Earned Value Management
Introducing Time Based Schedule Variance
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In classical Earned Value Management, the parameters Planned Value and Earned Value are used to determine the schedule position of the project and estimate the remaining time to complete the project.
When we look deeper into PV, EV, and SV = EV – PV, we find some strange things when we look at the moment when the project is completed.
Remember that a project is complete when all the scope has been completed. At that moment EV = BAC and what is very strange is that also the SV = 0 whatever the completion time of the project is.
Even a project with delays will show that the SV = 0, hence it should be on time but when we look at it, it is late!
The problem here is related to the definition of the schedule variance which is based on the cost and not on the time. Basically, we should not compare the actual status with the planned status based on cost but on time.
Let us take an example at a moment t1, we have the PV(t1) and EV(t1). Let us not look at the time we should have reached the EV(t1) and find the time t2 for which PV(t2) = EV(t1).
We expected to have EV(t1) at time t2 and we can now define the time-based schedule variance which is the difference between t2 and t1.
We can based on this new definition define the concept of earned schedule management.
Another element to consider is that the classical approach is basically applicable for projects on schedule or late until the time is less than the theoretical end time of the project. In case the project is early, similar problems arise as with projects in delay.
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