20 years of Earned Schedule (1/3)
How to measure the project time?
Earned value management (EVM) is a technique that was proposed by the US military during the 1960s as a formal project management and control technique to monitor projects in progress. The military was apparently ahead of its time, as it was an early call to use data-driven project management methods at a time when the words “big data” and “data science” had not yet been invented (or at least they were not yet so popular as they are today). The method has had an impressive rise since its introduction, and most companies that take Project Management (PM) seriously have at least heard of the technique and many use it in one way or another in their project control system.
EVM is obviously not perfect and, like any PM methodology, shows a number of shortcomings. Those shortcomings were known, but ignored for many years. Despite a wide range of case studies, few academics were interested in coming up with improvements. Until Walt Lipke came on the scene. As a deputy chief of the Software Division at Tinker Air Force Base (now retired), he wrote an article in 2003, exactly 20 years ago, entitled “Schedule is different”. The article could have easily faded into the background, but it didn’t, and its ideas still resonate to this day. After all, he argued that the usual formulas in EVM were correct for cost control, but showed some serious flaws for time control. Time is different.
After outlining some shortcomings of the EVM method, Walt came up with an improved method that he called Earned Schedule (ES) as an alternative to the generally accepted Earned Value (EV) metric. The figure below shows the performance of a project at week 6 (today). The planned duration of the project is 9 weeks with a total planned budget of 30,000 Euro, but the project suffers from delays. The EVM will of course detect this delay, but everything becomes much clearer (and more correct) when the ES method is used.
How to tell the time?
The ES idea is not fundamentally different from the original concept. The earned value metric, which values the actual execution of the project against the original plan, is expressed in a monetary unit (e.g. 15K Euro in the figure), and thus does not paint a clear picture of the actual delay of the project . The desired execution should amount to 26K Euro on week 6 according to the plan (that is the planned value), which immediately results in a delay of 11K Euro (15–26 = -11). Time is measured in a monetary unit. Understand who can understand.
When you measure time, you want to hear days, weeks or months, not dollars or euros.
In the renewed ES concept, money is automatically converted into time, and the earned schedule value of the project in week 6 is therefore equal to 4 weeks. This value is identical to the earned value of 15K Euro. Only the time aspect is now much clearer.
New formula
The calculation of the ES value is simple, and follows the basic logic of EV (but expressed in time). If 15K Euro is the value of the work performed on week 6 measured according to the plan, then one only has to find when that value should actually have been earned in the plan. The planned value in the figure displays that plan (expressed in a monetary unit), and you don’t have to be a mathematical genius to see that the value of 15K Euro should have been realised on week 4. Clearly a delay of exactly 2 weeks (4–6).
15 minutes of fame
I began a series of research studies not long after the publication of Walt’s article, whom I did not know at the time, and after 20 years, our joint interest has grown into an intense friendship that I am very proud of. The research yielded its first results in 2010 when my very first book “Measuring Time” was published. The book received an award from the International Project Management Association in 2008 (2 years before its publication with Springer) where, as a youngster, I was allowed to present my research to an audience of practitioners in Rome (Italy). An unforgettable experience that is now behind me. I’m much older now, and maybe a little wiser, but I still have a nostalgic feeling for those days when everything had yet to begin. Time flies when you’re having fun. I owe Walt a lot!
That’s it?
Not really! The ES idea looks very simple, and it actually is, were it not for the incredible potential for improvement hidden behind that simplicity. After my book publication, the new concept of time has led to a lot of further academic research (not just from my team) with a lot of new exciting insights in the domain of project control. But these exciting results are for a new article (20 years of earned schedule (2/3)). Let’s first celebrate Walt’s 20th article anniversary!
If you use this article, please cite:
- Lipke, W., 2003. Schedule is different. The Measurable News (Summer) 31–34.
- Vanhoucke, M., 2010. Measuring time — Improving project performance using earned value management. International Series in Operations Research and Management Science vol. 136. Springer.
