DTU ProjectLab - User contributions [en-gb]

Determining Measurement Methods in Earned Value Management

2019-03-04T11:47:50Z

Veronikabanko: /* Annotated Bibliography */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to EVM==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

EVM is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''"the fundamental building block which forms the project’s measurement baseline".'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV measurement methods are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''"is directly related to specific end products or services with distinct and measurable points"''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, the total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that one's project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, they order the necessary materials for the table. When the wood has been ordered they already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives one to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and would like to calculate the current EV for the snapshot? Since they haven't reached 100% of completion, the manager can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
EVM is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
*'''PMI PMBOK® Guide – Sixth Edition (2017)'''
The PMI standard for project management introduces the earned value management in general (pp.105.), but lacks the detailed description of the practice. It contains information about the importance and benefits of earned value analysis (therefore it is useful to get an overview of the practice), but in order to implement it into real practice further examination is required.
*'''PMI Practice Standard for Earned Value Management – Second Edition (2011)'''
This practice standard for earned value management aims to give the previously desired examination, namely the detailed description of the practice with all of its topics and steps. Besides it gives a more accurate introduction to the process (Chapter 1, pp.5-12.), it also places the topic of the article into the various steps of EVM (Chapter 7, pp.35-43.). Furthermore, it defines the inputs and output of the measurement process, the explanation of the different methods with illustrations for a better understanding, and then ends with recommendations of the usage of the methods.
*'''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition.'''
This book is for the same purpose than the previous standard, which is the description of earned value management but in even more details. In chapter 9 (pp.85-108.), more methods used to plan and measure earned value are discussed along with examples. It also provides information about Control Account Plans that helps to get an overview of the methods and their usage in the real world.

==References==
<references />

Determining Measurement Methods in Earned Value Management

2019-03-04T11:06:21Z

Veronikabanko: /* Annotated Bibliography */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to EVM==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

EVM is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''"the fundamental building block which forms the project’s measurement baseline".'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV measurement methods are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''"is directly related to specific end products or services with distinct and measurable points"''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, the total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that one's project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, they order the necessary materials for the table. When the wood has been ordered they already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives one to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and would like to calculate the current EV for the snapshot? Since they haven't reached 100% of completion, the manager can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
EVM is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
PMI PMBOK® Guide – Sixth Edition (2017)
The PMI standard for project management introduces the practice of earned value management in general (pp., but lacks the detailed description of the
PMI Practice Standard for Earned Value Management – Second Edition (2011)
Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition.

==References==
<references />

Determining Measurement Methods in Earned Value Management

2019-03-04T10:42:12Z

Veronikabanko: /* Milestones with Weighted Values */

Determining Measurement Methods in Earned Value Management

2019-03-04T10:35:58Z

Veronikabanko: /* Fixed Formula */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to EVM==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

EVM is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''"the fundamental building block which forms the project’s measurement baseline".'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV measurement methods are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''"is directly related to specific end products or services with distinct and measurable points"''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that one's project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, they order the necessary materials for the table. When the wood has been ordered they already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives one to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and would like to calculate the current EV for the snapshot? Since they haven't reached 100% of completion, the manager can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
EVM is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
undone yet

==References==
<references />

Determining Measurement Methods in Earned Value Management

2019-03-04T10:29:01Z

Veronikabanko: /* Introduction to EVM */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to EVM==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

EVM is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''"the fundamental building block which forms the project’s measurement baseline".'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV measurement methods are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''"is directly related to specific end products or services with distinct and measurable points"''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
EVM is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
undone yet

==References==
<references />

Determining Measurement Methods in Earned Value Management

2019-03-04T10:16:04Z

Veronikabanko: /* Measurement Methods */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to EVM==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

EVM is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''"the fundamental building block which forms the project’s measurement baseline".'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV measurement methods are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''"is directly related to specific end products or services with distinct and measurable points"''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
EVM is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
undone yet

==References==
<references />

Determining Measurement Methods in Earned Value Management

2019-03-04T10:15:25Z

Veronikabanko: /* Control Account Plan (CAP) */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to EVM==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

EVM is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''"the fundamental building block which forms the project’s measurement baseline".'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV measurement methods are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
EVM is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
undone yet

==References==
<references />

Talk:Agile One Page Project Management

2019-02-26T20:45:52Z

Veronikabanko:

==Feedback on Abstract:==

{|
|'''Text clarity & language'''|| The text is okay, however there's a few grammatical errors.
|-
|'''Description of the tool/theory/concept'''|| Good. However, a short description of "Agile One Page Project Management" would be beneficial.
|-
|'''Article purpose explanation'''|| Well elaborated. However, do you have permission to mention "LEO Pharma A/S" in your article? Best practice is just to mention "based on a pharmaceutical company/pharmaceutical industry."
|-
|'''Relevance to curriculum '''|| Relevant
|-
|'''References'''|| Good references.
|}
==Feedback 1 | Reviewer name: ''Theodoros Seremetakis''==
===Question 1 · TEXT===
'''Quality of the summary:'''

Does the summary make the key focus, insights and/or contribution of the article clear?

What would you suggest to improve?

===Answer 1===
''Before diving into the article's subject, the author introduces the reader to the concept, really good summary''

===Question 2 · TEXT===
'''Structure and logic of the article:'''

Is the argument clear?

Is there a logical flow to the article?

Does one part build upon the other?

Is the article consistent in its argument and free of contradictions?

What would you suggest to improve?

===Answer 2===
''Overall the article is coherent and transparent.''

===Question 3 · TEXT===
'''Grammar and style:'''

Is the writing free of grammatical and spelling errors?

Is the language precise without unnecessary fill words?

What would you suggest to improve?

===Answer 3===
''The author masters the langauge pretty well. Easy reading.''

===Question 4 · TEXT===
'''Figures and tables:'''

Are figures and tables clear?

Do they summarize the key points of the article in a meaningful way?

What would you suggest to improve?

===Answer 4===
''The presented figures gives the reader a quick and good understanding of what is being explained in the article. Not too complex, not too simple.''

===Question 5 · TEXT===
'''Interest and relevance:'''

Is the article of high practical and / or academic relevance?

Is it made clear in the article why / how it is relevant?

What would you suggest to improve?

===Answer 5===
''''

===Question 6 · TEXT===
'''Depth of treatment:'''

Is the article interesting for a practitioner or academic to read?

Does it make a significant contribution beyond a cursory web search?

What would you suggest to improve?

===Answer 6===
''The topic is relevant and interesting to read''

===Question 7 · TEXT===
'''Annotated bibliography:'''

Does the article properly cite and acknowledge previous work?

Does it briefly summarize the key references at the end of the article?

Is it based on empirical data instead of opinion?

What would you suggest to improve?

===Answer 7===
''It seems like everything is as it should be. Good job.''

==Feedback from Veronika==
(Sorry for not aligning them with the questions, I just wrote down every thought I had with this article.)

All in all I loved your article, it would have helped me a lot last semester if I knew about this agile one-pager! (We were working with SCRUM) So my thoughts about the article, that you could take into concideration when improving it for the final "hand-in":

* Regarding the abstract I think it is better not to devide it into paragraphs.
* The figures are too small – it would be awesome to see them so that you can visualize the text and align the described part to the picture at the same time.
* I had a hard time figuring out if you are talking about a person or a progress in the very first sentence. ((”What is good project management? Some will say that good project management is one who gets the project done on time and on budget and has the ability to communicate project performance (scopes, timeliness and planned versus actual resources) and expectations to the team members and stakeholders.”))
* I think it might be better not to use the term project owner instead of project manager before the agile method is introduced. It confused me, at least. :)
* I think the product owner’s and the SCRUM master’s role are vica versa. So the SCRUM master is the one who knows the process of SCRUM, what needs to be organized and be done, and the product owner is who prioritizes the requirements that needs to be addressed because he acts like the owner of the future product so he know what he wants to be in the product. I will send you a quick guide about SCRUM to your dtu e-mail. :)
* Also, it might be important to note that the product owner and SCRUM master are acting as team members as well during the whole development. * Those responsibities of them are just ”add-ons”, as far as I know. :)
make it clear: is she/he a product owner or a project owner? You keep using both of them but as far as I know there is no such a role called ”project owner” (I might be wrong).
* Maintenance – Step2: As it can be seen from Figure XX. Watch out, you forgot to change XX. You also have figure xx in step 3.

In Limitations:
* I think this section is a bit too much. At first it felt like it has so much limitation so it doesn’t even useful. :D But it turned out that you included other elements here as well which might be better placed somewhere else. For instance the 2. paragraph is more about its advantages, so I suggest to make an advantages/usefullness headline and list those their (same applies to the similarity measurement paragraphs).
* This similarity measurement/comparision could be visualized too, but this is really just a luxurious plus.
* Industrial use shouldn’t also be under limitations right? :)
* But, the second (and at the same time last) paragraph of the Industrial use section should be under Limitations, as well as section Limitation should be the last section, after Industrial use.

I hope my comments are valuable for you and help you make the article even better!

Determining Measurement Methods in Earned Value Management

2019-02-26T19:33:34Z

Veronikabanko:

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to EVM==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

EVM is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV measurement methods are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
EVM is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
undone yet

==References==
<references />

Talk:Crisis Management in Construction Projects

2019-02-26T19:27:52Z

Veronikabanko: /* Feedback 4 - Veronika Bankó */

==Feedback 1 | Reviewer name: ''Yulisa Gutierrez''==
===Question 1 · TEXT===
'''Quality of the summary:'''

Does the summary make the key focus, insights and/or contribution of the article clear?

What would you suggest to improve?

===Answer 1===
''You could expand in depth a little more on your abstract. Also, the last sentence throws off the flow of your abstract. Maybe try saying something like "Aside from offering a brief background on crisis management, the main goal of this article is to cover the various tools project managers have to prevent crises in relations to cost overrun in construction projects, and the available tools to mitigate cost after crises.'"'

===Question 2 · TEXT===
'''Structure and logic of the article:'''

Is the argument clear?

Is there a logical flow to the article?

Does one part build upon the other?

Is the article consistent in its argument and free of contradictions?

What would you suggest to improve?

===Answer 2===
''The structure is a little confusing due to the fact that it is not clearly shown what is a subcategory of what. Also, I feel like instead of just listing information, try to explain WHY its important to know that information, and how that info could alter or enhance the situation. Just a small tip''

===Question 3 · TEXT===
'''Grammar and style:'''

Is the writing free of grammatical and spelling errors?

Is the language precise without unnecessary fill words?

What would you suggest to improve?

===Answer 3===
''There are many small grammar mistakes such as miss-spelling, erroneously using "there, their, theyre, or there are". In the Theory section you forgot a period. Small things. Nothing too crazy.''

===Question 4 · TEXT===
'''Figures and tables:'''

Are figures and tables clear?

Do they summarize the key points of the article in a meaningful way?

What would you suggest to improve?

===Answer 4===
''No figures put up, but dont worry, I did the same haha. I dont know how to upload the pictures or figures onto the wiki article yet''

===Question 5 · TEXT===
'''Interest and relevance:'''

Is the article of high practical and / or academic relevance?

Is it made clear in the article why / how it is relevant?

What would you suggest to improve?

===Answer 5===
''I feel like it was just a lot of information but not a lot of "tying together" to represent a full argument or idea. ''

===Question 6 · TEXT===
'''Depth of treatment:'''

Is the article interesting for a practitioner or academic to read?

Does it make a significant contribution beyond a cursory web search?

What would you suggest to improve?

===Answer 6===
''Ive covered these questions above''

===Question 7 · TEXT===
'''Annotated bibliography:'''

Does the article properly cite and acknowledge previous work?

Does it briefly summarize the key references at the end of the article?

Is it based on empirical data instead of opinion?

What would you suggest to improve?

===Answer 7===
''Citation is good''

==feedback 3 - mercedes hachmann==

the theory part looks somewhat fragmented. It should be ok, if you were planning on expanding the individual sections, otherwise I would recomend changing the layout. Also, the different header sizes look rather random and don't really help the structure as I think you intended - maybe use normal text in bold and italics instead of headers for the under points?

==Feedback 4 - Veronika Bankó==
(Sorry for not structuring the information, instead I will just write every tought one by one)

* The abstract is good.
* I didn't get the point why this article is just about construction projects. What are the differences between them and other project?
* Try to be more specific. I do agree with the others, that you might wanted to cover too much but at the end you ended up with too much information. This might be why you have so much bullet-points --with out being bullet-points (it is hard to read them in this state)-- and so much headlines. I feel like there are a lot of information listed one by one but with just little specific examination on each elements and also, I can't really see the connection between the different headlines. So maybe if you don't want to narrow down the concept, maybe try to align them together so that the reader can understand the connections as well.
* I know you are going to put some examples and pictures in, just one good place could be at the certain social structures ”which ensure a smoother transition of information than others”.
* And also I liked your car example but since we are talking about construction,
* Probably you are going to fix the references, but just in case: You need to use the wiki reference structure (numbers with [] brackets)

Talk:Crisis Management in Construction Projects

2019-02-26T19:27:02Z

Veronikabanko:

==Feedback 1 | Reviewer name: ''Yulisa Gutierrez''==
===Question 1 · TEXT===
'''Quality of the summary:'''

Does the summary make the key focus, insights and/or contribution of the article clear?

What would you suggest to improve?

===Answer 1===
''You could expand in depth a little more on your abstract. Also, the last sentence throws off the flow of your abstract. Maybe try saying something like "Aside from offering a brief background on crisis management, the main goal of this article is to cover the various tools project managers have to prevent crises in relations to cost overrun in construction projects, and the available tools to mitigate cost after crises.'"'

===Question 2 · TEXT===
'''Structure and logic of the article:'''

Is the argument clear?

Is there a logical flow to the article?

Does one part build upon the other?

Is the article consistent in its argument and free of contradictions?

What would you suggest to improve?

===Answer 2===
''The structure is a little confusing due to the fact that it is not clearly shown what is a subcategory of what. Also, I feel like instead of just listing information, try to explain WHY its important to know that information, and how that info could alter or enhance the situation. Just a small tip''

===Question 3 · TEXT===
'''Grammar and style:'''

Is the writing free of grammatical and spelling errors?

Is the language precise without unnecessary fill words?

What would you suggest to improve?

===Answer 3===
''There are many small grammar mistakes such as miss-spelling, erroneously using "there, their, theyre, or there are". In the Theory section you forgot a period. Small things. Nothing too crazy.''

===Question 4 · TEXT===
'''Figures and tables:'''

Are figures and tables clear?

Do they summarize the key points of the article in a meaningful way?

What would you suggest to improve?

===Answer 4===
''No figures put up, but dont worry, I did the same haha. I dont know how to upload the pictures or figures onto the wiki article yet''

===Question 5 · TEXT===
'''Interest and relevance:'''

Is the article of high practical and / or academic relevance?

Is it made clear in the article why / how it is relevant?

What would you suggest to improve?

===Answer 5===
''I feel like it was just a lot of information but not a lot of "tying together" to represent a full argument or idea. ''

===Question 6 · TEXT===
'''Depth of treatment:'''

Is the article interesting for a practitioner or academic to read?

Does it make a significant contribution beyond a cursory web search?

What would you suggest to improve?

===Answer 6===
''Ive covered these questions above''

===Question 7 · TEXT===
'''Annotated bibliography:'''

Does the article properly cite and acknowledge previous work?

Does it briefly summarize the key references at the end of the article?

Is it based on empirical data instead of opinion?

What would you suggest to improve?

===Answer 7===
''Citation is good''

==feedback 3 - mercedes hachmann==

the theory part looks somewhat fragmented. It should be ok, if you were planning on expanding the individual sections, otherwise I would recomend changing the layout. Also, the different header sizes look rather random and don't really help the structure as I think you intended - maybe use normal text in bold and italics instead of headers for the under points?

==Feedback 4 - Veronika Bankó==
(Sorry for not structuring the information, instead I will just write every tought one by one)
The abstract is good. About the whole article:
- I didn't get the point why this article is just about construction projects. What are the differences between them and other project?
- Try to be more specific. I do agree with the others, that you might wanted to cover too much but at the end you ended up with too much information. This might be why you have so much bullet-points --with out being bullet-points (it is hard to read them in this state)-- and so much headlines. I feel like there are a lot of information listed one by one but with just little specific examination on each elements and also, I can't really see the connection between the different headlines. So maybe if you don't want to narrow down the concept, maybe try to align them together so that the reader can understand the connections as well.
- I know you are going to put some examples and pictures in, just one good place could be at the certain social structures ”which ensure a smoother transition of information than others”.
- And also I liked your car example but since we are talking about construction,
- Probably you are going to fix the references, but just in case: You need to use the wiki reference structure (numbers with [] brackets)

Talk:Determining Measurement Methods in Earned Value Management

2019-02-26T17:09:47Z

Veronikabanko: /* Feedback 3 | Reviewer name: Durant Mangum */

==Feedback on Abstract:==

{|
|'''Text clarity & language'''|| The text is coherent.
|-
|'''Description of the tool/theory/concept'''|| Great, however try to make it more concise. Keep up the good work!
|-
|'''Article purpose explanation'''|| Well elaborated.
|-
|'''Relevance to curriculum '''|| Very relevant.
|-
|'''References'''|| Ensure to add references whenever necessary.
|}

==Feedback 1 | Reviewer name: ''Yulisa Gutierrez''==
===Question 1 · TEXT===
'''Quality of the summary:'''

Does the summary make the key focus, insights and/or contribution of the article clear?

What would you suggest to improve?

===Answer 1===
''I don't know if this helps, but whenever I was reading the summary/introduction, I had no idea what the article was a bout (due to ignorance), but once I read the introduction, I was able to comprehend the abstract a little better.''

===Question 2 · TEXT===
'''Structure and logic of the article:'''

Is the argument clear?

Is there a logical flow to the article?

Does one part build upon the other?

Is the article consistent in its argument and free of contradictions?

What would you suggest to improve?

===Answer 2===
''It was very interesting. Very well put together and thought through.''

===Question 3 · TEXT===
'''Grammar and style:'''

Is the writing free of grammatical and spelling errors?

Is the language precise without unnecessary fill words?

What would you suggest to improve?

===Answer 3===
''Grammar was good, but I will say to be careful with comma splices and run-on-sentences. I would also stray away from the words you, me, us, and use "ones"''

===Question 4 · TEXT===
'''Figures and tables:'''

Are figures and tables clear?

Do they summarize the key points of the article in a meaningful way?

What would you suggest to improve?

===Answer 4===
''Tables and figures were pretty straight forward. No further recommendations''

===Question 5 · TEXT===
'''Interest and relevance:'''

Is the article of high practical and / or academic relevance?

Is it made clear in the article why / how it is relevant?

What would you suggest to improve?

===Answer 5===
''This is a hard question to answer because I feel like it is a very elaborated article, but might stray away or confuse those who have no idea of the topic. So I guess it all depends on the target audience. But as this is a student assignment where you are you write an academic paper with strong arguments, it is very valid for you to assume previous exposure to the topic. Just something to think about... Maybe include more examples? ''

===Question 6 · TEXT===
'''Depth of treatment:'''

Is the article interesting for a practitioner or academic to read?

Does it make a significant contribution beyond a cursory web search?

What would you suggest to improve?

===Answer 6===
''Most of my recommendation was listed above.'

===Question 7 · TEXT===
'''Annotated bibliography:'''

Does the article properly cite and acknowledge previous work?

Does it briefly summarize the key references at the end of the article?

Is it based on empirical data instead of opinion?

What would you suggest to improve?

===Answer 7===
''No recommendations. Good as is.''

==Feedback 2 | Reviewer name: ''Durant Mangum''==
===Question 1 · TEXT===
'''Quality of the summary:'''

Does the summary make the key focus, insights and/or contribution of the article clear?

What would you suggest to improve?

===Answer 1===
''I think the abstract could be more direct. But it I do know what the article will cover.''

===Question 2 · TEXT===
'''Structure and logic of the article:'''

Is the argument clear?

Is there a logical flow to the article?

Does one part build upon the other?

Is the article consistent in its argument and free of contradictions?

What would you suggest to improve?

===Answer 2===
''The article was clear in the various tools that can be applied in project management in relation to EVM.''

===Question 3 · TEXT===
'''Grammar and style:'''

Is the writing free of grammatical and spelling errors?

Is the language precise without unnecessary fill words?

What would you suggest to improve?

===Answer 3===
''There are no major grammatical errors. Check your quotation marks though.''

===Question 4 · TEXT===
'''Figures and tables:'''

Are figures and tables clear?

Do they summarize the key points of the article in a meaningful way?

What would you suggest to improve?

===Answer 4===
''I liked the graphs a lot and I found them supportive of the text. ''

===Question 5 · TEXT===
'''Interest and relevance:'''

Is the article of high practical and / or academic relevance?

Is it made clear in the article why / how it is relevant?

What would you suggest to improve?

===Answer 5===
''Yes, it is of high practical importance, and how a project manager can use it in real life. ''

===Question 6 · TEXT===
'''Depth of treatment:'''

Is the article interesting for a practitioner or academic to read?

Does it make a significant contribution beyond a cursory web search?

What would you suggest to improve?

===Answer 6===
''The article is a nice conglomerate of a multitude of tools, so much better than a web search with tools all over the place. '

===Question 7 · TEXT===
'''Annotated bibliography:'''

Does the article properly cite and acknowledge previous work?

Does it briefly summarize the key references at the end of the article?

Is it based on empirical data instead of opinion?

What would you suggest to improve?

===Answer 7===
''N/A. but the user knows to put one in. .''

==comment by mercedes hachmann==

looks very finished, great that you put in diagrams for illustration. good narrative and structure, good introduction to the topic

Talk:Determining Measurement Methods in Earned Value Management

2019-02-26T17:09:36Z

Veronikabanko: /* Feedback 2 | Reviewer name: Sandro Pina */

==Feedback on Abstract:==

{|
|'''Text clarity & language'''|| The text is coherent.
|-
|'''Description of the tool/theory/concept'''|| Great, however try to make it more concise. Keep up the good work!
|-
|'''Article purpose explanation'''|| Well elaborated.
|-
|'''Relevance to curriculum '''|| Very relevant.
|-
|'''References'''|| Ensure to add references whenever necessary.
|}

==Feedback 1 | Reviewer name: ''Yulisa Gutierrez''==
===Question 1 · TEXT===
'''Quality of the summary:'''

Does the summary make the key focus, insights and/or contribution of the article clear?

What would you suggest to improve?

===Answer 1===
''I don't know if this helps, but whenever I was reading the summary/introduction, I had no idea what the article was a bout (due to ignorance), but once I read the introduction, I was able to comprehend the abstract a little better.''

===Question 2 · TEXT===
'''Structure and logic of the article:'''

Is the argument clear?

Is there a logical flow to the article?

Does one part build upon the other?

Is the article consistent in its argument and free of contradictions?

What would you suggest to improve?

===Answer 2===
''It was very interesting. Very well put together and thought through.''

===Question 3 · TEXT===
'''Grammar and style:'''

Is the writing free of grammatical and spelling errors?

Is the language precise without unnecessary fill words?

What would you suggest to improve?

===Answer 3===
''Grammar was good, but I will say to be careful with comma splices and run-on-sentences. I would also stray away from the words you, me, us, and use "ones"''

===Question 4 · TEXT===
'''Figures and tables:'''

Are figures and tables clear?

Do they summarize the key points of the article in a meaningful way?

What would you suggest to improve?

===Answer 4===
''Tables and figures were pretty straight forward. No further recommendations''

===Question 5 · TEXT===
'''Interest and relevance:'''

Is the article of high practical and / or academic relevance?

Is it made clear in the article why / how it is relevant?

What would you suggest to improve?

===Answer 5===
''This is a hard question to answer because I feel like it is a very elaborated article, but might stray away or confuse those who have no idea of the topic. So I guess it all depends on the target audience. But as this is a student assignment where you are you write an academic paper with strong arguments, it is very valid for you to assume previous exposure to the topic. Just something to think about... Maybe include more examples? ''

===Question 6 · TEXT===
'''Depth of treatment:'''

Is the article interesting for a practitioner or academic to read?

Does it make a significant contribution beyond a cursory web search?

What would you suggest to improve?

===Answer 6===
''Most of my recommendation was listed above.'

===Question 7 · TEXT===
'''Annotated bibliography:'''

Does the article properly cite and acknowledge previous work?

Does it briefly summarize the key references at the end of the article?

Is it based on empirical data instead of opinion?

What would you suggest to improve?

===Answer 7===
''No recommendations. Good as is.''

==Feedback 3 | Reviewer name: ''Durant Mangum''==
===Question 1 · TEXT===
'''Quality of the summary:'''

Does the summary make the key focus, insights and/or contribution of the article clear?

What would you suggest to improve?

===Answer 1===
''I think the abstract could be more direct. But it I do know what the article will cover.''

===Question 2 · TEXT===
'''Structure and logic of the article:'''

Is the argument clear?

Is there a logical flow to the article?

Does one part build upon the other?

Is the article consistent in its argument and free of contradictions?

What would you suggest to improve?

===Answer 2===
''The article was clear in the various tools that can be applied in project management in relation to EVM.''

===Question 3 · TEXT===
'''Grammar and style:'''

Is the writing free of grammatical and spelling errors?

Is the language precise without unnecessary fill words?

What would you suggest to improve?

===Answer 3===
''There are no major grammatical errors. Check your quotation marks though.''

===Question 4 · TEXT===
'''Figures and tables:'''

Are figures and tables clear?

Do they summarize the key points of the article in a meaningful way?

What would you suggest to improve?

===Answer 4===
''I liked the graphs a lot and I found them supportive of the text. ''

===Question 5 · TEXT===
'''Interest and relevance:'''

Is the article of high practical and / or academic relevance?

Is it made clear in the article why / how it is relevant?

What would you suggest to improve?

===Answer 5===
''Yes, it is of high practical importance, and how a project manager can use it in real life. ''

===Question 6 · TEXT===
'''Depth of treatment:'''

Is the article interesting for a practitioner or academic to read?

Does it make a significant contribution beyond a cursory web search?

What would you suggest to improve?

===Answer 6===
''The article is a nice conglomerate of a multitude of tools, so much better than a web search with tools all over the place. '

===Question 7 · TEXT===
'''Annotated bibliography:'''

Does the article properly cite and acknowledge previous work?

Does it briefly summarize the key references at the end of the article?

Is it based on empirical data instead of opinion?

What would you suggest to improve?

===Answer 7===
''N/A. but the user knows to put one in. .''

==comment by mercedes hachmann==

looks very finished, great that you put in diagrams for illustration. good narrative and structure, good introduction to the topic

Determining Measurement Methods in Earned Value Management

2019-02-26T16:37:54Z

Veronikabanko: /* Limitations */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''"an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action".''

==Annotated Bibliography==
undone yet

==References==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-24T11:37:27Z

Veronikabanko:

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
undone yet

==References==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-24T11:35:50Z

Veronikabanko: /* Fixed Formula */

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|400px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
undone yet

==References==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-24T11:34:56Z

Veronikabanko:

''Developed by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|550px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
undone yet

==References==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-24T11:30:04Z

Veronikabanko:

''Written by Veronika Zsuzsanna Bankó''

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|550px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
undone yet

==References==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-23T17:07:16Z

Veronikabanko: /* Annotated Bibliography */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|550px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
undone yet

==References==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-23T17:07:01Z

Veronikabanko: /* Annotated Bibliography */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.
[[File:CAP.png|670px|thumb|centre|'''Figure 1''': Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

[[File:WeightedMilestones.png|550px|thumb|right|'''Figure 2''': Milestones with Weighted Values Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

[[File:FixedFormula.png|550px|thumb|right|'''Figure 3''': Fixed Formula Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

[[File:PCE_WM.png|550px|thumb|right|'''Figure 4''': Combination of Percent Complete Estimates & Milestones Method example. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.
[[File:Strategy.png|550px|thumb|centre|'''Figure 5''': Strategy of Choosing Applicable Methods sample. inspired by PMI Practice Standard for EVM <ref name="PMIEVM"/>]]

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==

==References==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-23T17:06:30Z

Veronikabanko:

File:Strategy.png

2019-02-23T17:02:45Z

Veronikabanko: Strategy of Choosing Applicable Measurement Methods. inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

Strategy of Choosing Applicable Measurement Methods. inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

File:PCE WM.png

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Veronikabanko: Combination of Percent Complete Estimates & Milestones Example. inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

Combination of Percent Complete Estimates & Milestones Example. inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

File:FixedFormula.png

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Veronikabanko: Fixed Formula method example. inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

Fixed Formula method example. inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

File:WeightedMilestones.png

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Veronikabanko: Weighted Milestones measurement method example inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

Weighted Milestones measurement method example inspired by PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd

Determining Measurement Methods in Earned Value Management

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Veronikabanko: /* Control Account Plan (CAP) */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
[[File:CAP.png|670px|thumb|right|Figure 1: Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 5'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-23T16:18:17Z

Veronikabanko: /* Control Account Plan (CAP) */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
[[File:CAP.png|680px|thumb|right|Figure 1: Control Account Plan. inspired by Fleming et al. <ref name="Fleming"/>]]
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 5'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

==Table of Figures==

File:CAP.png

2019-02-23T16:09:37Z

Veronikabanko: Control Account Plan sample - inspired by Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.

Control Account Plan sample - inspired by Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.

Determining Measurement Methods in Earned Value Management

2019-02-23T00:12:56Z

Veronikabanko: /* Strategy of Choosing Applicable Methods */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called immeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 5'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-23T00:09:59Z

Veronikabanko: /* Combination of Percent Complete Estimates & Milestones */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined work package lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete which is equal to cumulative PV [%], cumulative PV [DKK], cumulative EV [%] and cumulative EV [DKK]). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called unmeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 5'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-22T23:37:41Z

Veronikabanko: /* Fixed Formula */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 25/75 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the necessary materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the work package, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 75% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 40% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the maximum of two measurement periods. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called unmeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 5'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-22T23:20:47Z

Veronikabanko:

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete Estimates, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighting method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighting approach in this method, the milestones have equal weight, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called unmeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 5''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 5'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-22T22:49:54Z

Veronikabanko: /* Annotated Bibliography */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighing approach in this method, the milestones have equal weigh, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called unmeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 6''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 6'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

==Table of Figures==

Determining Measurement Methods in Earned Value Management

2019-02-22T22:44:35Z

Veronikabanko: /* Strategy of Choosing Applicable Methods */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighing approach in this method, the milestones have equal weigh, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task is rather called unmeasurable, there are two methods, namely the apportioned effort and the level of effort which deliver appropriate measurement for those. '''Figure 6''' summarizes the reviewed methods with an extension of the mentioned ones in consideration of duration and characteristics.

'''Figure 6'''

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T22:36:48Z

Veronikabanko:

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. <ref name="Fleming"/>

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighing approach in this method, the milestones have equal weigh, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Outputs of the Measurement Process==
There is only one output of this decision process which is the updated Control Account Plan. The elements added to it according to the PMI EVM Standard <ref name="PMIEVM"/>:
* performance measurement methods,
* measurement periods and
* measurement units for each work package.

==Strategy of Choosing Applicable Methods==
All of the above discussed methods are applicable for work packages with tangible/measurable characteristics. If a work or task does not

==Limitations==
Earned Value Management is considered as an immense and exhaustive theory in the field of project management from which a relatively small part is the determination of performance measurement methods. Therefore, to truly understand and implement it into practice, a thorough knowledge is crucial. On top of that, the discussed part is meant to be in context, so it is connected with other previous and following steps. Hence it is not applicable to any project by itself because the creation of required inputs, the accurate usage of methods and the employment of outputs are not examined within the article.
In addition, to select the proper method for every work package, various aspects are needed to be taken into consideration <ref name="PMIEVM"/>:
* the duration and measurability of work,
* requirements,
* measurement units (hours or currency),
* risk,
* level of accuracy to measure (performance, schedule, cost).
If any of the previously mentioned aspect are missing, misunderstood, or miscalculated false outputs could rise through the process of measurement. Furthermore, according to Fleming et al. <ref name="Fleming"/>, ''„an incorrect choice of a performance measurement method can result in inaccurate status, and subsequently result in incorrect or ineffective management action”.''

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T22:04:38Z

Veronikabanko:

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]''

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. (Fleming et al. 91.pp.)

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighing approach in this method, the milestones have equal weigh, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK cumulative PV ''(PV3cum = BAC * 0,75)'', only 29.250 DKK is earned ''(EV3cum = BAC * 0,65)''. Similarly, at the point of fourth measurement, which is supposed to be the end of the project, the progress is on 90% which means that the work package has to be prolonged in order to reach the desired completion.

==Strategy of Choosing Applicable Methods==

==Outputs of the Measurement Process==

==Limitations==

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T21:57:39Z

Veronikabanko: /* Combination of Percent Complete Estimates & Milestones */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]''

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. (Fleming et al. 91.pp.)

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 4 weeks with 4 predefined milestones (one/week), and with a BAC of 45.000 DKK. Since there are no weighing approach in this method, the milestones have equal weigh, that is 1/4 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen, the earned cumulative percent complete for the first and second month are equal to the planned one, but from the third month such divergence appears. Compared to the planned cum. percent complete which is 75%, the actual progress is on 65%. It shows that the work package is delayed. In comparition with the 33.750 DKK ''(PV3cum = BAC / 4 * 3 = 33.750 [DKK])'' cumulative PV, only ... DKK is earned.

==Strategy of Choosing Applicable Methods==

==Outputs of the Measurement Process==

==Limitations==

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T21:48:40Z

Veronikabanko:

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]''

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.<ref name="PPT"/>

===Combination of Percent Complete Estimates & Milestones===
This method aims to substitute the deficiency of the percent complete method with the advantages of the weighted milestones method. Both methods has benefits and drawback: the percent complete estimation is easy to administer but subjective and the weighted milestones can give an accurate status about the project but takes a plenty of time to plan the actual milestones. The main idea regarding this new method is that the milestones are placed periodically as performance ‘gates’ within the long tasks. It limits the subjectivity of the percent complete estimates method, because one can estimate up to a fixed preset value for each milestone, it can not go beyond the fixed milestone until that milestone’s criteria has been satisfied. This method’s biggest advantage is that it finds the right balance between fast, easy, very precise and accurate estimations. (Fleming et al. 91.pp.)

'''Figure 4'''

In '''Figure 4''' the defined workpackage lasts for 5 weeks with 5 predefined milestones, one/week. Since there are no weighing approach in this method, the milestones have equal weigh, that is 1/5 of the total budget value. In this example only the cumulative values are calculated (cumulative percent complete and cumulative value for the PV and EV equally). As can be seen the earned cumulative percent complete for the first and second month are equal to the planned one, but from the thrid month such divergence appears. Compared to the planned c. percent complete which is 60%, the actual progress is on 70%.

==Strategy of Choosing Applicable Methods==

==Outputs of the Measurement Process==

==Limitations==

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T21:12:44Z

Veronikabanko: /* Percent Complete Estimates */

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]''

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method uses a completed percentage of the total budget value (budget at completion (BAC)) to define the already produced value (cumulative EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific status of the work package. The percent complete value can be determined either by the account manager or other accountable individuals. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>.

An example given for Combination of Percent Complete Estimates & Milestones in the following section intends to shed light on Percent Complete Estimates as well.

This method provides the user with flexibility because there are no milestones with the need to be adjusted to them. Comparing with the Weighted Milestones, a continuous report can be given about the current status of the project at any time.
All in all, it is the easiest method to administer, but on the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective because it depends on a personal and professional estimation. Likewise, in terms of customer satisfaction, subjectiveness and the lack of detailed planning might cause low acceptance. In order to avoid such a situation, control account managers are obliged to give their detailed assessment methodology to the customer.

===Combination of Percent Complete Estimates & Milestones===

==Strategy of Choosing Applicable Methods==

==Outputs of the Measurement Process==

==Limitations==

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T20:22:45Z

Veronikabanko:

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]''

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

This method applies a percent complete to the budget value to define the already produced value (EV) during the project. The completed work package is considered to be 100% and everything is compared to that value. During the reporting period it allows the manager to perform a periodic estimation of the percentage of the completed work, which means that at every time a snapshot would be taken of the project, there would always be a certain EV which can be assigned to the specific work package.

It is determined by the control account manager and used for the budget at completion (BAC) for a given activity to determine the current and cumulative EV. <ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>. This method provides the user with flexibility. Comparing with the weighted milestones, it can give a continuous report about the current status of the project at any time.
An example is given for Percent Complete Estimates together with the Combination of Percent Complete Estimates & Milestones.
All in all, it is the easiest method to administer. On the other hand, the disadvantage of percent complete lies in its flexibility. Every report and result is an estimation, unsubstantiated and subjective. It depends on a personal and professional estimation.

===Combination of Percent Complete Estimates & Milestones===

==Strategy of Choosing Applicable Methods==

==Outputs of the Measurement Process==

==Limitations==

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T19:46:28Z

Veronikabanko:

==Abstract==
Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform monitoring and controlling activities in project management. However, due to its complexity, it includes several topics and steps, i.e. organising project, assigning responsibility, developing schedule and so on. <ref name="PMI"> ''PMI PMBOK® Guide – Sixth Edition (2017)., Available at: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok'' </ref>

Overall, it is a very large topic to be discussed in a relatively short article, therefore this document first of all provides a brief description of the EVM technique. As it does not give a detailed insight into the EVM itself, it is highly recommended to be familiar with this management technique (precise information can be acquired about the EVM here: [[Earned Value Analysis]]). Then it aims to give a clear picture of one particular step from the whole process, namely the determination of different methods for measuring the project performance, and the selection strategy of choosing the most valuable and applicable one for the project. It itemizes the necessary inputs of the measurement and shows various outputs that could be gathered from the calculations. The main part of the article begins with the description of Control Account Plan, which is followed by several classes of work introduced, i.e. the discrete effort, the apportioned effort and the level of effort. In the class of discrete effort certain measurement methods (fixed formula, weighted milestone, percent complete, etc.) are presented in details involving their advantages and disadvantages. Each method is also illustrated with an example to show the elementary steps in practice.
Guidelines are provided in the end of the article, with which the ability to choose the best suited measurement technique for a particular project is given.

==Introduction to Earned Value Management==
In project management, one of the most important sessions is the process of monitoring and controlling projects. The project manager is responsible for tracking the project's progress and performance with the help of predefined methods in terms of time and costs spent, and to analyze the value of work performed, in order to find out whether the current state of the project corresponds to the original project management plan. The main benefit of this task is, besides the accomplished insight into the health of the project, the ability to make corrective and preventive steps towards the successful completion of the project. <ref name="PMIEVM"> ''PMI Practice Standard for Earned Value Management – Second Edition (2011)., Available at: https://www.pmi.org/pmbok-guide-standards/framework/earned-value-management-2nd '' </ref>

Earned Value Management (EVM) is one amongst the many types of techniques which can be used to perform these activities. EVM analysis with the usage of the predefined work scope, timeframe for performance of the work, resources and costs, etc. as inputs can be resulted in the so called “earned value”.<ref name="PMIEVM"/> Earned value (EV) is the variable that shows us the value of the work performed in a specific point of the time. It is then compared with the planned value (PV), that represents the initially planned schedule position, and the actual spent resources in order to show the current cost position.<ref name="Fleming"> ''Fleming, Q. and Koppelman, J. (2010). Earned value project management - Fourth Edition. Newtown Square, Pa.: Project Management Institute, Inc.'' </ref> The conclusion regarding the actual status of the project can be acquired after the comparison, which is a useful output for the management in order to determine the essential further modifications, such as corrective action plans. Furthermore, the forecast of expected project costs can be initially created and then updated. <ref name="PMIEVM"/> To be able to measure the performance through the project’s duration, specific measurement points are needed. These dedicated control points are included in the Control Account Plan (CAP).

==Control Account Plan (CAP)==
According to Fleming et al. (2010) <ref name="Fleming"/>, Control Account Plan is ''„the fundamental building block which forms the project’s measurement baseline”.'' It contains all the planned information which is needed in order to perform the monitoring process, that is to say the measurement of the actual status of work throughout the project. The necessary informations are, as listed by Fleming et al. (2010) <ref name="Fleming"/>:
* Statement of work: brief scope description
* Schedule: start and stop dates for each task
* Budget
* Responsible person
* Responsible department
* Type of effort
* Division into discrete work packages
* Method used to measure earned value (EV) performance

The CAP is created before the progress of determination of measurement methods, because apart this all of the above elements are necessary inputs of the determination process, described in the following section.

'''Figure 1'''

As can be seen in '''Figure 1''', a CAP consists of work packages, to which different EV methods, in other words earned value measurement methods, are assigned. Throughout the predefined timescale (in this example: 3 months), dedicated planned value control points are stated (example: one per month, but it could also be one per week). When the measurement takes place, the calculated earned value is compared with these points. It can also be acknowledged that each work package has different measurement methods assigned which raises some questions:
* What is the difference between these methods?
* How is one method assigned to a specific work package?
* How are the planned value control points calculated?
The ''Measurement Methods'' section strives to give a detailed answer to these concerns.

==Inputs of the Measurement Process ==
The PMI Practice Standard for Earned Value Management <ref name="PMIEVM"/> categorizes the inputs into the following list.
#'''Requirements documentation:''' They are all documentation containing requirements which are relevant to the actual phase of the project. They can be defined by the client, the project manager, the organization, or institutions (e.g. contract-, business-, performance-, and technical requirements, standards, etc.), moreover by the government (e.g. legal/regulatory requirements).
#'''Statement of Work:''' It contains the goals of the project, that has been defined by the procurer or the management. It is the description of the expected product(s) and/or service(s) and/or result(s) that will be the output in the end of the whole project process.
#'''Scope Baseline:''' This document is the baseline for measuring, managing, assessing and controlling project scope. It contains a particular version set of three approved project documents: work breakdown structure (WBS), WBS dictionary and Project Scope Statement. The WBS contains all the deliverables of the project. It is a breakdown of the whole work, that needs to be done, into specific work packages which are executable and manageable elements in terms of their cost and duration. <ref name="PMI"/>
#'''Integrated Master Schedule:''' It is a bilateral agreement between the organization and the contractor on what defines the event-driven program. It contains the key event accomplishments and the evaluation criteria in the development. It also provides sequential events and key decision points, generally meetings to assess program progress. All in all, it is a detailed time driven plan for program execution that helps to ensure the achievement of on-time delivery dates.
#'''Project Budget:''' It gives information about the time-based distribution of funds for the whole duration of the project.
The last two inputs, namely the integrated master schedule and the project budget are crucial in terms of creating the performance measurement baseline (PMB) which development starts through the process of determining and applying the proper performance methods for each work package. <ref name="PMIEVM"/>

==Measurement Methods==
As it was mentioned before, to be able to measure the performance throughout the project, predefined points in time with desired performance value, in other words planned value, are needed. These time-phased planned values are created with the help of a measurement method. Since every work package is unique regarding the resources, the tasks and the people involved, or its type of effort (recurring or non-recurring), it is unreasonable to apply one specific way of measuring the whole work completed. Depending on the nature of a work package, different methods are recommended to be used.
Although, there are several classes of work, i.e. the discrete effort, the apportioned effort and the level of effort which can be measured differently, this article only provides an insight into the measurement of the discrete effort class of work (the other methods can be found here: <ref name="PMIEVM"/>)

According to the PMI Earned Value Management Standard <ref name="PMIEVM"/>, discrete effort is an activity which can be planned and is convenient to measure because ''„is directly related to specific end products or services with distinct and measurable points”''. Several measurement methods are used to measure discrete effort, such as the Fixed Formula, the Milestones with Weighted Values, the Percent Complete, the Physical Measurement, the Equivalent completed units, the Earned Standards and so on. The type and actual phase of the project, the nature of the work package, and other circumstances determine the method to be used to best address the measurement process. In the following sections some methods are described in details and supplied with its advantages and disadvantages. Moreover, examples for each method are shown for a better understanding.

===Milestones with Weighted Values===
As is stated by Fleming et al. (2010) <ref name="Fleming"/>, the essential condition of this method is its usage for individual work packages which must exceed a short span in duration, but they are recommended to run over two, three or more performance periods to be able to define as many milestones as can represents the real state of the project. If the work package consists of only one milestone, then the appropriate method should be used is the Fixed Formula described later.

The defined milestones must be meaningful and properly distinct. During the planning of the milestones, in each performance period one or more milestones should be placed which are associated with an objective and verifiable accomplishment <ref name="PMIEVM"/>. Furthermore, there is a specific budget value assigned to each milestone which means that the total planned costs for the whole project is divided up between the several milestones in respect to their weight (see '''Figure 2''' as an example: the importance between the identified three milestones: %(1)<%(2)>%(3) and %(1)>%(3) and +3.=2. and , therefore the first gets 40%, the second 50%, while the third 10%). After the planning phase, the different budget values attached to the milestones and the milestones themselves should not be modified due to the traceable flow of the project.

'''Figure 2'''

'''Figure 2''' illustrates an example of this method. In this work package there are three milestones: A, B and C. Let's say that the mathematical relationship between them (It is important to note that this is just an example, this weighing method of milestones doesn't have any connection with reality!):
: ''%A < %B > %C;
: ''%A > %C;
: ''%A + %C = %B;
: ''%A = 4 * %C;
: ''%A + %B + %C = 100;

According to the relationships: A gets 40%, B gets 50%, while C gets 10%, which means that B is the most important milestone through the work package following with A and then C.

Furthermore, our total budget value (=budget at completition (BAC)) is 400.000 DKK, so the planned values (PV) can be calculated as:
: ''PVA = BAC * %A / 100 = 400.000 * 40 / 100 = 160.000 [DKK]
: ''PVB = BAC * %B / 100 = 400.000 * 50 / 100 = 200.000 [DKK]
: ''PVC = BAC * %C / 100 = 400.000 * 10 / 100 = 40.000 [DKK]''

The calculation of EV is not included since that is considered to be out of scope. See more details about EV calculations here: [[Earned Value Analysis]]

The method can only be used to measure performance during the project with a requirement of close working relationships between the work package manager, the scheduling people and the resource estimating function. Fleming et al. (2010) <ref name="Fleming"/> claims, that these close working relationships reinforce the adequacy and accuracy of the milestones planned.

Although it is a widely prefered method among project managers, a big disadvantage of this method can not be disregarded: its difficulty and inconvenience regarding the initial planning phase and its administration during the project. It is mainly on the grounds of the previously detailed reasons, that is to say the difficulty of planning of milestones, and the required close working relationships <ref name="Fleming"/>.

===Fixed Formula===
The fixed formula method is used for small but detailed work packages with short-duration. It sees the work package as a "one-session work" which has a starting and an ending point considered as two weighted milestones, but due to its type (mainly its duration), it does not have a milestone in between. This method can be divided further into several methods in accordance with the allocation of budget value between the two milestones, for instance the common 25/75, the 50/50, and the 0/100 method. In the case of the 0/100 method, 0% of the planned budget value is assigned to the start of the period while 100% is assigned to the finishing point. Besides, endless other methods can be defined which all must share the common condition that the summation of the percentages has to be 100% in total <ref name="Fleming"/>.

'''Figure 3'''

In order to provide a better understanding, a short example is demonstrated (see '''Figure 3'''). Let’s suppose that our project is the manufacturing of a table, and the 50/50 fixed formula method is used to track the performance of the manufacturing project. First of all, we order the needed materials for the table. When the wood has been ordered we already have the 25% of the planned value in the beginning of the project. The rest part of the project, the other 75% will be the arrival of materials, the grinding, roughing, surface finishing, assembly of the desk and so on, but this 50% will only be assigned to the project at that point when the work package has been done.

It drives us to a question that is, what happens if the project manager creates a snapshot of the overall project (containing lots of other work packages) when the progress of this work package is 30% (green line in '''Figure 3'''), and he/she would like to calculate the current EV for the snapshot? Since we haven't reached 100% of completion, he/she can only say that this project has 25% earned value, therefore the calculation will be inaccurate.

This is the reason why this method is recommended to be used for short-term work packages that are scheduled to start and completed in the same one or at the most two measurement period. The length of one period does not matter remarkably, it can be a week or a month as well.

However, this method can be quickly acquired, one considerable disadvantage is that this arbitrary percentage may not represents the actual status of performance because it lies on a relatively subjective decision. <ref name="PMIEVM"/>

===Percent Complete Estimates===

<ref name="PPT"> ''Hamilton, B. (2019). Earned Value Management Tutorial Module 5: EVMS Concepts and Methods., Energy.gov., Available at: https://www.energy.gov/sites/prod/files/2017/06/f35/EVMModule5_0.pdf [Accessed 17 Feb. 2019]'' </ref>

===Combination of Percent Complete Estimates, with Milestones===

==Strategy of Choosing Applicable Methods==

==Outputs of the Measurement Process==

==Limitations==

==Annotated Bibliography==
<references />

Determining Measurement Methods in Earned Value Management

2019-02-22T19:25:56Z

Veronikabanko:

Determining Measurement Methods in Earned Value Management

2019-02-22T18:51:15Z

Veronikabanko:

Determining Measurement Methods in Earned Value Management

2019-02-22T17:42:14Z

Veronikabanko:

Determining Measurement Methods in Earned Value Management

2019-02-22T17:39:04Z

Veronikabanko: /* Control Account Plan (CAP) */

Determining Measurement Methods in Earned Value Management

2019-02-22T17:34:14Z

Veronikabanko: /* Control Account Plan (CAP) */

Determining Measurement Methods in Earned Value Management

2019-02-22T17:27:40Z

Veronikabanko: /* Introduction to Earned Value Management */

Determining Measurement Methods in Earned Value Management

2019-02-22T17:22:28Z

Veronikabanko: /* Control Account Plan (CAP) */

Determining Measurement Methods in Earned Value Management

2019-02-22T17:22:10Z

Veronikabanko: /* Combination of Percent Complete Estimates, with Milestones */

Determining Measurement Methods in Earned Value Management

2019-02-22T17:21:58Z

Veronikabanko: /* Percent Complete Estimates */