Dec 31 2009

The Virtue of Value

Mystified and a little daunted, agencies flounder as they try to implement earned value management. Here's how you can get started and avoid tripping up.

Photo: James Kegley
Earned value management "forces you to plan well on the front end," OPM's Liz Mautner says.

Earned value management is touted as a simple concept: Measure project performance in real time against a detailed plan that takes into account a project's scope, schedule and budget so your agency can make accurate predictions about final cost and schedule.

The carrot dangling out there as a benefit is the ability to make critical adjustments before a project sinks under cost or budget overruns.

In practice, though, earned value management (EVM) is a lot more complicated. A few agencies, including the Environmental Protection Agency, NASA and the Office of Personnel Management, have begun using this project oversight tool for their e-government initiatives, but most agencies are struggling just to develop internal policies on the use of EVM.

"For a lot of people, EVM is actually a very scary concept," says Joel Capperella, public-sector marketing manager for Primavera Systems, a project management consulting firm in Philadelphia.

For its part, the Office of Management and Budget has acknowledged this scary truth and, to encourage adoption of EVM, in August it sent what it called a room-for-improvement memo to CIOs.

A year earlier, the Bush administration directed agencies to begin using EVM for their e-government efforts and made it one of the e-government rating categories on the President's Management Agenda.

More Is Better

With this new guidance, OMB upped the requirements for EVM by directing agencies to use it for the planning and implementation of all IT projects. The memo, which sets a Dec. 31 deadline for agencies to develop comprehensive EVM policies, provides a list of consulting and education resources to help agencies meet the winter deadline.

The task of developing an EVM process doesn't have to be as onerous as it appears, and the effort does deliver the promised benefits, says Liz Mautner, director of administration and finance for OPM's Office of E-Government Initiatives.

Mautner oversees implementation of EVM on five high-profile e-government projects, including Recruitment One-Stop, E-Payroll and E-Training. Getting the EVM project off the ground took a concerted effort involving the CIO and CFO to fully align OPM's program with the OMB requirements, she says.

"It takes a lot of commitment, resources, cooperation and top-down support," Mautner points out.

To overcome the hurdles and get started, Mautner and other industry experts recommend a six-pronged action plan:

The Right Project for the Tool

Seeing a payoff sooner rather than later will help your agency's IT team gain confidence in EVM as a useful performance measurement method. You should choose a project with the following characteristics:

• Something you already planned to do
• In the concept stage
• Duration of less than 12 months
• Budget of just over $5 million
• Clearly defined scope, schedule and budget

Educate yourself and your employees: You need to understand not only EVM but also OMB requirements and the 32 guidelines that make up ANSI 748, the standard created by American National Standards Institute to govern EVM practices.

You should also familiarize yourself with available EVM tools—as well as consultants—that can help ease your agency's implementation of this project management practice.

Dennis White, principal consulting manager for Robbins Gioia, a project management specialist in Alexandria, Va., suggests talking to other agencies further along in the process and checking out the education and training resources offered by the CIO Council (, the Program Management Systems Committee of the National Defense Industrial Association ( and Project Management Institute (

"This starts to establish the knowledge base, and you really can't move forward until you do that," White says.

Seek cross-agency cooperation: Mautner says that early on in her EVM efforts, she made it a point to involve not only her program managers and CIO but also the CFO.

"Key to EVM is to tie it to the actual budget and the actual spending that takes place, so there's a financial component there," she says. "You're going to need that functional support."

Break small steps into smaller steps: "It's best if you move slowly, to keep it as simple as possible and check in with your stakeholders on a frequent basis," says Jon Desenberg, a senior consultant with the Performance Institute of Washington.

He says this incremental approach to EVM is sometimes referred to as adaptive project management.

Create a simple but effective policy: Spell out what projects are appropriate and what payoffs managers can expect, says Mautner, but also take the time to research and fully document your budget and the rates you plan to pay contractors.

But your agency needn't start from scratch, she adds. Take advantage of the new EVM policy template that the CIO Council developed and released last month.

Embrace high standards: Match up your EVM process with the OMB requirements and make sure it's compliant with ANSI 748.

At OPM, "we took the time to come up with a very detailed implementation plan and schedule early in the process, so that we understood the full magnitude and scope of the effort that was going to be required," Mautner says. "We wanted to do it right, from the start."

Implement a change management program: EVM requires that an agency's employees think differently about project performance, Primavera Systems' Capperella says.

That means the EVM team needs to take the time to communicate the plans for the use of the process to all employees; to address employee concerns before they become problems; and to use incentives to encourage data sharing.

"The key to making this thing work is your ability to collect progress reports from the folks doing the work," Capperella says. "If they won't share it with you easily and honestly, it's not going to work."

The Payoff

Establishing EVM within an agency might be hard, "but it is well worth it, as far as I'm concerned," Mautner sums up. "If nothing else, it forces you to plan well on the front end and, on the back end, it sort of rates you on how well you did with your planning."