price.   I do think the difference is more related to fixed price contracts loading the price to the owner, so as you note, cost performance is less useful when Actual Costs are only a percentage of the BAC instead of a true assessment of current contractor costs.

I think you mentioned it earlier but EVM on fixed price contracts carry a risk that, if the project is running late, the schedule metrics during the final third or so of the project rapidly become unreliable so use of Earned Schedule is vital for accurate assessments.  Since SV=0 and SPI = 1 at project completion, regardless of the completion date, we just can't rely on EVM in that situation.

But for me, that's a major reason why it matters if the contract is fixed price.  I like using the schedule for invoicing so it forces more attention on the status. 

My fellow Arcadian, Andrew Dick, and I wrote a paper using our version of EVM (loading duration-days, as we call it) that works very well on fixed price contracts and provides accurate metrics all the way to completion even if late.  I've attached it, it's particularly useful if the schedule is not loaded with costs or other resources and it doesn't require a contractor to do anything in the way of loading.  In our testing of the process, Andrew assigned arbitrary costs to the resources, and it seems to offer value on the cost side as well as the time side.  Since the AC input to the EVMS is actual durations, the process allows for resource overruns, which means the BAC can be greater than the planned value, which emulates cost reimbursable results quite well.  I've attached the paper.   

Good discussion!

------------------------------
Kyle Palmer
Consultant
Dallas
kpalmer@k2consulting.com

Original Message:
Sent: 10-29-2024 11:34 AM
From: Christopher (Chris) Carson
Subject: The Power (and Pitfalls) of Metrics in Project Management

Kyle:

Are your contracts for which you are using earned value mostly cost reimbursable or fixed price?  

------------------------------
Christopher (Chris) Carson FAACE
Director of Program & Project Controls, Vice President
Virginia Beach
Chris.Carson@Arcadis.com

Original Message:
Sent: 10-25-2024 11:00 AM
From: Kyle Palmer
Subject: The Power (and Pitfalls) of Metrics in Project Management

Hi Moj, I would very much agree with your quote above by Stephen Lesckha. In my experience as a project manager, earned value metrics are a necessary component of project success. At a basic level, earned value (EV), planned value (PV), actual cost (AC), cost variance (CV), and schedule variance (SV) can adequately summarize project progress. In my opinion, these metrics are simple enough where they can provide meaningful information to the project team regardless of the team's experience or background in Earned Value Management.

One of the more complex metrics that I've had great experience with is TCPI (To-Complete Performance Index). TCPI will tell you what CPI the project must run at to hit the current EAC. By comparing the TCPI vs past CPI performance, you can gain insight into how realistic your EAC is. For example, if the TCPI to hit your EAC is 1.1 and the project is performing at a 0.9, that project would need thorough corrective actions to improve performance and hit the EAC. If no corrective actions are in place, then the project may need to up their EAC to a more realistic target.

I completely agree with your statement above that the metrics can be misleading if interpreted incorrectly. I've experienced this in past projects and have seen the negative impact it can have. For this reason, with project teams and stakeholders that are less familiar with Earned Value Management, I always try to keep the metrics as simple as possible using EV, PV, AC, CV, and SV mentioned above. If I'm using more complex metrics, such as TCPI, I'll always give a quick disclaimer as to what the metric is and try to gauge the audience to verify whether they're understanding the interpretation.

------------------------------
Kyle Palmer
Consultant
Dallas
kpalmer@k2consulting.com

Original Message:
Sent: 09-04-2024 04:30 AM
From: Moj Kesheh
Subject: The Power (and Pitfalls) of Metrics in Project Management

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

------------------------------
Moj Kesheh, PSP, FCIArb
Senior Director
Forensic & Litigation Consulting – Construction, Projects & Assets
FTI Consulting
London | United Kingdom
Moj.Kesheh@fticonsulting.com
------------------------------

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

I find EV discussion very interesting, and I have some comments based on my experience of EV which is being a contributor to "Australian Standard 4817 Project performance measurement using Earned Value" and setting up EV systems for 4 medium sized projects between 2000 and 2010.

Planned Value, I see five Planned value curves, Early, Early Levelled, Late, Late levelled and the Performance Measurement Baseline. I usually set the PMB halfway between the Early and Late which in turn give the project manager some leeway before being behind. But unfortunately, most planning and scheduling software does not give the flexibility to display all these curves at the same time.

Earned Value, I have found that most software will give this reasonably well when the user know what they are doing.

Actual Costs, I have found on large complex projects which have many subcontractors, POs and a day labour force etc. that collecting the Actual Costs accurately is a mammoth task and requires all the senior management on board and very slick systems including calculating accurate accruals for all unpaid but complete work. If this is not done well accurately then the data is almost useless. I have found that getting everyone to comply when there are many organisations involved in a project is very difficult. 

ETC, this is often not completed, and I remember that the old PMI EV Standard did not even mention the ETC curve. Getting accurate actuals and ETCs into a software package like P6 or any other commercial planning and scheduling software is also very difficult.

If you are complementing using EV on a large complex project, then make sure you setup your systems early, including procedures etc, review the structure of your contracts, POs and day labour time booking so all costs may be mapped to an EV activity in a timely fashion, train your staff and be prepared to lose the people who will not comply who will in turn make running the EV systems very hard. 

Also, do not underestimate the number of people require to run an EV system. One project I was involved in auditing the scheduling systems, which was started without EV and had five schedulers. It was decided to implement EV and then the number of schedulers and people involved in running the EV system went up to thirty people. This project was built about 10 years ago and was worth about AUD4billion.

I have found EV systems either give great results or are a big waste of money when they are inaccurate. Usually the Planned and Earned are OK but then the wheels fall off when trying to get the Actuals corrrect and align with the Earned.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

I find EV discussion very interesting, and I have some comments based on my experience of EV which is being a contributor to "Australian Standard 4817 Project performance measurement using Earned Value" and setting up EV systems for 4 medium sized projects between 2000 and 2010.

Planned Value, I see five Planned value curves, Early, Early Levelled, Late, Late levelled and the Performance Measurement Baseline. I usually set the PMB halfway between the Early and Late which in turn give the project manager some leeway before being behind. But unfortunately, most planning and scheduling software does not give the flexibility to display all these curves at the same time.

Earned Value, I have found that most software will give this reasonably well when the user know what they are doing.

Actual Costs, I have found on large complex projects which have many subcontractors, POs and a day labour force etc. that collecting the Actual Costs accurately is a mammoth task and requires all the senior management on board and very slick systems including calculating accurate accruals for all unpaid but complete work. If this is not done well accurately then the data is almost useless. I have found that getting everyone to comply when there are many organisations involved in a project is very difficult. 

ETC, this is often not completed, and I remember that the old PMI EV Standard did not even mention the ETC curve. Getting accurate actuals and ETCs into a software package like P6 or any other commercial planning and scheduling software is also very difficult.

If you are complementing using EV on a large complex project, then make sure you setup your systems early, including procedures etc, review the structure of your contracts, POs and day labour time booking so all costs may be mapped to an EV activity in a timely fashion, train your staff and be prepared to lose the people who will not comply who will in turn make running the EV systems very hard. 

Also, do not underestimate the number of people require to run an EV system. One project I was involved in auditing the scheduling systems, which was started without EV and had five schedulers. It was decided to implement EV and then the number of schedulers and people involved in running the EV system went up to thirty people. This project was built about 10 years ago and was worth about AUD4billion.

I have found EV systems either give great results or are a big waste of money when they are inaccurate. Usually the Planned and Earned are OK but then the wheels fall off when trying to get the Actuals corrrect and align with the Earned.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

On the mining and infrastructure projects I was working on we did not have a QS.

To get the EV Actual Costs I put into all contracts that the contractors had to submit their monthly claim with an updated program as at the end of the month which I used as the basis of updating the master program and calculating the EV Actual Costs.

I find EV discussion very interesting, and I have some comments based on my experience of EV which is being a contributor to "Australian Standard 4817 Project performance measurement using Earned Value" and setting up EV systems for 4 medium sized projects between 2000 and 2010.

Planned Value, I see five Planned value curves, Early, Early Levelled, Late, Late levelled and the Performance Measurement Baseline. I usually set the PMB halfway between the Early and Late which in turn give the project manager some leeway before being behind. But unfortunately, most planning and scheduling software does not give the flexibility to display all these curves at the same time.

Earned Value, I have found that most software will give this reasonably well when the user know what they are doing.

Actual Costs, I have found on large complex projects which have many subcontractors, POs and a day labour force etc. that collecting the Actual Costs accurately is a mammoth task and requires all the senior management on board and very slick systems including calculating accurate accruals for all unpaid but complete work. If this is not done well accurately then the data is almost useless. I have found that getting everyone to comply when there are many organisations involved in a project is very difficult. 

ETC, this is often not completed, and I remember that the old PMI EV Standard did not even mention the ETC curve. Getting accurate actuals and ETCs into a software package like P6 or any other commercial planning and scheduling software is also very difficult.

If you are complementing using EV on a large complex project, then make sure you setup your systems early, including procedures etc, review the structure of your contracts, POs and day labour time booking so all costs may be mapped to an EV activity in a timely fashion, train your staff and be prepared to lose the people who will not comply who will in turn make running the EV systems very hard. 

Also, do not underestimate the number of people require to run an EV system. One project I was involved in auditing the scheduling systems, which was started without EV and had five schedulers. It was decided to implement EV and then the number of schedulers and people involved in running the EV system went up to thirty people. This project was built about 10 years ago and was worth about AUD4billion.

I have found EV systems either give great results or are a big waste of money when they are inaccurate. Usually the Planned and Earned are OK but then the wheels fall off when trying to get the Actuals corrrect and align with the Earned.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

AACE has a definition called estimated actual cost. Is that the same

ESTIMATED ACTUAL COSTS – In earned value management according to the ANSI EIA 748 standard, these are cost
added to cost from the accounting system to create the appropriate actual cost of work performed (ACWP).
Estimated actuals are sometimes necessary to ensure the ANSI – EIA 748 requirement that budgeted cost of work
performed (BCWP) is on the same basis as the reported ACWP. The basis for estimated actuals is documented and
reversed which in the cost is accrued in the accounting books of record. Example of records may include invoices
received, material purchase orders, submitted journal vouchers. (October 2013)

On the mining and infrastructure projects I was working on we did not have a QS.

To get the EV Actual Costs I put into all contracts that the contractors had to submit their monthly claim with an updated program as at the end of the month which I used as the basis of updating the master program and calculating the EV Actual Costs.

I find EV discussion very interesting, and I have some comments based on my experience of EV which is being a contributor to "Australian Standard 4817 Project performance measurement using Earned Value" and setting up EV systems for 4 medium sized projects between 2000 and 2010.

Planned Value, I see five Planned value curves, Early, Early Levelled, Late, Late levelled and the Performance Measurement Baseline. I usually set the PMB halfway between the Early and Late which in turn give the project manager some leeway before being behind. But unfortunately, most planning and scheduling software does not give the flexibility to display all these curves at the same time.

Earned Value, I have found that most software will give this reasonably well when the user know what they are doing.

Actual Costs, I have found on large complex projects which have many subcontractors, POs and a day labour force etc. that collecting the Actual Costs accurately is a mammoth task and requires all the senior management on board and very slick systems including calculating accurate accruals for all unpaid but complete work. If this is not done well accurately then the data is almost useless. I have found that getting everyone to comply when there are many organisations involved in a project is very difficult. 

ETC, this is often not completed, and I remember that the old PMI EV Standard did not even mention the ETC curve. Getting accurate actuals and ETCs into a software package like P6 or any other commercial planning and scheduling software is also very difficult.

If you are complementing using EV on a large complex project, then make sure you setup your systems early, including procedures etc, review the structure of your contracts, POs and day labour time booking so all costs may be mapped to an EV activity in a timely fashion, train your staff and be prepared to lose the people who will not comply who will in turn make running the EV systems very hard. 

Also, do not underestimate the number of people require to run an EV system. One project I was involved in auditing the scheduling systems, which was started without EV and had five schedulers. It was decided to implement EV and then the number of schedulers and people involved in running the EV system went up to thirty people. This project was built about 10 years ago and was worth about AUD4billion.

I have found EV systems either give great results or are a big waste of money when they are inaccurate. Usually the Planned and Earned are OK but then the wheels fall off when trying to get the Actuals corrrect and align with the Earned.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

AACE has a definition called estimated actual cost. Is that the same

ESTIMATED ACTUAL COSTS – In earned value management according to the ANSI EIA 748 standard, these are cost
added to cost from the accounting system to create the appropriate actual cost of work performed (ACWP).
Estimated actuals are sometimes necessary to ensure the ANSI – EIA 748 requirement that budgeted cost of work
performed (BCWP) is on the same basis as the reported ACWP. The basis for estimated actuals is documented and
reversed which in the cost is accrued in the accounting books of record. Example of records may include invoices
received, material purchase orders, submitted journal vouchers. (October 2013)

On the mining and infrastructure projects I was working on we did not have a QS.

To get the EV Actual Costs I put into all contracts that the contractors had to submit their monthly claim with an updated program as at the end of the month which I used as the basis of updating the master program and calculating the EV Actual Costs.

I find EV discussion very interesting, and I have some comments based on my experience of EV which is being a contributor to "Australian Standard 4817 Project performance measurement using Earned Value" and setting up EV systems for 4 medium sized projects between 2000 and 2010.

Planned Value, I see five Planned value curves, Early, Early Levelled, Late, Late levelled and the Performance Measurement Baseline. I usually set the PMB halfway between the Early and Late which in turn give the project manager some leeway before being behind. But unfortunately, most planning and scheduling software does not give the flexibility to display all these curves at the same time.

Earned Value, I have found that most software will give this reasonably well when the user know what they are doing.

Actual Costs, I have found on large complex projects which have many subcontractors, POs and a day labour force etc. that collecting the Actual Costs accurately is a mammoth task and requires all the senior management on board and very slick systems including calculating accurate accruals for all unpaid but complete work. If this is not done well accurately then the data is almost useless. I have found that getting everyone to comply when there are many organisations involved in a project is very difficult. 

ETC, this is often not completed, and I remember that the old PMI EV Standard did not even mention the ETC curve. Getting accurate actuals and ETCs into a software package like P6 or any other commercial planning and scheduling software is also very difficult.

If you are complementing using EV on a large complex project, then make sure you setup your systems early, including procedures etc, review the structure of your contracts, POs and day labour time booking so all costs may be mapped to an EV activity in a timely fashion, train your staff and be prepared to lose the people who will not comply who will in turn make running the EV systems very hard. 

Also, do not underestimate the number of people require to run an EV system. One project I was involved in auditing the scheduling systems, which was started without EV and had five schedulers. It was decided to implement EV and then the number of schedulers and people involved in running the EV system went up to thirty people. This project was built about 10 years ago and was worth about AUD4billion.

I have found EV systems either give great results or are a big waste of money when they are inaccurate. Usually the Planned and Earned are OK but then the wheels fall off when trying to get the Actuals corrrect and align with the Earned.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

Hi Michael,

Estimated Actual Costs (also known as estimated ACWP) have a slightly different application. They are often used in material planning to keep Budgeted Cost of Work Performed (BCWP) and Actual Costs (AC) aligned. One of the foundations of material planning is that BCWP must be credited in the same period that the work is completed and that ACWP is applied. 

BCWP for material is often planned according to the point of receipt, so what happens when material has been received but the project has outstanding invoices that haven't been paid at the end of the month? Well, the project will have earned the BCWP but will show zero AC until they pay the invoice. This is going to result in a false variance in the earned value, claiming that the project earned value without actually paying any cost for it.

This is where Estimated Actual Costs come into play. The project can use an estimated actual cost to keep BCWP and AC aligned in that reporting period. Once the invoice is paid, and the cost is captured by the project, the estimated actual cost that was applied is removed. This keeps BCWP and AC aligned and improves the accuracy of your earned value metrics.

Kyle

AACE has a definition called estimated actual cost. Is that the same

ESTIMATED ACTUAL COSTS – In earned value management according to the ANSI EIA 748 standard, these are cost
added to cost from the accounting system to create the appropriate actual cost of work performed (ACWP).
Estimated actuals are sometimes necessary to ensure the ANSI – EIA 748 requirement that budgeted cost of work
performed (BCWP) is on the same basis as the reported ACWP. The basis for estimated actuals is documented and
reversed which in the cost is accrued in the accounting books of record. Example of records may include invoices
received, material purchase orders, submitted journal vouchers. (October 2013)

On the mining and infrastructure projects I was working on we did not have a QS.

To get the EV Actual Costs I put into all contracts that the contractors had to submit their monthly claim with an updated program as at the end of the month which I used as the basis of updating the master program and calculating the EV Actual Costs.

I find EV discussion very interesting, and I have some comments based on my experience of EV which is being a contributor to "Australian Standard 4817 Project performance measurement using Earned Value" and setting up EV systems for 4 medium sized projects between 2000 and 2010.

Planned Value, I see five Planned value curves, Early, Early Levelled, Late, Late levelled and the Performance Measurement Baseline. I usually set the PMB halfway between the Early and Late which in turn give the project manager some leeway before being behind. But unfortunately, most planning and scheduling software does not give the flexibility to display all these curves at the same time.

Earned Value, I have found that most software will give this reasonably well when the user know what they are doing.

Actual Costs, I have found on large complex projects which have many subcontractors, POs and a day labour force etc. that collecting the Actual Costs accurately is a mammoth task and requires all the senior management on board and very slick systems including calculating accurate accruals for all unpaid but complete work. If this is not done well accurately then the data is almost useless. I have found that getting everyone to comply when there are many organisations involved in a project is very difficult. 

ETC, this is often not completed, and I remember that the old PMI EV Standard did not even mention the ETC curve. Getting accurate actuals and ETCs into a software package like P6 or any other commercial planning and scheduling software is also very difficult.

If you are complementing using EV on a large complex project, then make sure you setup your systems early, including procedures etc, review the structure of your contracts, POs and day labour time booking so all costs may be mapped to an EV activity in a timely fashion, train your staff and be prepared to lose the people who will not comply who will in turn make running the EV systems very hard. 

Also, do not underestimate the number of people require to run an EV system. One project I was involved in auditing the scheduling systems, which was started without EV and had five schedulers. It was decided to implement EV and then the number of schedulers and people involved in running the EV system went up to thirty people. This project was built about 10 years ago and was worth about AUD4billion.

I have found EV systems either give great results or are a big waste of money when they are inaccurate. Usually the Planned and Earned are OK but then the wheels fall off when trying to get the Actuals corrrect and align with the Earned.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.

Hi Michael,

Estimated Actual Costs (also known as estimated ACWP) have a slightly different application. They are often used in material planning to keep Budgeted Cost of Work Performed (BCWP) and Actual Costs (AC) aligned. One of the foundations of material planning is that BCWP must be credited in the same period that the work is completed and that ACWP is applied. 

BCWP for material is often planned according to the point of receipt, so what happens when material has been received but the project has outstanding invoices that haven't been paid at the end of the month? Well, the project will have earned the BCWP but will show zero AC until they pay the invoice. This is going to result in a false variance in the earned value, claiming that the project earned value without actually paying any cost for it.

This is where Estimated Actual Costs come into play. The project can use an estimated actual cost to keep BCWP and AC aligned in that reporting period. Once the invoice is paid, and the cost is captured by the project, the estimated actual cost that was applied is removed. This keeps BCWP and AC aligned and improves the accuracy of your earned value metrics.

Kyle

AACE has a definition called estimated actual cost. Is that the same

ESTIMATED ACTUAL COSTS – In earned value management according to the ANSI EIA 748 standard, these are cost
added to cost from the accounting system to create the appropriate actual cost of work performed (ACWP).
Estimated actuals are sometimes necessary to ensure the ANSI – EIA 748 requirement that budgeted cost of work
performed (BCWP) is on the same basis as the reported ACWP. The basis for estimated actuals is documented and
reversed which in the cost is accrued in the accounting books of record. Example of records may include invoices
received, material purchase orders, submitted journal vouchers. (October 2013)

On the mining and infrastructure projects I was working on we did not have a QS.

To get the EV Actual Costs I put into all contracts that the contractors had to submit their monthly claim with an updated program as at the end of the month which I used as the basis of updating the master program and calculating the EV Actual Costs.

I find EV discussion very interesting, and I have some comments based on my experience of EV which is being a contributor to "Australian Standard 4817 Project performance measurement using Earned Value" and setting up EV systems for 4 medium sized projects between 2000 and 2010.

Planned Value, I see five Planned value curves, Early, Early Levelled, Late, Late levelled and the Performance Measurement Baseline. I usually set the PMB halfway between the Early and Late which in turn give the project manager some leeway before being behind. But unfortunately, most planning and scheduling software does not give the flexibility to display all these curves at the same time.

Earned Value, I have found that most software will give this reasonably well when the user know what they are doing.

Actual Costs, I have found on large complex projects which have many subcontractors, POs and a day labour force etc. that collecting the Actual Costs accurately is a mammoth task and requires all the senior management on board and very slick systems including calculating accurate accruals for all unpaid but complete work. If this is not done well accurately then the data is almost useless. I have found that getting everyone to comply when there are many organisations involved in a project is very difficult. 

ETC, this is often not completed, and I remember that the old PMI EV Standard did not even mention the ETC curve. Getting accurate actuals and ETCs into a software package like P6 or any other commercial planning and scheduling software is also very difficult.

If you are complementing using EV on a large complex project, then make sure you setup your systems early, including procedures etc, review the structure of your contracts, POs and day labour time booking so all costs may be mapped to an EV activity in a timely fashion, train your staff and be prepared to lose the people who will not comply who will in turn make running the EV systems very hard. 

Also, do not underestimate the number of people require to run an EV system. One project I was involved in auditing the scheduling systems, which was started without EV and had five schedulers. It was decided to implement EV and then the number of schedulers and people involved in running the EV system went up to thirty people. This project was built about 10 years ago and was worth about AUD4billion.

I have found EV systems either give great results or are a big waste of money when they are inaccurate. Usually the Planned and Earned are OK but then the wheels fall off when trying to get the Actuals corrrect and align with the Earned.

Metrics are critical in project management. They help measure progress, inform decisions, and keep teams on track. However, relying on metrics alone can sometimes be misleading if not interpreted correctly. Today's quote reminds us of the importance of using metrics wisely:

Quote of the Day

"Without Metrics, You're Just Another Guy with an Opinion."
~ Stephen Leschka, Hewlett Packard

To what extent do you think metrics are essential in project management and control? Have you found them to be more helpful or misleading in your experience? Share the key metrics you have used in your projects and any insights on how they have influenced your outcomes, both positively and negatively. Let's discuss!

Thanks.