Objective performance measurement techniques play a crucial role in deriving project transparency and early warnings.
Without use of such techniques:
(a) Projects are more likely to drift into the unknown from a time, cost, quality perspective and
(b) Projects driven businesses are at risk of sudden demise
Objective performance measurement techniques therefore have a much more fundamental role than incentivizing to maximise profitability.
Let me explain:
On my first point (a) above, Earned value management or EVM for short (used extensively by major defence companies) have been used for many years as an objective performance measurement technique and a management tool for aligning projects towards their target time, cost and quality parameters.
But EVM is not a “magic switch” where at a “push of a button” you extract objective performance related information and with another you manage the project.
EVM is an entire strategic, holistic, encompassing and comprehensive project management approach in its own right.
EVM can be categorised by a set of 25 Attributes based on the ANSI/EIA 748 requirements and the UK Association of Project Managers (APM) Guidelines.
The aim of each Attribute is to guide/enhance the development of a viable project organization.
How you set it up and how you apply EVM on projects will determine the success or otherwise of a project(s) in terms of its time, cost and quality parameters.
On my second point (b) above, business financial reporting must be driven by the project(s) true/real time underlying performance.
Failure to correlate financial results with true status of projects performance can lead to the business demise.
© 2015, Majed Bushnaq