The Origins and History of Earned Value Management

FEATURED PAPER

By Pat Weaver

Melbourne, Australia

Introduction

The concept of controlling the work of projects has a long history of continuous development and innovation. Surprisingly sophisticated project control systems existed long before the concept of modern project management emerged in the first half of the 20^th century.

In the past, tools being used defined the practice and the profession of traditional, and then modern, project management as we currently understand it, and this trend is continuing. The major phases of development of project controls being:

From early times through to the 1950s
From 1950s through to the present
Future interactive and intelligent systems.

Prior to the 1950s, the primary control tools showed static representations of deterministic data. The sophistication of both the management data, and its representation in reports improved over the centuries, but the controls processes focused on reactive management actions to correct observed deviations from the plan.

The current phase of development of project controls uses largely deterministic information to predict future outcomes. This phase of development started in the late 1950s with PERT and CPM schedules, and has progressed through to the point where there is general acceptance that Earned Value and Earned Schedule are among the best of the predictive control tools. Management is now expected to be proactive, working to minimize the negative effect of future problems identified using the predictive tools as well as dealing with current negative variances^[1]. Earned Value Management (EVM), incorporating Earned Schedule (ES), is likely to be the pinnacle of development in this type of deterministic project control tool.

The next generation of project controls are predicted to be integrated, adaptive, and intelligent^[2], with a focus on maximizing the efficient use of the project’s resources. These tools will use machine learning, and be integrated into the systems used to design and develop the project’s outputs^[3] rather than operating as separate processes.

The purpose of this paper is to trace the history of the development of EVM and ES from the 1960s through to the present, in the hope that understanding the roots of the techniques will assist in transitioning EVM’s core concepts across to the next generation of control tools, and encouraging their use in the current environment. The legal and management framework around modern project management is unlikely to change in next decade as fast as the technology, consequently organizations will benefit from the wide spread adoption of current best practices, which should include the use of EVM and ES.

Defining Earned Value and Earned Schedule

For the purposes of this paper, I have adopted a fairly broad definition of Earned Value^[4]:

Earned Value (EV) – a performance measurement based on the value of work completed in a period, or cumulative to date, expressed in terms of the budget assigned to that work.
Earned Value Management (EVM) – a management approach that integrates project^[5] scope (technical performance), budget (cost performance), and schedule (time performance) for the assessment of a project’s progress, and its predicted performance, by applying earned value techniques.
Earned Schedule (ES) – an extension of earned value management which calculates schedule metrics and indicators on the time axis, rather than on the cost axis used by traditional earned value metrics.
Earned Value Management System (EVMS) – The policies, processes, procedures, and tools (software) used by an organization to support its EVM practices.

More…

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How to cite this paper: Weaver, P. (2022). The Origins and History of Earned Value Management; PM World Journal, Vol. XI, Issue VIII, August. Available online at https://pmworldlibrary.net/wp-content/uploads/2022/08/pmwj120-Aug2022-Weaver-origins-and-history-of-earned-value-management.pdf

About the Author

Patrick Weaver

Melbourne, Australia

Patrick Weaver, PMP, PMI-SP, FAICD, FCIOB, is the Managing Director of Mosaic Project Services Pty Ltd, an Australian project management consultancy specialising in project control systems. He is a Fellow of the Chartered Institute of Building, Australasia (FCIOB) and a Fellow of the Australian Institute of Company Directors (FAICD). He is a member of the the PMI Melbourne Chapter (Australia), as well a full member of AIPM, and the Project Management College of Scheduling (PMCOS).

Patrick has over 50 years’ experience in Project Management. His career was initially focused on the planning and managing of construction, engineering and infrastructure projects in the UK and Australia. The last 35 years has seen his businesses and experience expand to include the successful delivery of project scheduling services and PMOs in a range of government, ICT and business environments; with a strong focus on project management training.

His consultancy work encompasses: developing and advising on project schedules, developing and presenting PM training courses, managing the development of internal project control systems for client organisations, and assisting with dispute resolution and claims management.

In the last few years, Patrick has sought to ‘give back’ to the industry he has participated in since leaving college through contributions to the development of the project management profession. In addition to his committee roles he has presented papers at a wide range of project management conferences in the USA, Europe, Asia and Australia, has an on-going role with the PGCS conference in Australia and is part of the Australian delegation to ISO TC258.

Patrick can be contacted at patw@mosaicprojects.com.au or at www.mosaicprojects.com.au.

To view other works by Pat Weaver that have been published in the PMWJ, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/patrick-weaver/

[1] For more on the evolution of project management and project controls see:
https://mosaicprojects.com.au/PMKI-ZSY-005.php#Overview

[2] One example is the trends towards 5D BIM in the construction industries discussed in Projects controls using integrated data – the opportunities and challenges! https://mosaicprojects.com.au/PDF_Papers/P200_Projects_controls_using_integrated_data.pdf

[3] For more on the future of project controls see: https://mosaicprojects.com.au/PMKI-SCH-005.php#Process2

[4] For more on what EVM is, and is not, see Earned Value Management Six things’ people don’t get!: https://mosaicprojects.com.au/Mag_Articles/AA011_EVM_Things_people_dont_get.pdf

[5] For convenience, where the term ‘project’ is used in the remainder of this paper, it should be read as ‘project or program’. EVM is equally applicable to both projects and programs.