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(EVM-2471) Misuse of Earned Value Management Results in Erroneous Conclusions

Level: Intermediate
Author(s): Charles F. Lappenbusch, Jr. CCP EVP PSP
Venue: 2017 AACE International Annual Meeting, Orlando, FL

Abstract: Earned Value Management (EVM), if used correctly, greatly enhances project control responsiveness and the credibility of other project control tools, and vice versa. The question becomes: When does EVM best provide useful Key Performance Indicators (KPIs)? The reasonableness and timeliness of these EVM KPIs are critical to quickly identify and implement corrective actions. When EVM is misused, it provides erroneous information, degrades the usefulness of the other tools and provides misrepresentative KPIs; thus, resulting in the implementation of misguided actions.

The purpose of this paper is to facilitate a better understanding of how and when EVM can best provide accurate and timely KPIs. “What If” scenarios will demonstrate how the proper and improper use of EVM may lead to either meaningful or misleading conclusions, respectively. It will also discuss the positive and negative impacts of misleading EVM KPIs.