Dr. Bower confirmed that earned value management (EVM) is not widely adopted, and that many project managers see the methodology as being overly complex and difficult to implement. He identified several serious challenges associated with conventional EVM.and addressed the first issue by creating a new theoretical concept called Assured Value Analysis (AVA). This add-in process provides two new measures, permitting improvements to EVM that take into account the added certainty provided through procurement. Assured Value (AV) represents the budget for a future signed contract, and Expected Cost (EC) represents the agreed cost of that contract. Those measures permit the calculation of a Total Cost Variance that includes not only cost deviations to date, but also future ones to which the project team is already committed. AVA also allows conventional EVM formulae to take into account the Assured Value and Expected Cost of future signed agreements. A simple notional project is used to demonstrate the implementation of AVA. He resolved the remaining challenges and issues through realising that the isolation of project phases would provide a simplified but more dependable methodology, one that also provides features not found in conventional EVM. Significant milestones are normally planned to occur at the end of a project phase. By assessing project performance only at the end of each completed phase, performance calculations are significantly simplified.. His new technique, Phase Earned Value Analysis (PEVA) simplifies the calculation of PV, EV and AC, and also provides benefits that are not possible with EVM. Since the planned and actual phase completion dates are known, an intuitively simple but accurate time-based schedule variance and schedule performance index (i.e. SVP and SPIP) can be measured. PEVA also permits the forecasting of future phase end cost figures and phase completion dates using the phase CPI and SPI ratios. Since PEVA employs data points having specific x axis and y-axis values, those can be readily plotted and trend lines identified with standard spreadsheet functions. This is a powerful feature, as it allows key project stakeholders to visualise emerging project performance trends as each phase is completed. Finally, he successfully combined the AVA and PEVA concepts, resulting in a new EVM methodology - Phase Assured Value Analysis (PAVA) - which takes into account the assurance provided by procurement, simplifies the calculation of earned value through phases, and provides powerful forecasting and charting features. He validated this new combined approach in multiple respects. The new AVA and PEVA formulae were rigorously established and confirmed through standard algebraic procedures. The formulae were tested in sample project situations, to clearly demonstrate their functions. He argues that the PAVA approach conforms to the 32 criteria established in the United States for full EVM compliance. He presented AVA and PEVA to critical audiences at major project management conferences in North America and the UK, as well as several gaining expert criticism from organisations and practitioners. Finally, he used archived cost and schedule records to retrospectively test the combined PAVA methodology on a significant office facilities and technology program.
| Identifer | oai:union.ndltd.org:ADTP/210201 |
| Date | January 2007 |
| Creators | Bower, Douglas, not supplied |
| Publisher | RMIT University. Property, Construction and Project Management |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
| Rights | http://www.rmit.edu.au/help/disclaimer, Copyright Douglas Bower |
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