as a Key Project Performance Measurement Tool
ADVISORY ARTICLE
By William R. Owen
Richland, Washington, USA
ABSTRACT
Inherent in any project environment that generates regular cost and schedule status updates, is a system that can measure project performance relative to the passage of time. As in the Earned Value Management System (EVMS) environment, variances and indices can be calculated and analyzed to determine project performance and data can be used to forecast cost and schedule end states; but in this second environment, performance measurement is not dependent on a construct such as a baseline. It is dependent upon remaining duration relative to the passage of time, which is absolute.
Key Words: baseline, forecast, cost, schedule, performance, measurement, index
INTRODUCTION
The current industry standard project controls environment employing best practices is centered around a system in which an original plan, the baseline, is compared to its current forecast, generated via incorporation of progress to-date. Cost and schedule variances between this current update and the baseline are noted and if pre-defined thresholds are exceeded, analysis follows. Other indices are calculated using standard algorithms, from which projections are made and estimates at completion (EACs) are generated. This process is well-defined and is fully described in the ANSI EVMS Standard, ANSI/EIA-748. The complete description of that system, its indices, parameters, data interpretations, corrective actions and controls can be found in that standard and are beyond the scope of this paper. That system and the EVMS standard are referenced only to establish that in the current industry standard environment, project performance measurement is accomplished by comparing a current forecast with a baseline and its utility is therefore greatly dependent on the quality of the baseline established for the project and the forecast update.
There may be occasions in the project lifecycle when additional performance perspective is desired; for example, if the baseline and forecast scope and/or schedule have diverged and no rebaselining effort is underway, or some performance perspective is desired in a project environment where EVMS has not been implemented. In the effort to provide new or additional project performance perspective, it is recognized that in the current industry standard EVMS environment and the default budget vs actuals methodology environment, the focus is on comparisons of inception-to-date datasets; cost and schedule data from the project start to the current status date. A new perspective would be to collect and analyze data that would allow a focus on the period from current status to the end of the project.
DESCRIPTION OF METHOD
The purpose of this paper is to describe a simple system which could be used to measure project performance, which focuses on the current-to-project-end period and does not depend on the baseline construct, but measures performance relative to the passage of time, which is absolute. The quality of a baseline, or the lack thereof, is not a factor. As in the EVMS environment, the utility of the resulting data does depend upon the quality of the current forecast.
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How to cite this article: Owen, W. R. (2023). Using Remaining Duration as a Key Project Performance Measurement Tool, PM World Journal, Vol. XII, Issue V, May. Available online at https://pmworldlibrary.net/wp-content/uploads/2023/05/pmwj129-May2023-Owen-using-remaining-duration-as-key-performance-measurement-tool.pdf
About the Author
William R. Owen
Richland, Washington, USA
William (Bill) Owen has more than 30 years of experience in program/project management controls and systems, and in data processing/programming/system administration in support of large projects and programs. His special fields to expertise include Program/Project Management/Administration, Project Controls and Risk Analysis. Industries he has supported include nuclear waste management, construction, information management, insurance and finance. In addition, he has 8 years of classroom instructional experience. He holds a M.A.T. in Mathematics (1975) and a B.S. in Mathematics (1970) from Morningside College; Sioux City, Iowa, USA.
Mr. Owen has provided senior-level program administration support for large U.S. Department of Energy (DOE) programs with billion+ dollar budgets. Mr. Owen has also been previously engaged as a consultant on behalf of Primavera Systems, Inc., conducting project management software implementation and training. In Mr. Owen’s most recent assignment he is providing project controls/risk analysis support at the Hanford Nuclear Reservation in Richland, Washington.
Bill can be contacted at owenmaple@msn.com
