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Earned Schedule Management

Introduction

For projects which has to focus primarily on the schedule only, Earned Value Management becomes an over kill. More than that, at the completion of the project, schedule variance will be shown as zero even for a late project because towards the end of the project both planned value (PV) and earned value (EV) will be same for a completed project.

Earned Schedule (ES) is a breakthrough analytical technique that resolves the EVM dilemma.  It is derived from and is an extension to EVM.  No additional data is needed for acquiring the ES measures; only the data from EVM is needed.  In contrast to the cost-based indicators from EVM, the ES schedule performance indicators are time-based, making them easier to comprehend.  The ES indicators provide a status and predictive ability for schedule, analogous to the facility for cost using EVM.

Formulas of Earned Schedule Management

Earned Schedule (ES) – The time point at which the project’s earned value was supposed to be the planned value.

Actual Time (AT) – Time units till the review date

SV (t) = Schedule Variance = Earned Schedule – Actual time

Schedule Performance Index SPI (t) = ES / AT (time units)

Estimated Duration (ED) = Planned Duration (PD) / SPI(t)

Estimated Completion Date (ECD) = Start_date + ED

Example

Consider a project whose duration from the start date till the end date is 200 days.

Let us assume that we are doing the review of the project on the 100th day.

As per the assumption during planning, the team is supposed to complete 2 units per day. So, at the end of 100 days, the team is supposed to complete 100×2 = 200 units

Planned Value = (PV) = 200

Actually, the team completed only 180 units

Earned Value = (EV) = 180

If things have gone as planned ( at the rate of 2 units per day), the team would have accomplished 180 units in 90 days’ time.

Earned Schedule (ES) = 90

Actual time units till review date (AT) = 100

Schedule Variance (t) = SV(t) = 90-100 = -10

Schedule Performance Index (t) = SPI(t) = ES/AT = 90/100 = 0.9

Estimated duration of the project (ED) = Planned Duration (PD) / SPI(t) = 200 / 0.9 = 222 days

Estimated Completion Date of the project = Start Date + ED = Start date + 222 days

Conclusion

For projects for which monitoring cost is not as important when compared to monitoring and forecasting schedule, Earned Schedule Management (ESM) is the most appropriate method and it does not ask for any additional data apart from Planned Value and Earned Value.  

Integrated Project Monitoring & Control for EPC

Successful projects deliver the scope of work with quality, within the agreed upon time and cost. This universal definition of project success holds good across all popular project management frameworks and project management communities. Even though the definition of success is very clear, still many projects fail. Most of the time the reasons for failures are common across projects.

It does not take lot of effort to identify the appropriate project management best practices among the globally accepted project management frameworks like PMBOK, PRINCE2, TCM, Agile, Lean and Others, which can solve the causes leading to project failures. Here is the list of root causes leading to project failures and the corresponding best practices in italics.

  1. Change in Organization’s priorities (Portfolio management)
  2. Change in project objectives (Portfolio management, Stakeholder management))
  3. Inaccurate requirements gathering (Requirements collection and scope definition practices, Stakeholder management))
  4. Inadequate vision or goal for the project (Portfolio management, Project Chartering, Stakeholder management)
  5. Inadequate or poor communication (Communication planning, Stakeholder management))
  6. Lack of project progress information(Communication planning, Stakeholder management)
  7. Opportunities and risks were not defined (Risk management)
  8. Inaccurate cost estimates (Cost estimation and budgeting)
  9. Poor change management (Change management processes)
  10. Inadequate sponsor support (Project chartering, Stakeholder expectation management)
  11. Resource dependency (Resource planning)
  12. Inaccurate task time estimate (Activity Duration estimation)
  13. Inexperienced project manager (Project manager competencies and professional responsibilities)
  14. Limited / taxed resources (Resource planning, Resource leveling, Forecasting)
  15. Inadequate resource forecasting (Resource planning, Forecasting)
  16. Team member procrastination (Monitoring & Control)
  17. Task dependency (Scheduling, Monitoring & Controlling)

“The problems are known and the solutions exist. Then why do we allow projects to fail due to the same good old reasons?

A closer analysis of the root causes reveal that they are inter-connected in nature. Hence calls for an integrated project management best practices approach to solve the problems. For example;

  • Scope related best practices cannot be implemented unless and until Stakeholder management is in place.
  • Unless and until the scope related best practices are established, scheduling and estimation best practices cannot be rolled out.
  • Without Scope, Schedule and Cost baselines Monitoring & Controlling becomes ineffective, Change management process will loose it’s purpose. These are a few examples.

Integrated Project Monitoring & Control

After detailed research of all the globally accepted project management best practices by PMI, AACE, PRINCE2, LEAN & Agile for more than two decades we architected the Integrated Best Practices Approach to Project Monitoring & Control which cuts across all the globally accepted project management best practices. In a nutshell, it is the best of the best project management best practices hand picked and fine tuned from a practitioner’s perspective to make projects successful. Applying this integrated approach will not only resolve the current project management issues but will also forecast problems before they occur thus saving money and time.

Architecture of the Integrated Best Practices approach to Project Monitoring & Control

Courtesy SmartProject
Phase#1 Preparation

Focus – Get ready for the planning phase

  • Scope definition
  • Stakeholder identification
  • Role definition
  • High level risk definition
  • Information dissemination
Phase#2 Planning

Focus – Plan in a way to facilitate almost real time project progress monitoring & controlling and forecasting

  • Work Breakdown Structure definition (WBS)
  • Organization breakdown structure definition (OBS)
  • Establishing WBS-OBS linkages
  • Resource Breakdown Structure (RBS)
  • Estimation & Budgeting
  • Cost breakdown structure
  • Schedule development
  • Rules of credit
  • Interfaces with other systems
  • Plan communications
  • Quality planning
  • Risk planning
  • Contingency planning
Phase#3 Execution

Focus – Collect accurate and timely execution data. Control the dynamic incidents

  • Project execution data capture
  • Change control
  • Quality management
  • Risk control
  • Contingency management
  • Communication
Phase#4 Monitoring & Controlling

Focus : Provide almost real time project status information to key stakeholders.

  • Planned Value
  • Earned Value
  • Actual Cost
  • Variance analysis
  • Forecasting Schedule & Cost
  • Control schedule
  • Control costs
  • Forensic analysis
  • Control quality
  • Snag management
  • Risk monitoring
Phase#5 Closing

Focus : Learning, Asset transition

  • Formal closure
  • Asset transition

The implementation aspects

Due to size and complexity of the present day projects, implementing best practices manually is not feasible. One must leverage the existing technology options to harness the power of integration of the best practices in order to accomplish the potential benefits. Technology driven best practices adoption can provide almost real time project management information for timely decision making.

Best practices – Technology adoption quadrants

  1. High best practices adoption with high technology adoption (desired)
  2. Low best practices adoption with high technology adoption (sub-optimal performance)
  3. High best practices adoption with low technology adoption (low productivity)
  4. Low best practices adoption with high low technology adoption (danger zone)

High best practices adoption with high technology adoption is the way to go. Low best practices adoption with high technology adoption will provide some improvement which is sub-optimal. High best practices adoption with low technology adoption can slow down the organization. And finally, those in the low best practices adoption and low technology adoption zone are in the danger zone. Technology enabled best practices adoption is key to enhancing project success rates in highly competitive and complex environments.

Conclusion

Even though the projects are unique, the root causes of project failures are common and interconnected. Already existing project management best practices have solutions to address these problems. As the root causes of failures are inter linked, what is required is an integrated best practices approach to solve these problems. This approach along with the right technology adoption will help project management practitioners to increase their project success rate and profitability.

Join the upcoming webinar on Integrated Project Monitoring & Control for EPC Projects