ABSTRACT
Earned Value Management (EVM) is a project performance measurement technique, sometimes referred to as being primarily oriented towards cost management but with limited applicability to managing time performance. There have been various arguments supporting this perspective, namely: it ignores the detailed aspects of the schedule like floats and the critical path, its indicators are based on currency value hence not intuitive for time management, and finally the time performance indicator Schedule Performance Index (SPI, given by EV over PV) always gives the value of 1 (that is, a project ‘on time’) in late or early finishes. The last argument in particular is typically used to declare SPI as an invalid or unreliable time performance indicator. However, all of these arguments are only apparent. As we will demonstrate in this chapter EVM can provide useful and valid time performance measures. The problem with the SPI indicator floating towards the value of 1 has been the subject of alternative approaches, for example its calculation based on the concept of Earned Schedule. While this alternative approach resolves the problem of SPI floating towards one in late or early finishes, the secondary effect is that it also gives this indicator a different meaning to the original concept. Based on academic research using computer simulation models, and on practical applications in real-life projects, the author has developed an extended version of the original SPI (based on volume of work), which ensures the validity of this indicator throughout the whole execution period for the project. The solution found to overcome the weakness of the original SPI indicator preserves the original meaning of the time performance concept, that is, how fast against the plan is the volume of work being accomplished. This extended modified version of SPI has been used in several projects across various industries, in different countries, and it has successfully delivered useful and valid performance information. The extended model developed includes additional formulae for various ‘to complete on time’ indicators (To Complete Schedule Performance Indicator – TSPI) and ‘at completion’ forecasts. This chapter briefly explains the modified version of SPI and it also discusses the overall validity of using EVM to effectively support project time management. Some practical examples are also presented to illustrate the concepts. The use of SPI-based time performance indicators for the purpose of risk management under conditions of uncertainty is also discussed.
