Abstract. For project cost, analysts can predict the final value with some confidence using the I... more Abstract. For project cost, analysts can predict the final value with some confidence using the Independent Estimate at Completion (IEAC) formulas from Earned Value Management (EVM).1 The formulas provide a means to understand the financial health of a project without having to reassess the cost value for each of the unfinished tasks. Earned value analysts cannot assess the health of schedule performance in the same manner. EVM does not provide IEAC-like formulas by which to predict the final duration of a project. Many who are knowledgeable of earned value express the opinion that schedule information derived from EVM is of little value. This paper discusses the problem and develops a methodology for calculating the predicted project duration using EVM data. The methodology uses the concept of Earned Schedule and introduces an additional measure required for the calculation.
Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing... more Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing way, cost …schedule …and technical performance. It is a system, however, that causes difficulty to those just being introduced to its concepts. EVM measures schedule performance not in units of time, but rather in cost, i.e. dollars. After overcoming this mental obstacle, we later discover another quirk of EVM: at the completion of a project which is behind schedule, Schedule Variance (SV) is equal to zero, and the Schedule Performance Index (SPI) equals unity. We know the project completed late, yet the indicator values say the project has had …perfect schedule performance!! A senior executive receiving the project performance report, minimally knowledgeable of EVM, cannot understand why he has an angry customer screaming, “Your product delivery is late! ” This paper discusses the dilemma
Earned Schedule (ES) is a method of deriving schedule performance from Earned Value Management (E... more Earned Schedule (ES) is a method of deriving schedule performance from Earned Value Management (EVM) data [1]. The ES indicators are time-based, unlike the cost-based EVM schedule indicators, Schedule Variance (SV) and Schedule Performance Index (SPI) [2]. Having time-based measures and indicators to describe the schedule performance of a project is highly logical and offers considerable advantages over the EVM cost approach to schedule depiction. The most significant advantage ES has over its EVM counterparts is that its indicators, SV(t) and SPI(t), provide reliable information regardless of whether or not the project is late or early performing with respect to its planned performance. In contrast, the erratic behavior of the EVM schedule indicators is well known: SV = 0.0 and SPI = 1.0 at the conclusion of a late project, falsely indicating perfect performance. The ES characteristic of yielding reliable information throughout the project period of performance facilitates the abil...
Abstract. When should a manager take action to correct a project not performing well? What should... more Abstract. When should a manager take action to correct a project not performing well? What should he do if he decides to act? How does a manager know his action is sufficient? These are age-old questions. A poor outcome is a certainty if the manager’s decision and action are not appropriate. This paper discusses the questions, and the manager’s considerations. It concludes with the description of the decision logic diagram linking project performance with other factors to the possible management actions.
Development of a plan for executing a project is a difficult undertaking. When the plan is being ... more Development of a plan for executing a project is a difficult undertaking. When the plan is being created, a work flow is envisioned along with constraints and resource availability. There is a considerable amount of effort invested in decomposing the constituents of the plan into manageable components and work packages. Detailed examination of the tasks themselves is made to prepare reasonable estimates for their cost and duration. Oftentimes, planning teams use historical project records, heuristics and statistical algorithms to determine best and worst case probable outcomes. Furthermore, to assure that the best possible plan is created, technical experts may be employed to make the estimates as accurate as possible. Before assignments can be made to the team members of a project, the timing of their actions must be known along with their interdependencies. The intricate mechanism for consolidating all of this information and making it understandable to the project team, and senio...
Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing... more Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing way, cost …schedule …and technical performance. It is a system, however, that causes difficulty to those just being introduced to its concepts. EVM measures schedule performance not in units of time, but rather in cost, i.e. dollars. After overcoming this mental obstacle, we later discover another quirk of EVM: at the completion of a project which is behind schedule, Schedule Variance (SV) is equal to zero, and the Schedule Performance Index (SPI) equals unity. We know the project completed late, yet the indicator values say the project has had …perfect schedule performance!! A senior executive receiving the project performance report, minimally knowledgeable of EVM, cannot understand why he has an angry customer screaming, “Your product delivery is late!” This paper discusses the dilemma with the EVM schedule indicators, SV and SPI. A method for resolving the problem is presented in th...
Project duration forecasting has been enhanced with the introduction and application of the techn... more Project duration forecasting has been enhanced with the introduction and application of the techniques derived from Earned Schedule (ES). The computed forecast results from ES have been shown to be better than any other Earned Value Management based method using both real and simulated performance data. Even so, research has shown that as the topology of the network schedule becomes more parallel, the accuracy of the ES forecast worsens. Recently, forecast accuracy improvement has been achieved for highly parallel type schedules with the method of Earned Schedule-Longest Path. This paper proposes further advancement to the longest path approach through anomaly rejection and the application of statistical methods.
Project duration forecasting has been enhanced with the introduction and application of the techn... more Project duration forecasting has been enhanced with the introduction and application of the techniques derived from Earned Schedule (ES). The computed forecast results from ES have been shown to be better than any other EVM-based method using both real and simulated performance data. However, research has shown that as the topology of the network schedule becomes more parallel, the accuracy of the ES forecast worsens. This paper examines a possible approach for overcoming the dilemma to further improve the effectiveness of ES forecasting.
Earned Schedule is a fairly new method for analyzing schedule performance; it is a derived applic... more Earned Schedule is a fairly new method for analyzing schedule performance; it is a derived application of Earned Value Management (EVM) data. Created three years ago, the method has propagated to several countries and been used for various types of work spanning a large range of project sizes. During this period of infancy, a misperception may have emerged that ES is only applicable to the total project and thus is limited for schedule performance analysis. As has been shown in the article, “Connecting Earned Value to the Schedule,” ES can be used for much more. It facilitates the ability to identify constraints, impediments, and the possibility of rework at the task level [1]. This information is very useful for management purposes, but it does not provide performance indicators below the project level. This paper describes how ES can be applied to sub-levels of the project. Using this capability, the project manager can analyze schedule performance at virtually any level desired –...
An objective of Earned Value Management (EVM) is to provide a means for predicting the outcome of... more An objective of Earned Value Management (EVM) is to provide a means for predicting the outcome of a project. Inherently, the outcome is largely determined in the planning, and of course completion forecasting commonly occurs with analysis of project performance. Having the project plan, management would like to be able to quantify its risk - What is the likelihood for having a successful project with this plan? How much should be allocated to reserves to achieve a high probability of success? If reserves are constrained to maintain the bid price in the competitive range, what is the probability of having a successful outcome? During project execution management desires
to answer this question - Can we state with confidence when the project can be expected to complete and simultaneously describe its projected final cost? The application of statistical methods facilitates answering these questions. This paper describes the elements necessary for performing statistical analysis.
Understanding the statistical distribution of the periodic cost and schedule indexes from Earned ... more Understanding the statistical distribution of the periodic cost and schedule indexes from Earned Value Management (EVM) and Earned Schedule (ES) is critical to forecasting, planning, estimating, process modeling, and simulation. Within the last 20 years, two independent studies examined the normality of the periodic cost variance (CV). Thereafter a study, was performed examining the EVM and ES indexes as well as CV. This last study corroborated the finding of non-normality for CV and provided evidence that the logarithm of the EVM cost index and the ES schedule index periodic values are normally distributed. Using additional project data, the normality of the indexes is examined, once again.
T he software division at the Oklahoma City Air Logistics Center was assessed as Software Enginee... more T he software division at the Oklahoma City Air Logistics Center was assessed as Software Engineering Institute (SEI) Capability Maturity Model ® (CMM ®) Level 4 in 1996, and became registered under the ISO 9001 standard for Quality Systems in 1998. The ISO registration was under the software implementation of the ISO standard known as " TickIT. " For these accomplishments and several others, the software division was the recipient of the Institute of Electrical and Electronics Engineers' Software Process Achievement Award for 1999, a truly significant award for the divi-sion's efforts. A large portion of the division's success has been due to embracing the Earned Value Management (EVM) methodology. EVM provided the needed structure to achieve many of the CMM Level 2 and 3 Key Process Areas (KPA) of the SEI's CMM. And, due to its numerical basis, EVM facilitated the achievement of the CMM Level 4 KPA, Quantitative Process Management (QPM), at that time. How...
Earned value management (EVM) methods for forecasting project duration have been taught in traini... more Earned value management (EVM) methods for forecasting project duration have been taught in training courses and used by project managers for four decades. These EVM methods are generally considered to be accepted practice, yet they have not been well studied and researched as to their predictive capability. Using real project data, this article examines and compares the duration forecasts from four EVM methods to the earned schedule prediction technique.
Earned Schedule is an extension to Earned Value Management. The method provides considerable capa... more Earned Schedule is an extension to Earned Value Management. The method provides considerable capability to project managers for analysis of schedule performance. From the time of the public’s first view of Earned Schedule with the publication of “Schedule is Di!erent” in the March 2003 issue of The Measurable News, its propagation and uptake around the world has been extraordinary. This article will cover the capabilities of the method and challenges encountered, progressing through the significant extensions, to its present status.
Generally speaking, statistical methods is an area of mathematics most people avoid, including th... more Generally speaking, statistical methods is an area of mathematics most people avoid, including those that plan and manage projects. Looking past this mental roadblock, the use of statistics offers significant potential to enhance both planning and project control. Risk planning can be improved through using statistics coupled to historical data. Correspondingly, the potential for improved project control comes from more reliable outcome forecasting for both project cost and duration. This article develops these applications of statistics and provides examples of their use. The outcome desired for this discussion is that the “ fear” of statistics will be lessened and the reader will be inspired to try the methods in his or her own project environment. The statistical methods put forth are created and described from the perspective of schedule but are readily translatable and usable for cost.
From time to time in the Earned Value Management literature a claim is made that exceeding the To... more From time to time in the Earned Value Management literature a claim is made that exceeding the To Complete Performance Index (TCPI) value of 1.10 spells doom for the project. That is, when the threshold value of 1.10 is exceeded, the project is out of control and the project manager has little chance of successfully recovering to the desired project cost. An article from a few years ago examined the threshold theoretically, concluding that it appears to have validity. As well, the same article extended its assessment to the comparable Earned Schedule indicator, the To Complete Schedule Performance Index (TSPI). This paper examines the threshold value empirically for both TCPI and TSPI, using real data from 25 projects of differing type and varying sources.
The To Complete Performance Index (TCPI) from earned value management describes the performance e... more The To Complete Performance Index (TCPI) from earned value management describes the performance efficiency required to achieve a cost objective. This article discusses the common use of the index, examining and confirming the underlying basis. Beyond its usual application, the TCPI indicator has a significant role in transforming project perfor - mance to effect a project recovery. This virtually unknown aspect is discussed and illustrated. A discussion of the TSPI from earned schedule is included to describe the parallelism between cost and schedule analysis.
1) Christensen et al, 2002(-1,-2), 1995, 1993(-1,-2)). 2) Vanhoucke et al, 2007, 2006. 3) Crumrin... more 1) Christensen et al, 2002(-1,-2), 1995, 1993(-1,-2)). 2) Vanhoucke et al, 2007, 2006. 3) Crumrine et al, 2013. 4) Lipke, 2017, 2016, 2015, 2014, 2012, 2011, 2009-1, 2006. Recent research indicates cost and schedule forecasting from EVM data is improved when the performance factor, PF = 1, is used. This paper uses a small set of real data to examine the research finding, to either confirm or refute. As well, the application of PF = 1 is employed in statistical forecasting; results are tested and compared to the index method. Observations from the research and this study are made referencing historical studies. Further research is encouraged on these topics, but with some precaution when real data is used.
Abstract. For project cost, analysts can predict the final value with some confidence using the I... more Abstract. For project cost, analysts can predict the final value with some confidence using the Independent Estimate at Completion (IEAC) formulas from Earned Value Management (EVM).1 The formulas provide a means to understand the financial health of a project without having to reassess the cost value for each of the unfinished tasks. Earned value analysts cannot assess the health of schedule performance in the same manner. EVM does not provide IEAC-like formulas by which to predict the final duration of a project. Many who are knowledgeable of earned value express the opinion that schedule information derived from EVM is of little value. This paper discusses the problem and develops a methodology for calculating the predicted project duration using EVM data. The methodology uses the concept of Earned Schedule and introduces an additional measure required for the calculation.
Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing... more Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing way, cost …schedule …and technical performance. It is a system, however, that causes difficulty to those just being introduced to its concepts. EVM measures schedule performance not in units of time, but rather in cost, i.e. dollars. After overcoming this mental obstacle, we later discover another quirk of EVM: at the completion of a project which is behind schedule, Schedule Variance (SV) is equal to zero, and the Schedule Performance Index (SPI) equals unity. We know the project completed late, yet the indicator values say the project has had …perfect schedule performance!! A senior executive receiving the project performance report, minimally knowledgeable of EVM, cannot understand why he has an angry customer screaming, “Your product delivery is late! ” This paper discusses the dilemma
Earned Schedule (ES) is a method of deriving schedule performance from Earned Value Management (E... more Earned Schedule (ES) is a method of deriving schedule performance from Earned Value Management (EVM) data [1]. The ES indicators are time-based, unlike the cost-based EVM schedule indicators, Schedule Variance (SV) and Schedule Performance Index (SPI) [2]. Having time-based measures and indicators to describe the schedule performance of a project is highly logical and offers considerable advantages over the EVM cost approach to schedule depiction. The most significant advantage ES has over its EVM counterparts is that its indicators, SV(t) and SPI(t), provide reliable information regardless of whether or not the project is late or early performing with respect to its planned performance. In contrast, the erratic behavior of the EVM schedule indicators is well known: SV = 0.0 and SPI = 1.0 at the conclusion of a late project, falsely indicating perfect performance. The ES characteristic of yielding reliable information throughout the project period of performance facilitates the abil...
Abstract. When should a manager take action to correct a project not performing well? What should... more Abstract. When should a manager take action to correct a project not performing well? What should he do if he decides to act? How does a manager know his action is sufficient? These are age-old questions. A poor outcome is a certainty if the manager’s decision and action are not appropriate. This paper discusses the questions, and the manager’s considerations. It concludes with the description of the decision logic diagram linking project performance with other factors to the possible management actions.
Development of a plan for executing a project is a difficult undertaking. When the plan is being ... more Development of a plan for executing a project is a difficult undertaking. When the plan is being created, a work flow is envisioned along with constraints and resource availability. There is a considerable amount of effort invested in decomposing the constituents of the plan into manageable components and work packages. Detailed examination of the tasks themselves is made to prepare reasonable estimates for their cost and duration. Oftentimes, planning teams use historical project records, heuristics and statistical algorithms to determine best and worst case probable outcomes. Furthermore, to assure that the best possible plan is created, technical experts may be employed to make the estimates as accurate as possible. Before assignments can be made to the team members of a project, the timing of their actions must be known along with their interdependencies. The intricate mechanism for consolidating all of this information and making it understandable to the project team, and senio...
Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing... more Earned Value Management (EVM) is a wonderful management system, integrating, in a very intriguing way, cost …schedule …and technical performance. It is a system, however, that causes difficulty to those just being introduced to its concepts. EVM measures schedule performance not in units of time, but rather in cost, i.e. dollars. After overcoming this mental obstacle, we later discover another quirk of EVM: at the completion of a project which is behind schedule, Schedule Variance (SV) is equal to zero, and the Schedule Performance Index (SPI) equals unity. We know the project completed late, yet the indicator values say the project has had …perfect schedule performance!! A senior executive receiving the project performance report, minimally knowledgeable of EVM, cannot understand why he has an angry customer screaming, “Your product delivery is late!” This paper discusses the dilemma with the EVM schedule indicators, SV and SPI. A method for resolving the problem is presented in th...
Project duration forecasting has been enhanced with the introduction and application of the techn... more Project duration forecasting has been enhanced with the introduction and application of the techniques derived from Earned Schedule (ES). The computed forecast results from ES have been shown to be better than any other Earned Value Management based method using both real and simulated performance data. Even so, research has shown that as the topology of the network schedule becomes more parallel, the accuracy of the ES forecast worsens. Recently, forecast accuracy improvement has been achieved for highly parallel type schedules with the method of Earned Schedule-Longest Path. This paper proposes further advancement to the longest path approach through anomaly rejection and the application of statistical methods.
Project duration forecasting has been enhanced with the introduction and application of the techn... more Project duration forecasting has been enhanced with the introduction and application of the techniques derived from Earned Schedule (ES). The computed forecast results from ES have been shown to be better than any other EVM-based method using both real and simulated performance data. However, research has shown that as the topology of the network schedule becomes more parallel, the accuracy of the ES forecast worsens. This paper examines a possible approach for overcoming the dilemma to further improve the effectiveness of ES forecasting.
Earned Schedule is a fairly new method for analyzing schedule performance; it is a derived applic... more Earned Schedule is a fairly new method for analyzing schedule performance; it is a derived application of Earned Value Management (EVM) data. Created three years ago, the method has propagated to several countries and been used for various types of work spanning a large range of project sizes. During this period of infancy, a misperception may have emerged that ES is only applicable to the total project and thus is limited for schedule performance analysis. As has been shown in the article, “Connecting Earned Value to the Schedule,” ES can be used for much more. It facilitates the ability to identify constraints, impediments, and the possibility of rework at the task level [1]. This information is very useful for management purposes, but it does not provide performance indicators below the project level. This paper describes how ES can be applied to sub-levels of the project. Using this capability, the project manager can analyze schedule performance at virtually any level desired –...
An objective of Earned Value Management (EVM) is to provide a means for predicting the outcome of... more An objective of Earned Value Management (EVM) is to provide a means for predicting the outcome of a project. Inherently, the outcome is largely determined in the planning, and of course completion forecasting commonly occurs with analysis of project performance. Having the project plan, management would like to be able to quantify its risk - What is the likelihood for having a successful project with this plan? How much should be allocated to reserves to achieve a high probability of success? If reserves are constrained to maintain the bid price in the competitive range, what is the probability of having a successful outcome? During project execution management desires
to answer this question - Can we state with confidence when the project can be expected to complete and simultaneously describe its projected final cost? The application of statistical methods facilitates answering these questions. This paper describes the elements necessary for performing statistical analysis.
Understanding the statistical distribution of the periodic cost and schedule indexes from Earned ... more Understanding the statistical distribution of the periodic cost and schedule indexes from Earned Value Management (EVM) and Earned Schedule (ES) is critical to forecasting, planning, estimating, process modeling, and simulation. Within the last 20 years, two independent studies examined the normality of the periodic cost variance (CV). Thereafter a study, was performed examining the EVM and ES indexes as well as CV. This last study corroborated the finding of non-normality for CV and provided evidence that the logarithm of the EVM cost index and the ES schedule index periodic values are normally distributed. Using additional project data, the normality of the indexes is examined, once again.
T he software division at the Oklahoma City Air Logistics Center was assessed as Software Enginee... more T he software division at the Oklahoma City Air Logistics Center was assessed as Software Engineering Institute (SEI) Capability Maturity Model ® (CMM ®) Level 4 in 1996, and became registered under the ISO 9001 standard for Quality Systems in 1998. The ISO registration was under the software implementation of the ISO standard known as " TickIT. " For these accomplishments and several others, the software division was the recipient of the Institute of Electrical and Electronics Engineers' Software Process Achievement Award for 1999, a truly significant award for the divi-sion's efforts. A large portion of the division's success has been due to embracing the Earned Value Management (EVM) methodology. EVM provided the needed structure to achieve many of the CMM Level 2 and 3 Key Process Areas (KPA) of the SEI's CMM. And, due to its numerical basis, EVM facilitated the achievement of the CMM Level 4 KPA, Quantitative Process Management (QPM), at that time. How...
Earned value management (EVM) methods for forecasting project duration have been taught in traini... more Earned value management (EVM) methods for forecasting project duration have been taught in training courses and used by project managers for four decades. These EVM methods are generally considered to be accepted practice, yet they have not been well studied and researched as to their predictive capability. Using real project data, this article examines and compares the duration forecasts from four EVM methods to the earned schedule prediction technique.
Earned Schedule is an extension to Earned Value Management. The method provides considerable capa... more Earned Schedule is an extension to Earned Value Management. The method provides considerable capability to project managers for analysis of schedule performance. From the time of the public’s first view of Earned Schedule with the publication of “Schedule is Di!erent” in the March 2003 issue of The Measurable News, its propagation and uptake around the world has been extraordinary. This article will cover the capabilities of the method and challenges encountered, progressing through the significant extensions, to its present status.
Generally speaking, statistical methods is an area of mathematics most people avoid, including th... more Generally speaking, statistical methods is an area of mathematics most people avoid, including those that plan and manage projects. Looking past this mental roadblock, the use of statistics offers significant potential to enhance both planning and project control. Risk planning can be improved through using statistics coupled to historical data. Correspondingly, the potential for improved project control comes from more reliable outcome forecasting for both project cost and duration. This article develops these applications of statistics and provides examples of their use. The outcome desired for this discussion is that the “ fear” of statistics will be lessened and the reader will be inspired to try the methods in his or her own project environment. The statistical methods put forth are created and described from the perspective of schedule but are readily translatable and usable for cost.
From time to time in the Earned Value Management literature a claim is made that exceeding the To... more From time to time in the Earned Value Management literature a claim is made that exceeding the To Complete Performance Index (TCPI) value of 1.10 spells doom for the project. That is, when the threshold value of 1.10 is exceeded, the project is out of control and the project manager has little chance of successfully recovering to the desired project cost. An article from a few years ago examined the threshold theoretically, concluding that it appears to have validity. As well, the same article extended its assessment to the comparable Earned Schedule indicator, the To Complete Schedule Performance Index (TSPI). This paper examines the threshold value empirically for both TCPI and TSPI, using real data from 25 projects of differing type and varying sources.
The To Complete Performance Index (TCPI) from earned value management describes the performance e... more The To Complete Performance Index (TCPI) from earned value management describes the performance efficiency required to achieve a cost objective. This article discusses the common use of the index, examining and confirming the underlying basis. Beyond its usual application, the TCPI indicator has a significant role in transforming project perfor - mance to effect a project recovery. This virtually unknown aspect is discussed and illustrated. A discussion of the TSPI from earned schedule is included to describe the parallelism between cost and schedule analysis.
1) Christensen et al, 2002(-1,-2), 1995, 1993(-1,-2)). 2) Vanhoucke et al, 2007, 2006. 3) Crumrin... more 1) Christensen et al, 2002(-1,-2), 1995, 1993(-1,-2)). 2) Vanhoucke et al, 2007, 2006. 3) Crumrine et al, 2013. 4) Lipke, 2017, 2016, 2015, 2014, 2012, 2011, 2009-1, 2006. Recent research indicates cost and schedule forecasting from EVM data is improved when the performance factor, PF = 1, is used. This paper uses a small set of real data to examine the research finding, to either confirm or refute. As well, the application of PF = 1 is employed in statistical forecasting; results are tested and compared to the index method. Observations from the research and this study are made referencing historical studies. Further research is encouraged on these topics, but with some precaution when real data is used.
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Papers by Walt Lipke
to answer this question - Can we state with confidence when the project can be expected to complete and simultaneously describe its projected final cost? The application of statistical methods facilitates answering these questions. This paper describes the elements necessary for performing statistical analysis.
to answer this question - Can we state with confidence when the project can be expected to complete and simultaneously describe its projected final cost? The application of statistical methods facilitates answering these questions. This paper describes the elements necessary for performing statistical analysis.