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Earned Value: Preparing for Implementation

It would be highly unusual for a new management system to integrate seamlessly with existing systems and to perform successfully from the outset without considerable advance planning. The project manager should approach any new earned value management system (EVMS) implementation with careful first steps.

Organizational Support

A project team cannot implement an EVMS; the entire organization must be involved. As you undoubtedly are aware, the first principle of any new system implementation is to have unequivocal top management commitment. In the authors' experience, every organization has been through several of the latest and greatest management tools; some were successfully implemented, but many were not. Without strong management commitment, team members may view EVMS as another improvement process that safely can be ignored and eventually will fade away. Senior management's commitment must be written and well publicized and the project manager must have the support of several departments as well as methods to encourage positive reactions and behavior.

Resource Managers

In a functionally designed organization, where project teams include members from various functional areas, project work performance generally is considered only incidentally and informally (if at all) in evaluations by functional heads, often referred to as resource managers. Selection of individuals for project assignments also falls under the resource manager's purview. When functional duties collide with project requirements, the project team member is placed in a difficult dilemma. Part of the implementation process may include the formal incorporation of performance evaluations by the project manager.

Functional heads, especially if they do not have a clear understanding of project priorities, may not be in the best position to assign resources to individual project work packages. Functional heads either must be far more involved in project work or must share responsibility for work assignments with someone familiar with the organization's project portfolio. The project manager should nurture relationships with department managers and promote the establishment of a Project Management Office.

Because accounting personnel will have the responsibility of gathering, aggregating, and reporting EVMS data, their role requires the project manager's special attention.

The All-Important Accounting and Finance Team

Possibly the most important team that the project manager must deal with is the accounting and finance team. In many organizations, the accounting and finance roles are intertwined and overlapping. In others, accounting reports to the chief financial officer. On the other hand, accounting and finance may be independent functional areas. In any event, accounting personnel will be charged with accumulating project data and preparing reports. It is extremely important for project managers to understand the accounting position, the positions to which they report, and then work with them to affect the speedy capture and reporting of all relevant data.

We are not suggesting that project managers learn accounting. It is the authors? opinion that it is vital to cooperate with the accountants and appreciate the work they do. EVMS evolved from a standard cost system and accountants are able to readily master the intricacies of both systems, as well as understand the systems? deficiencies. In addition, they are willing and able to answer questions and help project managers master the requirements for their inputs. The vast majority of accountants do not relish their perceived role of "Enforcer."

Everyone wants up-to-date information. As a project manager, you have the ability to either help or hinder the work performed by accountants. EVMS reports provide valuable information. Therefore, we urge you to make friends in the accounting department and forgo attempts to "game" the system. Accountants can explain the importance of acknowledging project commitments prior to receipt of transaction documentation and the necessity to keep up-to-date records.

Education and Training

In order to effectively apply the concepts of EVMS and to generate and report all the information that a compliant system should produce, training is highly recommended. Education and training of everyone charged with providing input for EV metrics should be included as part of the comprehensive implementation plan. Besides those intimately connected with responsibilities impacting EVMS reports, entire project teams should be informed as to why the new system is being adopted and how the teams will be impacted. In addition, their individual contributions to its successful implementation must be explicitly addressed.

On-the-job training, self-learning, and internal training are opportunities for acquiring EVMS knowledge that have an advantage in convenience and cost, but they may not provide the necessary level of rigor and acceptance outside the organization. There are several accepted formal training opportunities. One example is Management Concepts in Vienna, VA (www.managementconcepts.com), which offers General Services Administration training and consulting. There are many other companies and several universities that offer formal EVMS training, including U.S. government departments and agencies. EVMS software companies, such as C/S Solutions, Inc. (located in Los Angeles, CA; Tacoma, WA; and Destin, FL), offer training in conjunction with their software. Also, the majority of government contractors with approved EVMS systems offer in-house training that in some cases may be attended by outsiders.

Most of the federal government?s training courses are specific to their staff needs such as an Internet-based course designed to provide knowledge and comprehension of applying EVMS to evaluate contractor cost and schedule performance. Most of the government classes are restricted to their personnel or staff of active government contractors; however, if you qualify, the training opportunities are excellent. The Defense Acquisition University (http://www.dau.mil/) maintains an Earned Value Management Department and provides a list of member organizations as well as other recognized educational institutions. The Air Force Institute of Technology (http://www.afit.edu/) has a course that is required for all their personnel that will be involved in reviewing EVMS systems.

Eliciting Desired Behavior

"Any change, even a change for the better, is always accompanied by drawbacks and discomforts." -Arnold Bennett

Most of us underestimate the level of overt and covert resistance to change. It may be necessary to spend what might seem to be an extraordinary effort on the change management process. Introducing change is a complex subject involving many disciplines, including psychology, and is beyond the scope of this book. There are voluminous sources (books, articles, and white papers) on the subject of change. While many of the issues that must be addressed are common across all organizations, successful change generally requires an atmosphere of trust, respect, openness, and learning. Support for learning can be enhanced by sharing problem-solving techniques and lessons-learned documentation across the organization through a formal information sharing process. The closing process for a project supports this type of learning.

When new processes or procedures are put in place to support a change initiative, new performance metrics designed to support the change also must be in place. EVMS metrics are designed to evaluate a project, not the people working on the project. The organization must expend the effort developing a personnel evaluation system that encourages the desired behavior and minimizes or eliminates dysfunctional actions. We know of no simple solutions to this issue; however, it is acknowledged that the organizations that recognize the problem and apply their best efforts to find a solution will find themselves in a better long-term competitive position. It is important for the project manager to recognize who controls and administers staff evaluations. In many organization this duty falls to functional or resource managers.

About the Authors :

Charles I. Budd (Chuck) is a Principal of U/S Management Systems in Waco, Texas, and a Project Management Professional (PMP). He is currently developing project management automation tools and consulting on information systems projects.

Charlene Spoede Budd, PhD (Charli), is Professor Emeritus of Accounting at Baylor University, where she has taught graduate management accounting and graduate project management classes. She has a PhD in business administration and holds certifications as a CPA, CMA, CFM, PMP, and all six professional categories of the theory of constraints. 


Charles I. Budd, PMP, Charlene Spoede Budd, PhD, CPA, CMA, CFM, PMP

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