Earned Value Management: A Global and Cross-Industry Perspective on Current EVM Practice
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Earned Value Management - Lingguang Song
Earned Value Management: A Global and Cross-Industry Perspective on Current EVM Practice
ISBN: 978-1-935589-06-8
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10 9 8 7 6 5 4 3 2 1
Project Management Institute
EARNED VALUE MANAGEMENT
A GLOBAL AND CROSS-INDUSTRY PERSPECTIVE ON CURRENT EVM PRACTICE
Lingguang Song, PhD
Table of Contents
Executive Summary
Acknowledgement
Chapter 1 Introduction
1.1 Background
1.2 Problem Statement
1.3 Objectives and Scope
1.4 Methodology
1.5 Survey Design and Data Collection
1.6 Report Outline
Chapter 2 Literature Review
2.1 Origin and History of EVM
2.2 Related Studies
Chapter 3 An Overview of Current EVM Practice
3.1 EVM in U.S. Government Agencies
3.2 EVM in Private Industry
3.3 EVM in Other Countries
Chapter 4 EVM Usage in Different Industries And Countries
4.1 Sample Characteristics
4.2 EVM User Classification
4.3 EVM Usage
4.4 EVM Implementation and Maturity
Chapter 5 EVM Practice Standards And Service Market
5.1 EVM Practice Standards
5.2 Survey Results on EVM Standards
5.3 Service Market Overview
5.4 Survey Results on EVM Service Market
Chapter 6 EVM Contributions and Usage Improvement
6.1 EVM Contributions
6.2 Barriers for Improving EVM Adoption and Usage
6.3 Critical Success Factors for EVM Implementation
Chapter 7 Conclusions
7.1 Overview
7.2 Major Findings
7.3 Limitations
References
Appendix A
Appendix B
List of Figures
Figure 1-1. Research Strategy
Figure 1-2. System Model for EVM Practice
Figure 4-1. Primary Job Functions
Figure 4-2. Project Management Experience
Figure 4-3. Organizations by Country (≥10 Responses)
Figure 4-4. U.S. Organizations by State (≥10 Responses)
Figure 4-5. Organizations by Industry Sectors ≥10 Responses)
Figure 4-6. Organization Role in a Typical Project
Figure 4-7. Future Plans of Non-Users
Figure 4-8. EVM Usage by Industry Sector
Figure 4-9. EVM Usage by Motivation
Figure 4-10. EVM Usage by World Regions
Figure 4-11. Motivation of EVM Usage by World Region
Figure 4-12. History of an Established Project-Control System
Figure 4-13. History of EVM in a Formal Project-Control System
Figure 4-14. Four Additional Criteria for EVM Maturity Measurement
Figure 4-15. Distribution of the Maturity Index
Figure 4-16. Boxplot of EVM Maturity by World Regions
Figure 4-17. Boxplot of EVM Maturity by Country
Figure 4-18. Boxplot of EVM Maturity by Industry
Figure 5-1. Different Approaches to EVM Practice Standards
Figure 5-2. Industry Sector/Motivation and Practice Standards
Figure 5-3. EVM Standard Usage by World Regions
Figure 5-4. EVM System Certification by Industry Sector
Figure 5-5. EVM System Certification by World Regions
Figure 5-6. EVM Software Usage Strategy
Figure 5-7. Software Usage by World Regions
Figure 5-8. Consulting Service Usage by World Regions
List of Tables
Table 1-2. Category of Survey Variables
Table 4-1. EVM User Group Classification
Table 4-2. Level of EVM Usage Definition
Table 4-3. EVM Applicability by User Classification
Table 4-4. EVM Implementation Strategy
Table 4-5. Future Plan Regarding EVM Implementation
Table 4-6. A Simplified EVM Maturity Model
Table 4-7. EVM Maturity by User Classification
Table 6-1. EVM Contribution to Project Outcomes
Table 6-2. EVM Contribution by World Regions
Table 6-3. Barriers for EVM Adoption
Table 6-4. Barriers for Improving EVM Level of Usage
Table 6-5. Critical Success Factors for EVM Implementation
Executive Summary
Earned value management is an integrated planning and control methodology that combines the measurement of cost, schedule, and technical performance. It enables early detection of performance issues and allows corrective actions to be implemented in a timely fashion. The objective of this study is to provide an understanding of the current practice of EVM usage, practice standards, and related professional services across different industry sectors and geographic regions. This is in response to the truly remarkable growth of EVM as a best practice for performance management in both government agencies and private industries. The study is intended to help project management practitioners, professional associations, and service providers involved in EVM to better comprehend and gauge the current level of EVM practice and its user base. To achieve this goal, this study relies on two complementary research methods, which are literature review and survey research. The literature review collected the basic facts about what EVM was, what it is today, and what has been done to establish a better understanding of its current practice. This is further augmented with a survey study that provided a cross-sectional view of the most current EVM practice, based on the experience and knowledge of more than 600 project management practitioners who participated in the study.
To provide practical and meaningful comparison of EVM practice, the vast number of EVM users were classified according to their industry sector, motivation for EVM usage, organization role, and geographic location. These classifications make the subsequent comparative analysis more meaningful and relevant to industry practitioners. The EVM practice of these user groups were compared using a rather broad view of EVM practice. This view included the business environment surrounding EVM application, its implementation and usage, and its contributions to project outcomes, as well as barriers that hinder its use. The user classification scheme and the broader review of EVM practice are expected to provide practitioners with a holistic view of the current status of EVM practice.
The literature review and the survey study resulted in a better understanding of the current EVM practice, practice standards, and service market. The findings can be summarized and grouped into the following eight principle points:
(1) EVM has received worldwide attention. Survey respondents and the organizations they represented showed a remarkable coverage of different countries and industries. A total of 61 countries, 36 U.S. states, and 17 different industry sectors were represented in the survey. Outside the U.S., this attention is particularly pronounced in the Middle East, South Asia, Canada, and Europe. In terms of industry sectors, this attention goes beyond the traditional defense/military and government community to include a number of private-industry sectors, ranging from IT, construction, energy, and power to manufacturing.
(2) The practice of EVM varies greatly with the highly diversified user profile. The differences of EVM practice may be attributed to numerous influencing factors. A large variation of EVM practice was observed in the survey. The level of EVM usage and maturity varies from one organization to another and from project to project.
(3) Industry sector and motivation for EVM usage are the most discerning factors to differentiate among EVM practices. This study considered four system-level grouping factors that are expected to group users with similar practice together, and maximize the difference between various user groups. The survey shows that in terms of EVM practice, the industry sector is by far the most important discerning factor.
(4) The decision regarding whether EVM is applicable to a particular project is affected by many factors, and budget size appears to be the most important decision factor.
(5) The ANSI/EIA 748 standard and the PMI EVM practice standard are the most widely used international industry standards. While the ANSI standard is primarily dominant in the defense/government sector, the PMI standard is highly associated with EVM usage in the private sector. Based on this wide distribution of their usage at a global level, it can be said that the ANSI/EIA 748 standard and the PMI EVM standard have emerged as the de facto international standards in their respective industry sectors.
(6) EVM's contributions and cost effectiveness are widely recognized by all users regardless of their industry sector, motivation, country, etc. EVM users in general agree
to strongly agree
with EVM's contributions in providing early warning, helping to achieve cost goals, improving communication, helping to achieve schedule goals, and improving scope management. EVM's contribution to cost performance is ranked higher than that of schedule performance, and the difference is statistically significant.
(7) Lack of motivation and lack of expertise are perceived by both EVM users and non-users as the top barriers for them to enhance their level of EVM usage. The problem of motivation is a more complex issue and appears to be a result of a combination of other factors. EVM appears to be applicable and cost effective in certain types of projects, but not all projects. To make EVM universally applicable in