Early Warning

Earned value calculations can be done at various points during a project, but the numbers tend to stabilize when you're about 20 percent through, says Quentin W.

Fleming, co-author of Earned Value Project Management (Project Management Institute, 2006) and a management instructor at the University of California, Irvine.

"So the point is, if you're 20 percent through the project, you can predict what the final costs are going to be, plus or minus 10 percent," Fleming says. "It's a very powerful tool, and here's what's powerful: If you're 20 percent through a project and you've been authorized $1 million, and your cost efficiency to date suggests you're going to need $2 million to finish the project, then management has decisions [to make]."

Despite EVM's reputation for offering insight into project progress, many IT executives aren't yet embracing the discipline, partly because the underpinnings that make it work aren't in place.

"The concept of earned value is really elementary project management. But the problem with many IT organizations is that they don't use rigorous project management methodology," says Dan Gingras, a partner in the information technology leadership practice at Tatum, a consulting firm.

"In order to do earned value management, you have to have a good budget," he says. "In order to have a good budget, you have to back up one step further and follow a good project management methodology."

Project managers and IT leaders need to accurately define a project's scope and requirements, develop specific work packages and work breakdown structures, and then establish a good budget, says Gingras, who also teaches technology strategy and system design as an adjunct faculty member at Boston University's Metropolitan College.

Moreover, Gingras and others say that employing EVM in projects takes plenty of training. There are books and multiday courses that teach the practice.

So, why go through all this upfront work? Gingras points to a well-known fact: "Significant numbers of projects aren't completed on time or on budget, or they don't deliver what they're supposed to deliver."

EVM can help improve your chances of project success, says McCauley. "The idea behind earned value is seeing what you need and when you need it. It's all about management, and it's all about control."