How to Lie with Earned Value

 
 
By eweek  |  Posted 2005-10-23 Email Print this article Print
 
 
 
 
 
 
 

Opinion: Earned-value analysis is one of the most-used measures of how well a tech project is progressing. Unfortunately, it's one of the most flawed, as well. (CIOInsight.com)

Heres a mystery for you. Every week in a certain company, every project manager turns in a chart for each of his or her projects. The first thing management looks at when they see the chart is the small color-coded box in the corner that illustrates the overall project status. Each project is rated green, yellow, or red, depending upon the health of the project. Nobody wants a yellow or red project. We used to say that yellow earned you a trip to the doghouse, and red earned you a trip to the woodshed.
Our director liked that joke so much that he included a slide with a red woodshed in his weekly PowerPoint.
The color of the box is the result of an earned value analysis calculation based upon the rate of cost and schedule performance compared to the baseline project plan. Late or incomplete tasks and/or higher costs will push your project into yellow or red territory. Once youre there, completing other tasks more quickly and under budget will help return the project to a green status. (Heres a sample earned value calculator.)
And now the mystery. In this company, a certain software development and integration project was coded green the first week, and green every week after that for the entire life of the project, a period of four months. Yet, the project was a complete failure. It was late, it blew the budget, and nothing useable was ever delivered to the customer. How did this happen? How did this disaster stay green for so long? Artful manipulation of the system. Earned Value Cheat Sheet The project manager knew how to beat the system. Heres the playbook.
  • Pad the Schedule. Its the oldest trick in the book. If a project looks like it will take three months, tell management it will take four. If things go wrong, the manager can still beat expectations or at least hide the problems for a while, keeping up appearances.
  • Push Problem Tasks Forward. Putting the easiest tasks at the beginning of the project and the hardest tasks at the end can keep a project green for a long time.
  • Bump the Task Completion Percentages. Whats the difference between a task thats 20 percent complete and one thats 80 percent complete? A project thats red and a project thats green. The longer the task, the larger the "benefit," but changing the completion percentage of any subjective task will help the earned value numbers.
  • Re-Baseline the Project. The project manager waits until a scope change or other change request, and uses that as an excuse to redo the project schedule. The project instantly turns green because actual progress now matches expected progress.
  • Late Integration. Most problems with IT projects emerge during integration and testing. By putting these tasks at the end and then marking them as partially complete, technical problems were hidden for the entire life of the project. The earned value scorecard that management put in place was designed to be a reliable indicator of project health. Unfortunately, it was no match for a determined project manager who had the ability to structure work and measure task completion and was willing to take whatever steps were necessary to keep it green. Read the full story on CIOInsight.com: How to Lie with Earned Value Check out eWEEK.coms for the latest news, reviews and analysis on IT management from CIOInsight.com.
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