The venerable Earned Value Management (EVM) framework, which has been around for fifty years, suffers criticism from people who, how surprising, do not understand EVM. While it is true that Earned Value is a misnomer, it is about scope, and should be called Earned Scope, there is significant “value” in this framework, as it is still the best approach to manage delivery performance.
Last year I spoke at two conferences from the College of Performance Management, the body that governs the application of EVM, and both had over 500 participants. In addition, the use of EVM is mandatory for companies that want to bid on contracts for sectors like defense, aero-space, nuclear and other that have huge budgets, many times in the billions of dollars, that magnify variances, generating the need for a framework like EVM. The adoption of EVM in the Information Technology area has been slow. Despite the fact that tools like MS Project and Jira claim to have EVM functionality, this is arguable and possibly subject of another post.
So what do we do with Value, the one that is benefits minus investment? There is a significant body of knowledge about this topic, as well as tools. But the question is, how we extend Earned Value Management to incorporate value/benefits management. There are two major developments in this area, which involve two members of P3M Solutions.
In 2017, Crispin Piney, associate consultant at P3M Solutions, published the book Earned Benefit Program Management, in which he defines the concept of Earned Benefit. Crispin was invited as keynote speaker at the CPM Conference in Fort Lauderdale in June 2018. Since then, Crispin has published many articles, both published by CPM and by PMI.
In 2018, I developed a benefit performance indicator called RPI, Realization Performance Indicator that complements SPI and CPI, the two core indicators of EVM for schedule and cost performance. A presentation, based on the article about this new indicator, RPI – The Third Musketeer in the EVM Framework published by Project Times, has been presented at the CPM conference in Washington DC in November 2018. It has also been presented as a webinar with PMI in Latin America and will be presented soon through PMI.org.
The final thought on this post is that, companies that use EVM to manage delivery performance can easily extend this framework to the area of benefits management. For those companies that do not use EVM, they can still use RPI and many elements of Earned Benefit Program Management. In both cases, there is always value in managing value.