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106 of 110 people found the following review helpful.
Unique book about a powerful project management tool
By Mike Tarrani
This is the only book that I know of that is totally devoted to earned value project management. Before proceeding with a review I believe that a few facts about earned value project management are in order.
First, earned value project management has graduated from a tool that was little known outside of the Department of Defense contracting community to a mainstream project control tool. This milestone occurred when it became a part of the Project Management Institute's Project Management Body of Knowledge (PMBOK).
Second, "earned value" is a misunderstood term. I have had clients who thought it was a consultant's trick to raise prices or hide the true costs of projects in a bunch of mumbo jumbo. Just the opposite is true - earned value is a proven, powerful tool with which to control project costs and schedules. If you use it any poor estimating from the project planning phase will become quickly apparent, allowing you to recalibrate the project before it gets out of control and cannot be salvaged. As an aside, I use a heuristic that boils down to: if you are 15% off cost or schedule by the time you are 15% into a project you will not recover using your original baseline. Earned value project management techniques will give you ample warning before you drift into an unrecoverable situation like that.
The authors have distilled thousands of pages of DoD instructions and guides and lessons learned from the inception of the Cost/Schedule Control Systems Criteria (C/SCSC)into a 141 page book that thoroughly covers the subject. The C/SCSC is where earned value was first defined in the late 1960s.
I like the way the book is structured. It starts with a brief overview of earned value, from where it came and how it finally managed to escape from the bureaucratic world of DoD to become an integral part of the PMBOK. This overview segues into a chapter titled Earned Value Body of Knowledge, which is where the book gets interesting. This is followed by seven chapters that step you through how to correctly plan, schedule and control projects based on earned value.
The key strength is the authors demonstrate how projects are traditionally planned and controlled, and the pitfalls of this approach. For example, using cost/funding where you get a budget, develop a spend plan and then attempt to determine a project's health by comparing the burn rate to the spending plan is like flying blind. Why? The cost components are not integrated with schedule components. This results in controls that will never reveal any relationship between budget and schedule, and is a big reason why projects too often have cost or schedule overruns.
By demonstrating problems with traditional approaches to project management the authors lay the groundwork for how to employ earned value to avoid these problems. They start by systematically stepping through a project, starting with scoping, followed by planning and scheduling. This material is excellent and on the mark. It introduces you to work breakdown structures, organizational breakdown structures, and how the two intersect to form control accounts (the authors use the term "cost account", but my background has instilled "control account" into my vocabulary).
Earned value really begins taking shape in chapter 7, Establish Project Baseline, where the book quickly picks up pace. While earned value is simple in concept, there are many subtle elements that usually become apparent only with experience. The authors highlight these subtle elements, such as examples of how to interpret interrelationships between planned vs. actuals of work, cost and schedule. They provide standard tools such as schedule and cost performance indices (SPI and CPI), and add new wrinkles, such as "to complete performance index" (TCPI), which is a powerful management tool that I only discovered a few years ago.
The best reason for reading this book is it will give you the tools and techniques with which to properly plan projects and prevent cost and schedule overruns. If you are pursuing the Project Management Professional certification this book is the best single source of information that I know of on earned value. Everything you need to know about earned value is packed into 141 pages of a book written by two renowned experts on this subject.
25 of 25 people found the following review helpful.
Application of Earned Value can avoid legal problems.
By Harinath Thummalapalli
As explained in Chapter 12, applying Earned Value concepts on projects in a publicly traded company may avoid legal problems surrounding accurate reporting of the financial situation of a company. This is because most projects if not completed could result in inaccurate financial reporting for a publicly traded company (if some form of performance measurement wasn't used while the project was in progress). It is interesting that this book was written before the accounting scandals of 2001-2002 and one of the few books that addresses this aspect. I don't know how much of the accounting scandals involved projects but I wouldn't be surprised if the SEC starts imposing stricter rules on the financial reporting surrounding projects in the future.
This book is an excellent treatise on how to measure project performance from both a cost and schedule perspective. This is what Earned Valued Analysis is all about. The book never gets too complicated and is easy to follow the whole way (200 pages). A word of caution - this may be too much material to digest if you are trying to prepare for the PMP. Rita Mulcahy's PMP Exam Prep has enough information on Earned Value Analysis that will easily help you get through that section on the PMP exam. But as soon as you obtain your PMP certification, I would highly recommend making the mastery of the material in this book your next goal. The real payoff in applying the project management principles comes when you are able to measure the project performance on top of controlling project performance and presenting the results to your project sponsors.
By the way, the concepts involved in Earned Value Analysis are extremely simple. It is amazing that so much control over your project can be attained by paying attention to the simple concepts of Earned Value, Planned Value, Actual Cost, and the related concepts of CPI and SPI. After setting up the project baseline to calculate these variables on a frequent basis, you are ready to control and predict the future of the project.
The first four chapters of the book go into the overall concepts and the history of Earned Value. Chapters 5-10 address how to set up your project for fully utilizing the power of the Earned Value concepts - all the way from setting up the scope of the project to forecasting. Chapter 11 discusses how the concepts apply to the private sector and Chapter 12 deals with the legal implications.
The authors are related to Primavera Systems (the leading provider of Project Management Software for the Engineering & Construction industries) either as CEO or consultant to Primavera. PMI used to recommend this as required reading to prepare for the PMP exam but I am not sure if they still do. In either case, I don't believe it is required reading. I tried to read it before the PMP exam and I couldn't digest the material because there was too much on my mind already. But now that I have passed the PMP exam, I have thoroughly enjoyed learning the concepts and applying them to my current projects.
I hope everyone masters this subject and more projects in the world would end up successful. Good luck!
31 of 33 people found the following review helpful.
Where is the rest?
By D. Laffineuse
So far I have found two books dedicated to the topic of earned value: this book by Fleming and Koppelman and another book entitled `Using Earned Value' by Alan Webb. Note that I am not listing the earned value `Cliff notes' entitled `Project Management: The Commonsense Approach" by the Lamberts, which will not add to your understanding of earned value management or analysis, and serves, at best, as a memory jogger on the basic concepts.
"Earned Value Project Management, Second Edition" by Fleming and Koppelman provides a good treatment of the history of earned value and of the calculation methods of its core measurements. However the book falls short in terms of methods of analysis and interpretation of these measurements, which is really where project managers need guidance and expertise. Indeed calculations are automated by the scheduling packages (e.g. Microsoft Project, Primavera, etc.), in other words getting the numbers is never the problem (although some packages have had their share of problems doing this), or let's just say it's the easy part. Obviously one needs to understand how the numbers are calculated and what they mean but this part of earned value does not require a whole book about it. The true challenge in earned value management is the analysis part. Once you have the numbers, you need to understand what they mean to your project, how they trend, how they relate/influence one another and most importantly how you should use them in gauging the health of your project. This information then needs to be translated in either corrective actions (which are hopefully proportional to the problem at hand) or inaction (provided that you have made the conscious decision, based on the data, to keep things as they are). I believe that this is where this book falls short. It gives the reader an understanding of the concepts but lacks in the guidance that is required for a true, practical, and day-to-day application of earned value on projects. In another words, it's a good start but not quite enough.
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