10-step evm: implementation to insurance projects749226/fulltext01.pdf · 10 -step evm:...

DEGREE PROJECT, IN PROJECT MANAGEMENT AND OPERATIONAL DEVELOPMENT,

SECOND LEVEL

STOCKHOLM, SWEDEN 2014

10-Step Earned Value Management:

Implementation to Insurance Projects

Dias-Johnson Georgy, Frantzis Dionysios

KTH ROYAL INSTITUTE OF TECHNOLOGY

INDUSTRIAL ENGINEERING AND MANAGEMENT

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10-Step EVM: Implementation to Insurance Projects

Abstract

This master thesis explores and quantifies the advantages and disadvantages of using the 10-

Step EVM model compared to the forecasting methods applied at an international insurance

company. The illustration of the aforementioned advantages and disadvantages is intended to

entice the Company and possibly even other companies to consider replacing or

complementing their existing method(s) with the one the paper suggests thus improving the

effectiveness of their risk mitigation techniques and in extension their business model.

The aforementioned subject was approached by the application of the 10-Step EVM model to a

Company project the researchers participated in and the comparison of the model’s results to

those of the Company implemented counterpart. Observations resulting from the comparison

were analysed and discussed with the Company’s top management, by conducting interviews

and administering questionnaires. The drawn conclusions were then compared against and

supported by relevant academic literature and scientific articles on EVM theory.

Based on the outcomes of the research, it is argued that the 10-Step EVM method could

potentially be comparatively better than what the Company applied in the examined project

and that adopting EVM practices could prove valuable in better safeguarding the Company’s

business model against the element of risk and its repercussions. It should be mentioned that

the applicability of the research’s conclusions is limited to the specific company and project the

authors studied.

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Table of Contents

Chapter 1: Introduction ................................................................................................... 1-7

1.1 Introduction .......................................................................................................................... 1

1.2 Statement of the Problem ..................................................................................................... 3

1.3 Background and Need .......................................................................................................... 4

1.4 Purpose of the Study ............................................................................................................ 5

1.5 Research Questions ............................................................................................................. 6

1.6 Significance to the Field ....................................................................................................... 6

1.7 Limitations ............................................................................................................................ 7

Chapter 2: Methods ......................................................................................................... 8-10

2.1 Introduction ............................................................................................................................ 8

2.2 Setting ................................................................................................................................... 8

2.3 Sample/Participants ............................................................................................................... 9

2.4 Measurement Instruments ..................................................................................................... 9

2.5 Validity and Reliability ............................................................................................................ 9

2.6 Data Collection/Procedures ................................................................................................... 10

2.7 Data Analysis ......................................................................................................................... 10

Chapter 3: Review of Literature ..................................................................................... 11-24

3.1 Introduction .......................................................................................................................... 11

3.2 EVM Basic Concepts ............................................................................................................ 11

3.3 10-Step EVM model ............................................................................................................. 19

3.4 Conclusions/Implications ...................................................................................................... 23

3.5 Summary .............................................................................................................................. 23

Chapter 4: Company Case Study ................................................................................... 25-41

4.1 Introduction ............................................................................................................................ 25

4.2 10-Step EVM (Planning) ........................................................................................................ 25

4.3 10-Step EVM (Implementation) .............................................................................................. 31

4.4 Interviews & Questionnaires .................................................................................................. 36

Chapter 5: Analysis ......................................................................................................... 43-44

5.1 Introduction ............................................................................................................................ 43

5.2 Discussion ............................................................................................................................. 43

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5.3 Limitations ............................................................................................................................. 46

Chapter 6: Conclusion .................................................................................................... 47-48

6.1 Introduction ............................................................................................................................ 47

6.2 Conclusion ............................................................................................................................. 47

6.3 Recommendations for Future Research ................................................................................ 48

References ....................................................................................................................... 49-51

Reference List ............................................................................................................................ 49

Appendices ...................................................................................................................... 52-59

Appendix A ................................................................................................................................. 52

Appendix B ................................................................................................................................. 54

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List of Figures

Figure 1: Eurostat’s Real GDP Growth Rate – Volume between 2003 and 2013 ........................................... 1

Figure 2: PMI’s Percent of projects cancelled or delayed due to the economic conditions has increased

since Q4 2011 .................................................................................................................................................. 2

Figure 3: Antvik and Sjöholm’s The information gap ...................................................................................... 3

Figure 4: Antvik and Sjöholm’s The importance of the start of a project ....................................................... 4

Figure 5: Total Planned Value ......................................................................................................................... 13

Figure 6: Actual Cost ....................................................................................................................................... 14

Figure 7: Earned Value .................................................................................................................................... 15

Figure 8: Cost Variance ................................................................................................................................... 16

Figure 9: Schedule Variance ............................................................................................................................ 17

Figure 10: Total Cost and Total Duration according to trends (CPI, SPI) ........................................................ 18

Figure 11: 10-Step EVM steps ......................................................................................................................... 19

Figure 12: Antvik’s Earned Value Management in 10 basic steps .................................................................. 22

Figure 13: Vanoucke’s EVM metrics ............................................................................................................... 23

Figure 14: Block Model TM and regular graph .................................................................................................. 24

Figure 15: Project’s Scope, Work Breakdown Structure (WBS) ...................................................................... 25

Figure 16: Project’s Work Overview ............................................................................................................... 26

Figure 17: Project’s Organisational Breakdown Structure (OBS) .................................................................... 27

Figure 18: Project’s Responsibility Assignment Matrix (RAM) ....................................................................... 29

Figure 19: Project Overview ............................................................................................................................ 30

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Figure 20: Project Overview Chart .................................................................................................................. 30

Figure 21: Project Planned Value/Cost ........................................................................................................... 31

Figure 22: Project week 3 Planned Cost ......................................................................................................... 32

Figure 23: Project week 3 Actual Cost ............................................................................................................ 32

Figure 24: Project week 3 Earned Value ......................................................................................................... 33

Figure 25: Project week 3 Extra Cost/Time ..................................................................................................... 34

Figure 26: Project progression with current trends ........................................................................................ 35

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Chapter 1: Introduction


1.1 Introduction

Even though global economy continues its expansion it does so at a somewhat lethargic rate (UN, 2013).

According to Eurostat’s statistical data, the real Gross Domestic Product (GDP) growth rate of the

European Union has been fluctuating significantly during the last decade as shown in the graph below.

Figure 1: Eurostat’s Real GDP Growth Rate – Volume between 2003 and 2013

According to European Commission’s winter forecast for 2014, Europe is expected to continue its way

towards economic recovery, which began in the second quarter of 2013. It is stressed however that its

state is expected to remain enfeebled and unstable, as is common in cases where the recovery happens

after a major financial crisis (European Commission, 2014).

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It could be argued that contemporary economy’s ever changing and volatile nature makes business

activities even more challenging, especially when considering that every business endeavour involves

the element of risk (Antvik and Sjöholm, 2012: 95). In order to achieve financial gains one has to

eliminate or mitigate losses and maximize the potential for and magnitude of profit (Kaplan and Mikes,

2012). One could argue that such a task could prove more difficult if it is also affected by the additional

uncertainties resulting from a highly unpredictable economy.

According to the Project Management Institute (PMI) the number of organizations that adopt projects

and project management practices as a way of conducting business to improve their competitiveness in

the market is steadily increasing (PMI, 2013a). Furthermore the PMI estimates an increase in demand

for project management professionals between 2010 and 2020, which will lead to approximately 6.2

million jobs in 2020 (PMI, 2013a). Projects are unique endeavours (Cooper et al, 2005: 1) in the sense

that their deliverables are products and or services that have never been produced before (Heldman,

2011: 2) and like any other business endeavour they are subject to risk, especially early in their life-cycle

(PMI, 2013c: 40). It could therefore be argued that projects are comparatively even more exposed to risk

than traditional business endeavours.

A study conducted in 2011 by the PMI suggests that 36% of projects failed to meet their original goals

(PMI, 2012). Furthermore according to PMI research (2013b) project success rates are in decline since

2008 and less than two thirds of projects achieve their pre-set goals while about 17% utterly fail.

Figure 2: PMI’s Percent of projects cancelled or delayed due to the economic conditions has increased since Q4 2011 (2013b)

One could argue that failed projects are missed opportunities and the very likelihood of loss represents

money exposed to risk (PMI, 2013b). If one considers and combines those concepts with the increased

levels of uncertainty originating from contemporary economy’s erratic behaviour, it is easy to see that

high percentages of failure within a fast growing industry such as that of projects and project

management is an issue that requires attention.

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1.2 Statement of the Problem

The PMI (2013c: 3) defines a project as “a temporary endeavour undertaken to create a unique product,

service, or result”. Temporary means that the endeavour has a distinct starting point and end (Ibid: 3).

However the aforesaid characteristic does not extend to the project’s outputs (Ibid: 3). The unique

nature of a project’s outputs and processes means that they have at least some characteristics that are

not shared with any other venture (Ibid: 3). Projects are naturally risky endeavours (PMI, 2013c: 40),

mainly because of the unique and novel nature of their deliverables (Heldman, 2011: 2). If left

unattended risk could compromise the success of a project (Cooper et al, 2005: 2) especially early on in

its life-cycle, when the project is in its most vulnerable state (PMI, 2013c: 40) due to lack of information

(Antvik and Sjöholm, 2012: 93).

According to the International Organization for Standardization (ISO) 10006 standard (2003: 22), the

term risk is commonly used to indicate the negative aspects of uncertainty. The term uncertainty also

involves positive aspects known as opportunities (Ibid: 22), however for this thesis, emphasis will be

directed to the negative aspects of uncertainty which will henceforth be referred to simply as risk.

Project risk could be described as the difference between the desired amount of information in contrast

to the amount of information that is actually available at the moment when a choice has to be made

and or something has to be done during a project (Antvik and Sjöholm, 2012: 93). As shown in the graph

below, the gap between desired and available information decreases as the project progresses.

Figure 3: Antvik and Sjöholm’s The information gap (2012:94)

According to the PMI (2013b) quite a few projects do not meet their original goals and some of them

even completely fail. Apart from the obvious, project failure means that stakeholders suffer monetary

and market share losses and become less likely to fulfil their strategic goals, which could result in them

losing their competitive edge (PMI, 2013b).

Even though it could be argued that the process of monitoring a project and forecasting the

eventualities of the endeavour helps improve the probability of its success, it does not necessarily

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guarantee it. Furthermore conventional forecasting methods can sometimes prove insufficient in

providing an accurate representation of the project’s state which could in turn limit their results’

usefulness (Cooper et al, 2005: 256 - 257).

In summation the problem under research revolves around inefficient monitoring of a project which

could lead in project risk not being addressed in a timely manner (Antvik and Sjöholm, 2012: 133) which

in turn could result in compromising the achievement of the performing organisation’s strategic goals

(PMI, n.d.).

1.3 Background and Need

Managing project uncertainty by methodically identifying, analysing and assessing risk is an essential

element of maintaining control over the project and ensuring good results (Cooper et al, 2005: 2). The

earlier one addresses the possibility of risk in a project, the better the outcome will be (PMI, 2013c: 40)

because the ability to make adjustments is at its greatest, since the aforesaid adjustments can be

implemented at relatively low cost (Antvik and Sjöholm, 2012: 93). The relationship between the

possibility of influencing and cost of influencing as time progresses is shown in the graph below.

Figure 4: Antvik and Sjöholm’s The importance of the start of a project. (2012:94)

According to Chapman and Ward (2004: 621), a case study conducted at a major North Sea oil project,

where board approval was required for funding allocation to initiate operations, the implementation of

project risk management effectively safeguarded the endeavour from the misuse of various resources

and mitigated the risk of cost overruns by identifying possible eventualities and addressing them with

appropriate measures. Furthermore in seven case studies concerning IT projects operating in several

different industries, including government, energy, public utility, petrochemical and the food industry,

risk management practices contributed to most of the projects’ success (de Bakker, Boonstra and

Wortmann, 2012: 448). According to said projects’ various stakeholders and their opinion regarding

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their respective projects’ perceived success score, on a scale of 1 meaning “a big failure” to 7 meaning

“a big success”, five out of seven projects scored 6 (“a success”) or above (de Bakker, Boonstra and

Wortmann, 2012: 449).

It is unavoidable to completely eliminate the likelihood of loss for each and every business endeavour,

but one can take measures to reduce the impact of a probable loss by utilising various methods and

techniques (Antvik and Sjöholm, 2012: 95) which may help in forecasting certain possibilities in a timely

manner so that appropriate measures can be taken. Detecting a project’s budget and or schedule

deviations and irregularities in a timely manner could allow for measures to be taken in order to

enhance the probability of the endeavour’s success (Antvik and Sjöholm, 2012: 133), or even to

terminate the project when needed, in order to avert major losses and or to reassign resources to other

endeavours (PMI, n.d.).

On the topic of early project termination, there are two different case studies concerning Mitsubishi’s

380 car project and Saab’s 2000 aircraft project, where premature conclusion was the only viable option

due to both companies being unable to see a return on their investments (Havila, Medlin and Salmi,

2013: 93). Despite the wide ranged repercussions in both cases, the decision to terminate the projects

had a positive impact on the companies’ business model (Havila, Medlin and Salmi, 2013: 95). In the

case of Mitsubishi, its sales remained unaffected and their market share even increased (Ibid: 95) and in

Saab’s case, the company was able to contain the potential damage to its trustworthiness and even

saved itself a possible 11 billion loss (Ibid: 95).

When indications of project problems start to become apparent, it is important to instantly address

them and account for the likelihood of their occurrence (Nikander and Eloranta, 2001: 390). Despite the

multitude of methods for engaging problems however, the variability of circumstances does not always

allow for the application of a single solution in every case (Ibid: 390).

1.4 Purpose of Study

As more and more companies start conducting business in the form of projects in the volatile climate of

contemporary economy, they could become exposed to increased levels of project risk in addition to the

risk that business already involves. The most efficient way to address risk is not treating its

repercussions, but rather approaching situations with forethought and preparation, prior to risk

occurrence (GAO, 2009: 175), i.e. by forecasting. Without an efficient monitoring method there is no

dependable way of forecasting the future state of a project and therefore possible eventualities of loss

cannot be foreseen and addressed until it is already too late (Ibid: 175). The results could include, but

are not limited to monetary losses, schedule mishaps as well as damage to the company’s credibility.

Even though there are several different forecasting methods used by different companies, according to

the specific field that they operate in, said methods vary in complexity and application and are

sometimes specific to each company’s inner workings (Kerzner, 2009: 788-789).

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The purpose of this study was to produce new literature in the research area as well as to examine the

applicability of the 10-Step Earned Value Management (EVM) method and its possible benefits to a

global insurance company’s business model (which will henceforth be referred to as ‘the Company’) in

comparison with the already employed method.

In order to explore the applicability and possible benefits of the 10-Step EVM method, the authors

conducted research which took place at the Swedish branch of the Company from which all the

necessary information was received. Literature study was utilized in comparison with the obtained

Company information which was collected during the researchers’ participation in Company operations.

Said information was acquired, documented and refined with the help of interviews and questionnaires

that were answered by the Company’s top management. In addition 10-Step EVM was implemented to

a Company project and its results were compared against those of the Company-implemented method.

The thesis conclusions were reached by the scientific analysis and evaluation of the resulting qualitative

and quantitative data.

As a result of the 10-Step EVM method implementation, the Company was expected to witness the

benefits of the method and possibly consider replacing or complementing its existing method with the

one the paper suggests effectively improving the efficiency of its risk management techniques and in

extension its business model.

1.5 Research Questions

1. What are the effects of the 10-Step EVM method on the efficiency of risk management on the

project under research?

2. What are the main monitoring techniques implemented at the Company’s projects and how do

their risk management results compare to the ones of the 10-Step EVM?

1.6 Significance to the Field

One of the challenges of writing this research paper was the limited availability of relevant 10-Step EVM

literature. While there was a substantial amount of material covering EVM theory, the same did not

apply for the specific model under research. Therefore this paper effectively expanded the available

material which could aid future researchers who would endeavour to study the 10-Step EVM model.

The participants of this research enjoyed a number of short and long term benefits by conducting the

study. Namely the researchers witnessed the implementation of the 10-Step EVM method, beyond a

purely academic setting, in a real company and gained perspective regarding the method’s strengths,

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weaknesses, applicability and overall potential. In addition the authors of this report developed a degree

of understanding as it pertains to the insurance industry’s inner workings. Furthermore the Company’s

top management also witnessed the effects, advantages and disadvantages of the 10-Step EVM

method’s implementation and results. Moreover with this new information the possibility that the

Company might consider implementing the 10-Step EVM method, either alongside their current tools

and techniques or as a stand-alone methodology, could help improve its risk management efficiency and

business model. Finally a possible long term benefit of this research could be that other companies

might become enticed to adopt 10-Step EVM practices in the future.

1.7 Limitations

There were a number of factors that limited the conducted research as well as the applicability of its

findings.

1) Firstly the authors of this master thesis conducted their research according to KTH’s offered

time frame which was rather restrictive as it pertains to the amount of depth they could delve

into regarding the paper’s subject.

2) Secondly there was limited opportunity to quantify the possible long-term effects of 10-step

EVM implementation.

3) In addition the amount of literature on the 10-step EVM model is fairly limited and therefore the

study had to be based on what was available at the time of the authoring.

4) Furthermore the researchers’ access to Company information was not unlimited and in cases,

where sensitive information was involved that could possibly have made a difference in the

study’s outcome, said information was not possible to include.

5) Lastly the availability and or accessibility to Company employees were some additional factors

that affected the conducted research and possibly its results.

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Chapter 2: Methods

Chapter 2: Methods

2.1 Introduction

The ever-changing nature of contemporary economy renders project execution even more risky than it

originally is. In addition, conventional risk management techniques do not always provide an accurate

image of a project’s state and any probable project issues do not surface in a timely manner which

makes their resolution more challenging.

This master thesis aims to study the aforementioned issue by addressing the following research questions:

1. What are the effects of the 10-Step EVM method on the risk management efficiency on the project under research?

2. What are the main monitoring techniques implemented at the Company’s projects and how do their results compare to the ones of the 10-Step EVM?

This study revolves around the efficiency of the 10-Step EVM model in providing forecasts that could

contribute to and enhance the project risk managing effectiveness of the Company. The research was

conducted with a mix of qualitative and quantitative methods and techniques to evaluate 10-Step EVM

efficiency on a Company project that the researchers supported during their placement. Interviews and

questionnaires answered from industry experts were used to assess the 10-Step EVM method’s results

and compare them with the results of the Company-implemented counterparts.

2.2 Setting

The study took place at the offices of the Swedish branch of a global insurance company located in

central Stockholm. The Company’s personnel consisted of individuals, from a diverse cultural and

educational background, who the researchers closely cooperated with during their participation in the

Company project. The arranged meetings took place within the Company’s conference rooms which

were equipped with projectors as well as intercommunication systems. All interviews and

questionnaires were conducted on Company premises with locally placed Company personnel.

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Chapter 2: Methods

2.3 Sample/Participants

The sampling procedure used by the researchers was convenience sampling, i.e. the participants were

restricted to the individuals who were available and accessible at the time of the study. Participants of

this study included the Company’s head of business unit, sales, implementation and account managers.

The aforementioned individuals were selected because of their significant experience and professional

insights and knowledge within their respective areas of expertise which constitutes the validity and

accuracy of their feedback and opinions regarding the efficiency of the 10-Step EVM model.

2.4 Measurement Instruments

The researchers collected Company project information and utilised questionnaires and interviews to

complement and assess the acquired data. The purpose of conducting interviews and questionnaires

was to create records of industry experts’ opinions and professional insights to help evaluate the 10-

Step EVM method’s efficiency and possible benefits and provide answers for the research questions.

Questionnaire and interview forms as well as their answers were documented by using Microsoft Word

2010 which was installed on the two company provided Dell Latitude E6320 laptops, operating on

Microsoft Windows 7 Enterprise, 32-bit operating system. The interview questions and procedure as

well as questionnaire forms were common for all participants and were inspected by the university’s

appointed thesis supervisor. The supervisor was selected because of their extensive project and 10-Step

EVM experience which would allow for the assessment as it pertains to the precision of the questions as

well as the relevance of the answers they were intended to obtain.

2.5 Validity and Reliability

As far as validity (how well a test measures what it is intended to measure) and reliability (the degree to

which a test outputs repeatable and consistent results) are concerned there were a number of

challenges to overcome. Namely the conducting of interviews can be compromised by the element of

bias from both parties, i.e. interviewer and interviewee. It could be argued that one of the main reasons

for bias is that “interviewers are human beings and not machines” (Sellitz, 1962: 583). The researchers

endeavoured to address such issues by preparing prior to interviews in order to augment their

knowledge of the Company and situational context. In addition a sufficient amount of information was

provided to the interviewee to allow for educated assumptions and conclusions. Furthermore proper

interview etiquette was practiced, including but not limited to informing the participants regarding the

subject of the study, with respect to any and all confidentiality issues and using a neutral tone of voice

while avoiding leading questions. Moreover the researchers demonstrated active listening to make sure

the correct message was conveyed.

As far as the reliability of the questionnaires is concerned, the researchers practiced the test-retest

theorem, whereby the questionnaire was administered on more than one occasion so as to yield

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Chapter 2: Methods

repeatable results with minimum variation. The validity of the questionnaire was assured by the

formulation of questions that were directly relevant to the thesis’ emergent themes. Furthermore the

questions’ context revolved around the specific project that all the participants were familiar with to

help ensure a common understanding regarding the intended outputs without leading to any specific

answers. The answers’ validity is constituted by the participants’ extensive knowledge and experience

within their respective fields that gives credibility to their individual opinions

Finally by using both interviewing and questionnaires the researchers endeavoured to account for: a) the indirect component involved with questionnaires, and b) the likelihood that the researcher’s presence may introduce biased responses during interviews.

2.6 Data Collection/Procedures

The data were collected through observations, questionnaires and interviews. The researchers were

present at the Company’s offices daily during work hours, i.e. between 8:00 and 17:00 and were

assigned office space on Company premises to allow for instant accessibility to Company resources. The

total duration of the researcher’s placement within the Company was from March the 24th 2014 to June

the 2nd 2014. Company project information was provided in the form of computer files in various

formats including text documents, spreadsheet files and project files created by Microsoft’s Office 2010

Suite programmes. The researchers accessed said information by using Microsoft Word 2010, Microsoft

Excel 2010 and Microsoft Project 2003 respectively which the Company had installed on the previously

mentioned laptops that were made available to the researchers. Interviews were conducted individually

on Company premises, at the interviewee’s earliest convenience and their duration ranged from half an

hour to an hour according to the interviewee’s schedule and general availability. During the interview

the researchers asked their prepared questions and presented the 10-Step EVM method and its results

on the project under examination. The interviewees’ opinions and observations were documented by

one of the researchers while the other was asking the prepared questions. In the cases where Company

staff was unavailable for interviewing due to time constraints or geographical differences, only the

questionnaires were administered either in person or via e-mail respectively. Once the participants had

answered the questionnaires, the answered physical or digital copies were collected and their contents

were examined. In both cases the questionnaires were created using Microsoft Word 2010 and were

either printed or attached to e-mails.

2.7 Data Analysis

The collected data were documented and categorised according to the thesis’ research questions and

emergent themes. The interview and questionnaire forms’ content was matched to answer the two

research questions. Furthermore quotations were selected from the interviews that illustrated the

research’s themes. Moreover data from the questionnaires were compared against data from the

interviews for similarities and or differences.

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Chapter 3: Review of Literature


3.1 Introduction

Modern economy’s erratic behaviour creates a rather hostile environment for business endeavours due

to the increased levels of risk it involves. From all the types of business endeavours, projects are

arguably amongst the riskiest of ventures because of the unique methods that are utilised for the

achievement of their planned outcomes. Since the number of companies that are starting to adopt

projects and project management practices to conduct business is steadily increasing, modern

economy’s instability further increases the level of risk projects are exposed to. Therefore it is very

important to address the issue of increased risk, preferably even before its occurrence, by forecasting

and managing the eventualities of loss and or failure effectively safeguarding the stakeholders’ interest.

The literature review will be revolving around the 10-Step EVM model and the examination of its

strengths and weaknesses in providing accurate forecasts. Said forecasts could give the necessary

information required for timely decision-making which could safeguard the project from the element of

risk. The first section will explain the basic concepts of EVM and in the second section a detailed

explanation of the 10-Step EVM model will be provided. In the third section conclusions and implications

regarding 10-Step EVM will be discussed and finally a summary of the chapter’s main points will be

provided.

3.2 EVM Basic Concepts

As in most financial endeavours the role of early feedback plays a substantial role as it pertains to

decision making. It is also necessary for project success, since timely feedback can enable those in

positions of authority to make prompt decisions that can negate or mitigate the severity of loss (PMI,

2005: 1). If one takes a closer look at project management for instance, the project manager is

responsible for cost, schedule and scope.

Within project management the project manager is employed to bring a project to its fruition (PMI

2013c: 16), in order to complete this task the manager must ensure that the scope is completed within

the specific allotted time without exceeding the authorized budget (PMI, 2013c: 35). Thus the

aforementioned scope, schedule and cost are of utmost importance since they are the proverbial nuts

and bolts of project management (PMI 2013c: 217).

Earned Value Management (EVM) is a project management tool that assimilates the aforementioned

cost schedule and scope into a forecasting methodology in order to give an accurate and objective

measurement of the project while reducing the subjective and often misleading periodical progress

report (Henderson, 2007).

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The concept of EVM can be traced back to 1966 when the United States Air Force was implementing it

along with other tools and techniques to manage Air Force programmes (Humphreys & Associates,

2012). EVM is amongst the most effective methods for monitoring both the current and possible future

state of a project according to the original plan (PMI, 2005: 1). Monitoring the state of a project is a task

of paramount importance, because it allows for the timely identification of project issues and helps

protect the endeavour from cost and or time overruns (Ibid: 1). According to the PMI (2005: 2) the

efficiency of EVM is determined on whether or not a project is conducted according to “the principles of

good project management” and its effective application elucidates a timely warning of project issues

(Moslemi Naeni et al, 2013: 1).

The EVM methodology quantifies exactly where a project is proceeding in comparison to where it was

intended to go, thus it can be summarized by saying that EVM uses a project’s past history as a predictor

of a project’s eventual outcome (PMI, 2005: 1). Further EVM is a tool used within project management

which provides an overview of transpiring trends within a project i.e. cost, schedule planning and project

performance (EIA, 1998).

There are several questions that the methodology used within EVM can effectively answer which are

crucial to project success, such as:

• Are we ahead of or behind schedule?

• How efficiently are we using our time?

• When is the project likely to be completed?

• Are we currently under or over budget?

• How efficiently are we using our resources?

• What is the remaining work likely to cost?

• What is the entire project likely to cost?

• Cost of being under or over budget at the end?

(PMI, 2005: 1)

EVM can also help determine:

• Where problems are occurring

• If the problems are critical

• What it will take to get the project back on its feet

(Ibid: 1)

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EVM is reliant upon three key variables:

• Planned Value

• Earned Value

• Actual Cost

(Ibid: 1)

For the sake of clarification of the aforementioned key variables, an example will be used to highlight

their relative importance to the subject of EVM that the authors feel will be useful as a general key to

explain the EVM methodology. The example is adapted from Antvik’s (2013: 34) own ”Dig a ditch”

example which involves the excavation of a 1000 m3 ditch, in 10 days for a budget of 100.000 SEK (i.e.

100 SEK/m3).

Planned Value (PV)

Planned Value PV is a description of how far the project work is supposed to be at a specific point within

a project schedule, it is also the accredited budget for each report phase for each work module. Thus the

budget that is created is referred to as Planned Value or Budgeted Cost of Work Scheduled (BCWS). As

explained by the PMI (2013c: 218) “Planned Value (PV) is the authorized budget assigned to work to be

accomplished for an activity or WBS component”. Planned value is illustrated with the cumulative

resources as seen in the following figure:

Figure 5: Total Planned Value

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Actual Cost (AC)

Actual Cost (AC) is the actual incurred sum stemming from the accomplished work produced, which is

also sometimes referred to as Actual Cost of Work Performed (ACWP). The following figure shows the

actual cost incurred for project “Dig a ditch” after day 3, i.e. 25.000 SEK and it indicates that less money

than planned has been spent to achieve the accomplished work to date.

Figure 6: Actual Cost

Earned Value (EV)

Earned Value EV quantifies the amount or volume of work completed to date, and is commonly known

as the Budgeted Cost of Work Performed (BCWP). As explained by the PMI (Ibid: 218) “Earned Value

(EV) is the value of work performed expressed in terms of the approved budget assigned to that work for

an activity or WBS Component”. The figure on the next page shows the actual cost incurred for project

“Dig a ditch” after day 3 and it indicates that less work than what was previously planned has been

executed, outputting the accordant EV, i.e. 20.000 SEK.

15


Figure 7: Earned Value

Budget at completion (BAC)

It must be mentioned that some of the reviewed literature makes mention of the term Budget At

Completion (BAC) which incidentally refers to the total budget for the specified product, work package,

or activity. It is essentially the highest value of PV (Anbari, 2003: 13).

To summarize the preceding paragraphs:

Planned value (PV), in laymen terms is the allocated (budgeted) cost for the work that needs to be

completed.

Earned Value (EV) is the percentage of the budget that is actually complete to a specific chosen point in

time and is calculated by the multiplication of percentage of progress of an activity with the budget for

that activity.

Actual cost (AC) is the spent resources (money) for the work accomplished to date, which is known by

the acronym ACWP which stands for Actual Cost of Work Performed (Anbari, 2003: 13).

16


According to Philipson and Antvik (2012: 89) there are two different perspectives for EV calculations, i.e.

the efficiency (e) and the performance (p) perspective. While the efficiency perspective is more

commonly used, according to Philipson and Antvik (2012: 89) the performance perspective better

illustrates any increase in relative cost in a more direct manner (Ibid: 89). In the following paragraphs

the authors will present both methods, but with a heavy emphasis on the efficiency perspective.

The formulas for calculating variances and performance indexes with the use of EV are as follows:

Cost Variance: CVe = EV – AC, or CVp = AC – EV

Schedule Variance: SVe = EV – PV, or SVp = PV – EV

Cost Performance Index: CPIe = EV / AC, or CPIp = AC / EV

Schedule Performance Index: SPIe = EV / PV, or SPIp = PV / EV

Cost Variance (CVe = EV – AC, or CVp = AC – EV)

Cost variance is denoted as the difference between earned value and the verified actual cost. It is the

budget deficit at a specific chosen point. When the project has reached fruition it is the difference

between the budget at completion and the actual spent monetary assets (PMI 2013c: 217-219).

Figure 8: Cost Variance

17


Schedule Variance (SVe = EV – PV, or SVp = PV – EV)

Schedule variance pertains to the measurement of the actual schedule performance and it relates

directly to whether the project is ahead or behind the estimated delivery date (Ibid: 217-219).

Figure 9: Schedule Variance

Cost Performance Index (CPIe = EV / AC, or CPIp = AC / EV)

Cost performance index is the measurement of the cost-wise efficiency of the budgeted resources. It is a

highly important key EVM metric which measures cost efficiency for completed labour (Ibid: 217-219).

This in turn lends credence to CPI values. CPI values relate to either over-runs or under-runs for work

completed.

Schedule Performance Index (SPIe = EV / PV, or SPIp = PV / EV)

The schedule performance index is the overview of the efficiency of the schedule which elucidates just

how well time is being used by the project team (Ibid: 217-219). The optimum goal for the Schedule

Performance Index is to have a score higher than 1 since this score illustrates that the project is at the

very least adhering to the original schedule (Ibid: 217-219). In contrast, a less than 1 index score

illustrates that the project is heading towards an untoward outcome (Ibid: 217-219).

18


Figure 10: Total Cost and Total duration according to trends (CPI, SPI)

19


3.3 10-Step EVM model

The 10-Step EVM model is a streamlined narrative of a project from start to finish, intended to provide a

comprehensive description of the involved steps in rational succession (Antvik and Sjöholm, 2012: 43).

Generally speaking, the model could be broken down into two groups of steps, i.e. planning and

implementation (Ibid: 43). Specifically speaking there are six planning and four implementation steps.

The entirety of the model’s steps can be seen in the following figure:

Figure 11: 10-Step EVM steps

1. Objectives

The 10-Step EVM model begins with the setting of the project objectives (Antvik and Sjöholm, 2012: 44).

This is a very important step because it establishes what the project aims to achieve the timeframe

according to which it should be delivered as well as the assigned budget (Ibid: 44).

2. Scope (W.B.S.)

Once the objectives have been clearly established, the output or outputs of the project need to be

defined (Ibid: 44). Each one of those outputs is then broken down into components the entirety of

which constitutes the Work Breakdown Structure (WBS) (Ibid: 44). Those components are then further

broken down (Ibid: 44) into work packages, which is the lowest level of WBS module (PMI, 2006: 3).

20


3. Organisational Breakdown Structure

After the required project work is broken down into work packages, the next step is to determine the

individuals that are responsible for the work packages’ delivery (Antvik and Sjöholm, 2012: 44). This

assignment of organisational responsibility will result in the creation of an Organisational Breakdown

Structure (OBS), which shows the connection between project tasks and their respective performing

entities (PMI, 2013c: 548). According to Antvik (2013: 30) it is a common mistake that project planning

starts with this step. There are a lot of cases where the 6 planning steps are ignored altogether which

results in project failure (Ibid: 30).

4. Responsibility Assignment Matrix

The combination of WBS and OBS elements produces a Responsibility Assignment Matrix (RAM) which

illustrates how each work package of the WBS is assigned to a specific performing entity of the OBS

(Antvik and Sjöholm, 2012: 45). However it is not uncommon that some of the project work has already

been executed in order for the creation of the RAM to be possible (Ibid: 45). According to Antvik and

Sjöholm (2012: 45), the RAM is a valuable communication tool and helps in making sure that every

project activity is accounted for.

5. Schedule

Once the objectives of the project have been organised into a RAM and resource allocation has been

established, the time frame of the project, i.e. schedule can be created (Ibid: 45).

6. Budget

Based on the created schedule the project’s budget can be created (Ibid: 45) and monitored using the

established WBS which also serves as a base for the project’s financial planning. According to Antvik and

Sjöholm (2012: 46) each WBS component is assigned a budget which explains why WBS is considered

the infrastructure of the project’s financial monitoring and planning. The calculation of the budget

concludes the stage of planning (Antvik and Sjöholm, 2012: 43).

7. Actual Cost

The first step of the implementation stage is that of actual cost (Ibid: 43). Actual cost indicates the actual

amount of funds that have been assigned to the project (Ibid: 46). It differs from the budgeted cost in

that it shows the actual value of money that have been spent rather than the amount that was planned

and therefore the subtraction of the actual cost from the planned cost provides information about the

project’s monetary resource state (Antvik and Sjöholm, 2012: 46-47).

21


8. Achieved Performance

According to Antvik and Sjöholm (2012: 47), the achieved performance value provides information

pertaining to the technical result that has actually been performed. The difference between the planned

and achieved performance indicates whether or not the project is being executed in an efficient manner

(Ibid: 47). The regular monitoring of the project and the discovery of such irregularities early on is of

paramount importance for the effective resolution of project issues before their occurrence or

escalation (Ibid: 47).

9. Earned Value

Simply put earned value is an indication of whether or not one gets the full result of the resources

assigned to complete a certain task (APM, n.d.). In the context of a project earned value is the monetary

assessment of the achieved technical result and its comparison to the budgeted cost (Antvik and

Sjöholm, 2012: 47). Alternatively earned value could be described as the budgeted cost of the

performed technical result (Antvik and Sjöholm, 2012: 137).

10. Variance and Trends

During the final step of the implementation stage, cost and schedule variances and performance indexes

can be calculated based on the earned value, actual cost and planned cost (Antvik and Sjöholm, 2012:

47). The aforementioned variances and performance indexes are an indication of project performance

and can be used to forecast the project’s progress (Philipson and Antvik, 2012: 45-47).

Summary

A project’s performance can greatly vary for a multitude of reasons. The project could be behind or

ahead of schedule, exceeding or under-running its budget or any variation of those possibilities (Antvik

and Sjöholm: 47). According to Antvik (2013: 16) EVM allows for the “integrated control of technical

results, time and cost” and can be used by customers and suppliers alike (Antvik and Sjöholm, 2012: 48).

EVM comparatively shows:

– Project overview, from its very beginning

– Actual project state and the deviation from the original plan (if applicable)

– Forecasts all the way to project conclusion

– Estimates for cost and schedule at completion

(Antvik, 2013: 17)

22


Figure 12: Antvik’s Earned Value Management in 10 basic steps (2013: 18)

23


3.4 Conclusions/Implications

EVM is a tested highly efficient and relatively easy to implement method to monitor a project’s state

and predict its future based on past observations. The method’s timely detection of cost and or schedule

irregularities allows for prompt action to safeguard the project from the element of risk. The 10-Step

EVM model boosts EVM’s effectiveness even more with the addition of six planning steps that ensure all

necessary actions have been taken prior to EVM implementation, further mitigating the probability of

project failure. Therefore it could be argued that the 10-Step EVM model is a highly efficient monitoring

and forecasting technique that could be implemented in any endeavour, effectively mitigating project

risk, provided that the right preparations have been made.

3.5 Summary

To summarize EVM is a methodology that quantifies where exactly the project is in relation to where it

is supposed to be. The methodology uses performance indices as a means to elucidate a project’s past

history as a predictor of its eventual outcome. The 10-Step EVM model adds six planning steps prior to

EVM implementation and according to Antvik and Sjöholm (2012: 20) completing these steps greatly

augments the possibility for project success. Further the planning steps are highly important and as such

all information should be gathered in its entirety before proceeding to the implementation steps (Ibid:

20). All the metrics necessary to conduct EVM are shown in the following figure.

Figure 13: Vahoucke’s EVM metrics (2008)

24


At this point it should be mentioned that Philipson suggest an alternative pictorial representation of

EVM known as Philipson’s EVM Block Model TM (Philipson and Antvik, 2012: 34) which the authors will be

using to illustrate some of the research’s results in the following sections. The difference between an

EVM graphical representation with and without Philipson’s Block Model TM can be seen in the following

figure.

Figure 14: Block Model

TM and regular graph

25

Chapter 4: Company Case Study


4.1 Introduction

The project under examination was focused on the delivery of a new sales framework, the purpose of

which was to facilitate the sales process for a number of the Company’s insurance products. The total

budget of the endeavour was initially 180.000,00 SEK and the total duration was estimated to be nine

weeks in length beginning on the 24th of March 2014 and ending no later than May the 23rd of the same

year.

The next sections of this chapter will break down the project into the ten steps of the 10-Step EVM

model beginning with the first six steps, i.e. planning steps and continuing with the four implementation

steps before proceeding to the method’s results as well as the Company top management’s input,

observations and assessments.

4.2 10-Step EVM (Planning)

Objectives and Scope (WBS): The project’s main objective was the delivery of the sales framework that

was mentioned in the introduction, which involved the creation of templates and forms that were

intended to facilitate the Company’s sales representatives in conducting a sale as well as the necessary

follow up procedures. The deliverables could be broken down in the subcomponents shown in the Work

Breakdown Structure (WBS) below.

Figure 15: Project’s Scope, Work Breakdown Structure (WBS)

Sales Framework

Approach

Phase

Implement

Phase

Maintain

Phase

Research

Sub-Phase

Probe

Sub-Phase

Offer

Sub-Phase

Systems

Sub-Phase

Prepare

Sub-Phase

Apply

Sub-Phase

Contact

Sub-Phase

Monitor

Sub-Phase

Improve

Sub-Phase

26


As can be seen in the previous figure the project’s scope was broken down in three main phases:

Approach

Implement

Maintain

The first phase, i.e. the Approach Phase pertained to the initial contact with the customer and the

phase’s deliverables involved creating templates that would guide the sales representative through the

process of approaching a customer, ensuring their interest in a particular insurance product and finally

securing an agreement that the customer would buy or commit to buy said product in the near future.

The second phase, i.e. Implement Phase involved the creation of the necessary implementation plans

from preliminary and high level, to specific and detailed plans that would dictate how the secured sale

from the Approach Phase would proceed from a concept to its actual application as well as the

procedures that would support that application.

The final phase, i.e. Maintain Phase revolved around the creation of templates and procedures that

would support the after-sales service. Deliverables included, but were not limited to: customer contact

procedures, claims handling systems, event reporting systems etc.

Initially the researchers set a time frame for the duration of which they would conduct a mock sales

process through all its phases (from Approach and Implement to Maintain) by meeting the accordant

stakeholders asking appropriate questions and seeking guidance while documenting the feedback and

finally refining the acquired information before using it to create the guides and templates for each

phase. A summary of the procedure can be seen in the figure below.

Figure 1: Overview Chart

Figure 16: Project’s Work Overview

Week 1 - 3 Week 3 - 6 Week 6 - 9

Approach Phase Implement Phase Maintain Phase

Sales Mgr. BU &Impl.Mgr. BU & Sales Mgr.

Mock Sales Process

Meeting Document Refine Meeting Document Refine Meeting Document Refine

24/Mar – 11/Apr 14/Apr – 02/May 05/May – 23/May

Work

Overview

27


After creating all the necessary deliverables the sales framework would be delivered to the sales

department where the sales representatives would be briefed regarding the framework’s inner workings

and a testing period would follow. However that process was outside the scope of the project the

researchers participated in.

OBS: Generally speaking the project involved the participation of several individuals from different

departments including but not limited to: Head of Business Unit, Sales Manager, Implementation

Manager and Account Manager. The researchers were supporting the process as consultants while

working under the managers of different departments. An overview of the organisational structure can

be seen in the following Organisational Breakdown Structure (OBS) graph.

Figure 17: Project’s Organisational Breakdown Structure (OBS)

Project Sponsor

Steering

Committee

Head of

Business Unit

Sales Manager

Account Manager

Implementation

Manager

Consultant

Consultant

28


According to the Company’s records, the various stakeholders’ roles and responsibilities were as follows:

Project Sponsor

1. Responsible for the success or failure of the project

2. Directs the project in line with business strategies

3. Chairs the steering group

4. Monitors and resolves business risks and issues

5. Scope Management – delivers the agreed benefits/deliverables

6. Monitors and briefs senior stakeholders on the project progress

7. Gains support for project from business senior management

8. Assesses the impact potential changes on the business case and project plan

9. Authorises expenditure of budget and any contingency spending

10. Authorises changes to business process

Head of Business Unit

1. Primary responsibility for communication to Business and IT leadership

2. Works directly with Implementation Manager, and others as necessary, during the project’s life

cycle

3. Reviews project change requests

4. Monitors and reports progress to the Steering Group

5. Handles requests for senior management decisions

Implementation Manager

1. Responsible for the planning and management of the project within IT

2. Management of project risks and issues as well as escalation to appropriate parties

3. Promotes and maintains focus on the specified project outcome

4. Briefs and seeks advice from appropriate IT parties on matters concerning the project

5. Manages vendor delivery progress as well as risks and issues

6. Is responsible for managing the processes, planning and delivering the products of the project,

on time and within budget

7. Adheres to the project approach

RAM: The combination of the WBS and OBS information helped create the Responsibility Assignment

Matrix (RAM) which can be found on the following page.

29


Sales Framework

Approach

Phase

Implement

Phase

Maintain

Phase

Research

Sub-Phase

Probe

Sub-Phase

Offer

Sub-Phase

Systems

Sub-Phase

Prepare

Sub-Phase

Apply

Sub-Phase

Contact

Sub-Phase

Monitor

Sub-Phase

Improve

Sub-Phase

Pro

ject S

po

nso

r

Ste

erin

g

Co

mm

itte

e

He

ad

of

Bu

sin

ess U

nit

Sa

les M

an

ag

er

Acco

un

t M

an

ag

er

Imp

lem

en

tatio

n

Ma

na

ge

r

Co

nsu

lta

nt

Co

nsu

lta

nt

Figure 18: Project’s Responsibility Assignment Matrix (RAM)

30


Budget and Duration: An overview of the project’s budget and schedule information can be seen in the

following table:

Project Overview

P

lan

ned

From To

Total Schedule 24-03-14 23-May-14

Duration: 60 *Days

(Approx.) 9 weeks

Total Cost SEK 180,000.00

Figure 19: Project Overview

Based on the collected information the status and possible progression of the project can be examined

using Philipson’s EVM Block Model TM.

Figure 20: Project Overview Chart

Each block in the above chart represents either a phase or a sub-phase of the project under

examination. Each sub-phase block is planned to take one week to produce at a cost of approximately

20.000,00 SEK. During the next section the researchers will apply the 10-Step EVM method to forecast

the project’s probable outcome based on that information.

31


4.3 10-Step EVM (Implementation)

After completing the six planning steps, there is sufficient information to create the metrics that are

necessary to proceed to the four implementation steps and the conducting of EVM.

The process will begin by examining the recorded progress of the project on a specific date. According to

that specific date’s recorded actual cost and achieved technical result, the earned value will be

calculated. Once the earned value is known the process will proceed with the calculation of the cost and

schedule variances and performance indexes with the help of which the possible future status of the

project can be forecasted. All calculations will be done from the efficiency perspective.

Based on the information that was collected during the planning steps of the method, the process can

proceed with the calculation of the necessary values to create its forecasts. Based on the data the nine

sub-phase blocks are supposed to cost 180.000,00 SEK and take nine weeks to complete. A vertical line

is entered in the chart to illustrate the aforementioned information.

Figure 21: Project Planned Value/Cost

According to the available data by the end of the third week, three sub-phase blocks of work should

have been completed at a cost of 60.000,00 SEK and therefore, the Planned Cost (PC or PV) at that point

in time is:

PV= 60.000,00 SEK

32


Figure 22: Project week 3 Planned Cost

Despite the originally planned value for the cost the Company data indicates that the money that has

been spent as of April the 11th of 2014 is actually 62.000,00 SEK. Therefore the Actual Cost (AC) is:

AC= 62.000,00 SEK

Figure 23: Project week 3 Actual Cost

33


Furthermore the achieved technical result was only two sub-phase blocks of work, instead of the three

that were originally planned. The planned value for each block involves a cost of 20.000,00 SEK and a

duration of one week to produce and therefore the Earned Value (EV) is:

EV = 40.000,00 SEK

Figure 24: Project week 3 Earned Value

Now that the Planned Cost, Actual Cost and Earned Value are known, the process can proceed with the

necessary calculations to determine the state of the project:

Cost and Schedule Variance (efficiency perspective)

CVe = EV - AC = 40.000,00 - 62.000,00 = – 22.000,00 SEK

SVe = EV - PV = 40.000,00 - 60.000,00 = – 20.000,00 SEK

According to the above values the project is performing 22.000,00 SEK less in terms of cost as well as

20.000,00 SEK less in terms of time.

34


For another indication regarding the project’s state namely its performance, the following calculations

have to be made:

Cost and Schedule Performance Index (efficiency perspective)

CPIe = EV/AC = 40.000,00 / 62.000,00 = 0,64 or 64%

SPIe = EV/PV = 40.000,00 / 60.000,00 = 0,66 or 66%

According to the above values the project is performing at only 64% efficiency in terms of cost

performance and 66% in terms of schedule performance. The aforementioned effects on the project can

be seen in the following chart:

Figure 25: Project week 3 Extra Cost/Time

According to the EVM calculations the project is overrunning on both cost and time. To see how the

project will progress according to the current trends some additional calculations have to be made:

Total Cost and Schedule on current trends (efficiency perspective)

Total Cost = Total Planned Cost / CPIe = 180.000,00 / 0,64 = 281.250,00 SEK

Total Duration = Total Planned Duration / SPIe = 9 / 0,66 = 13,6 weeks

35


According to the above calculations, if the project work continues to be executed in the same manner it will ultimately cost 281.250,00 SEK, or

approximately 156,2% of its originally planned cost and it will take an additional four and a half weeks (approximately) to execute. The project’s

forecasted extra cost and additional duration can be seen in the graph below:

Figure 26: Project progression with current trends

36


4.4 Interviews & Questionnaires

This part of the Interview & Questionnaires section covers the interview results. Interviews were

conducted on Company premises with the Company’s Implementation Manager and Head of Business

Unit. The interview protocol form that was used to conduct the interview and collect information can be

found under Appendix B in the Appendices chapter. This section will be structured according to the three

main questions the interview revolved around.

How does the Company usually monitor their projects and how do they manage risk?

Implementation Manager:

The Implementation Manager informed the researchers that the Company has no unified system in

place for monitoring and managing risk. She also stated that the case-by-case chosen method depends

on who is on the project team and that usually there is no project manager and project coordination is

done by each project’s business owner. However she explained that smaller mostly IT projects within

the Company do have a unified method for monitoring and managing project risk. When asked about

the benefits of using several different methods for monitoring and managing risk she suggested that this

approach allows for increased flexibility, but it sometimes comes at the expense of inefficient cost and

schedule tracking. She continued that this involves a lot of ‘surprises’ which usually leads to frustration.

Head of Business Unit:

The Head of Business Unit stated that there is no one method the company uses to monitor their

projects and manage risk. He informed the researchers that the chosen method depends on both the

project and the people involved, but usually for big projects a project manager is assigned, then a high

level scope is created and all that information is collected in a project charter and or a project plan. He

then added that “not all people have the same definition for the word project“ and that despite its size,

the Company follows what he described as a “small business mentality”. He explained that the various

stakeholders generally “drop by each other’s offices” and only in a few cases weekly meetings are

arranged for project tracking purposes. As far as risk monitoring is concerned he said that the Company

uses heat charts to track and evaluate risk. When asked about the described method’s pros and cons he

said that it is mostly effective, mainly because of its flexibility. He then stressed how important flexibility

is when the Company is dealing with a new customer and or product. As far as the cons of the

Company’s method are concerned, he commented that tracking ability can sometimes be limited. He

continued by saying that not all project members follow the set structure and that makes it difficult to

set a project plan, which sometimes leads to frustration. He then suggested that project maturity differs

from company to company and that the Company’s nature of business heavily depends on human

interaction, “it is a people business”.

37


What do you think about the 10-Step EVM model?


The Implementation Manager suggested that the model is structured and it seems to give an easy and

comprehensive overview of project progress. She also stated that it seems efficient as a communication

tool and added that it is good to have a unified system for managing risk. However she did express some

scepticism about the 10-Step EVM. She commented that “it is one of the many methods out there” and

added that “companies are usually set in their own ways” and that the implementation of a new model

is always a daunting task because it requires time and resources to properly implement. When asked

about the model’s applicability to Company projects she said that it could be a big advantage to have

one unified method for all projects. However she commented that it is not always necessary to

excessively plan if the project is “too easy”.


When commenting on the 10-Step EVM’s strengths, the Head of Business Unit stated that he likes its

structure, transparency and financial orientation as well as the comprehensive overview it provides. He

also said that the detailed and rigorous activity planning it requires could be helpful in challenging

stakeholders to move beyond high level. When asked about the method’s weaknesses he expressed

some doubt as it pertains to the model’s applicability. He supported that statement by saying that not

all information is available at all times and that “the 10-Step EVM seems to lack the necessary agility to

deal with the occasionally not fully known scope”. He also commented on the model’s quantitative

rather than qualitative orientation suggesting that the 10-Step EVM could be beneficial when it comes

to challenging stakeholders in being more specific, but its excessive planning and monitoring could make

some individuals feel uncomfortable, because “the culture of doing a project is not well received by all

stakeholders”. He continued by saying that the 10-Step EVM does not seem to be as customer-centric as

what the Company uses, which can be too customer-centric at times. He summarised his opinion in the

following statement: “Sometimes you don’t need a sledgehammer to drive a nail. A common hammer

will do. 10-Step EVM might be too sophisticated compared to what is actually required.”

38


How does the 10-Step EVM model approach compare to the monitoring and risk management

methods you would normally use for the Sales Framework project at the Company?


When asked about 10-Step EVM implementation on the specific project under research, the

Implementation Manager stated that the 10-Step EVM information would make no difference in the

project’s decision making process and that the method would not be efficient. She justified that

statement by arguing that the Sales Framework project and its success depended heavily on the

delivered result, while cost and time were not of as high priority since the project was internal and

therefore easier to control. She then described the project as “unconventional” and added that 10-Step

EVM implementation might have even compromised project success because it would have shifted

focus to the EVM metrics rather than what was really important for the endeavour, i.e. the consultant’s

performance and delivered result. She then added that for the aforementioned reasons, the weekly

progress meetings that were used to monitor the project and manage risk were comparatively more

effective. She concluded by saying that “in a more conventional project, it could be different”.


The Head of Business Unit was positive that the 10-Step EVM was unsuitable for the Sales Framework

project. Even though it did offer more information the quality of said information did not necessarily

help the project’s risk managing efficiency. He was not certain as to if the model adds value and stated

that “maybe it would be an improvement, but I am unsure”. Despite his previous statement he did

believe that the model could be helpful in decision making because as he stated “we are a cost-driven

organisation”. However he continued by saying that the model does not give “the full picture”. Even

though it covers the performance and time perspectives, it does not show the potential benefit of a

schedule and or cost over-run. He added that the model seems to be heavily based on a pre-set activity

plan, but said plan rarely (if ever) stays unchanged until the end. Therefore the model seems to be based

on something that is usually inaccurate. When asked about his perceived effect of 10-Step EVM

implementation on the project’s success he said that “the project is a success, but I am unsure as to if

the 10-Step EVM played a part”.

39


The next part of the Interview & Questionnaires section covers the questionnaire results and it is

structured according to the administered questionnaire which can be found on the Appendices chapter,

under Appendix A. The administered questionnaire includes seven main questions and five sub-question

adding up to twelve questions in total. The questionnaire’s participants included the Sponsor, Head of

Business Unit, Implementation Manager and Sales Manager. Each participant’s anonymous answer will

be provided under each respective question.

Q.1: Given only the pre-EV information, i.e. Actual Cost (AC) to date and achieved performance to date how would you proceed?

Participant A: We use our “own” Excel-spreadsheet for planning & estimating, which requires some manual processing for assessing the status. Follow-up is conducted continuously and is handled via project meetings. As for delays/cost over-runs and their causes they are addressed by individual discussion.

Participant B: I would increase the pace of the work and set up a new timetable/schedule. Furthermore, I would monitor the cost incurred during the “project”.

Participant C: - Verbal update, including timetables to deliver - Budget tracking - Escalation of issues

Participant D: Normal project proceedings/process

Q.2: How effective do you believe your suggested method would be in safeguarding the endeavour from the element of risk, on a scale of 1 (Not at all effective) to 10 (Completely effective)?

Participant A: 7/10

Participant B: 6/10

Participant C: 8/10

Participant D 8/10

40


Q.3: Given the entirety of the 10-Step EVM information, would you proceed differently?

Q.3.1: If ( Y ), how? (*Please respond with a short answer) Q.3.2: If ( N ), Why not? (*Please respond with a short answer)

Participant A: ( Y )

I could more easily see if there were over-runs in the budget modules. Otherwise no difference.

Participant B: ( N )

It’s always good to have the whole picture, but I would act the same way. However it depends on how high the “AC” really is. If it was too high, I would terminate the project.

Participant C: ( Y ) More specific activity level planning

Participant D: ( Y )

Would use it in CBA’s, pre-studies etc. Try to monitor and evaluate projects.

Q.4: Do you believe that the 10-Step EVM approach would have been comparatively more/less effective in safeguarding the endeavour from the element of risk?

Q.4.1: If so, how much more/less effective on a scale of 1 (Not at all effective) to 10 (Significantly more effective)?

Participant A: (More effective) 7/10

Participant B: (More effective) 8/10

Participant C: (More effective) 9/10

Participant D: (Less effective) 5/10

41


Q.5: Do you believe that the 10-Step EVM could improve the Company’s business model?


Participant B: ( Y )

Participant C: ( N )


Q.6: Would you consider implementing 10-Step EVM practices in Company projects?

Q.6.1: If ( Y ), in what manner? (*Please respond with a short answer)

Q.6.1: If ( N ), why not? (*Please respond with a short answer)


For joint monitoring of all projects. Increased effectiveness since it requires less manual processing.

Participant B: ( Y )

For implementation in insurance programmes, from an account management and IT/development perspective.

Participant C: ( N ) The Company does not have control of all the project variables at times


Where applicable.

42


Q.7: Anything you would like to add?

Participant A: It’s always hard to “actually and properly implement” a new model. Which parts should one use? Which ones add value? It must be simple!

Participant B: - N/A -

Participant C: - N/A -

Participant D: - N/A -

43

Chapter 5: Analysis

Chapter 5: Analysis

5.1 Introduction

Project management is a fast growing industry and like any other business venture it is exposed to the

element of risk, arguably more so than traditional endeavours because its results i.e. projects are novel

in nature. If one takes into account the ever-changing nature of modern economy and how its

fluctuations greatly increase uncertainty, it is easy to appreciate the importance of taking appropriate

measures i.e. risk managing techniques to safeguard a business endeavour from risk’s repercussions.

Various case studies suggest that methodical risk management greatly contributes to improving the

likelihood of project success. Furthermore it could be argued that the effects of risk management are

most potent before risk occurrence and therefore monitoring and forecasting methods are arguably the

most effective approach to safeguarding a project. This master thesis mainly revolves around the highly

efficient 10-Step EVM model.

The aforementioned model was applied in a project of a global insurance company and its results were

evaluated and compared against the Company standard methodology with the help of questionnaires

and interviews with industry experts. All observations results and conclusions are supported by relevant

scientific articles and literature on EVM theory.

5.2 Discussion

This section will be structured in two main parts according to the two questions the researchers aim to

answer with this master thesis.



All of the participants ranked the perceived effectiveness of the model five or above (i.e. at least as

effective as their suggested method) in the questionnaire forms and three out of four participants stated

that their ability to manage risk on the Sales Framework project based on the 10-Step EVM information

would have been comparatively greater with rather than without the model’s results. Furthermore

three out of four participants suggested that they would have proceeded differently given the entirety

of the 10-Step EVM information, which would suggest that the model provided them with additional

and or different data than they would normally have. In addition the one participant who responded

negatively, based his trepidation on that the AC value would not have been too high, which would in

44

Chapter 5: Analysis

turn suggest that they would not be completely negative to following a different course of action based

on the 10-Step EVM metrics.

However during the interviews both the Implementation Manager and Head of Business Unit suggested

that 10-Step EVM implementation to the Sales Framework project would not have been the most

efficient approach to managing the endeavour. They instead stood by their usual conducting of weekly

meetings and expert judgement. The Implementation Manager suggested that this is most likely due to

the project’s specific circumstances and added that the gathering of EVM metrics would have been

distracting from what was important. The Head of Business Unit on the other hand supported his

argument by suggesting that the model gives more, but not necessarily better information and that

information fails to capture some important qualitative aspects which the weekly meetings did.

Even though this might seem like a direct contradiction between the interview and questionnaire

answers, a closer look to the research’s results provides a different perspective. To be more specific the

Implementation Manager described the project as “unconventional” and “too easy” while the Head of

Business Unit described the 10-Step EVM model as “too sophisticated” and said that it involves more

planning than needed. Both opinions would indicate that neither the Implementation Manager nor the

Head of Business Unit perceived the Sales Framework project as a venture that required a lot of

monitoring. It is therefore reasonable that they are sceptical towards the 10-Step EVM’s possible

benefits to the project since they perceived the amount of planning the model requires as

disproportionate to the project’s needs. In other words if they were to monitor the project without the

researchers’ support they would not have gathered the kind of information that the 10-Step EVM

requires. However the model was applied to the project by the researchers, who were knowledgeable in

10-Step EVM theory applying “the principles of good project management” from the very beginning,

which among other things means that they collected all the metrics necessary for EVM but also the

necessary information according to the 10-Step EVM’s planning steps, i.e. objectives, WBS, OBS, RAM,

schedule and budget information. Therefore it could be argued that the data which the Implementation

Manager and Head of Business Unit perceived as unnecessary most likely refers to the EVM metrics

alone rather than the entirety of the 10-Step EVM information. Furthermore the Head of Business Unit

stated that the project was a success as did the Implementation Manager. The Implementation Manager

expressed the belief that the project’s success “might have been compromised” by focusing on collecting

the EVM metrics. In other words they both agreed that the project was successful and even though EVM

information in specific might not have been the reason for its success, it is the authors’ belief that the

10-Step EVM planning steps and structured monitoring methodology were a deciding factor.

Furthermore questionnaire forms by definition usually give the participants limited options to state their

opinions especially in comparison to interviews. Therefore it could be argued that once the

Implementation Manager and Head of Business unit got the chance to go into depth as it pertains to

their opinion on the 10-Step EVM they focused and elaborated on what was new to them, i.e. the EVM

metrics possibly neglecting to acknowledge that EVM is only part of the 10-Step EVM model.

45

Chapter 5: Analysis


their results compare to the ones of the 10-Step EVM?

According to the interview and questionnaire answers, there does not seem to be one specific course of

action for managing risk at the Company. Furthermore there appears to be a general consensus among

participants that the 10-Step EVM model could potentially be comparatively better than the various

methods the Company implements to manage risk in their projects. Overall mostly positive feedback

was received regarding the model’s perceived risk management efficiency.

According to the answers elicited from the questionnaire, three out of four participants expressed

interest in implementing the 10-Step EVM model in various ways to Company projects, which would

suggest that they had at least some confidence in the method’s effectiveness. However according to the

questionnaire answers, one participant stated that they would not consider implementing the 10-Step

EVM model because it is not always possible to have all the necessary information in order to do so.

Moreover another participant suggested that actual and proper implementation of a new method is

challenging because it is expensive and time consuming and it is not always possible to know which

modules to use and which not to. It could be argued however that both of those comments suggest

scepticism rather than absolute negativity towards 10-Step EVM’s risk managing efficiency. This

argument could be further supported by the fact that almost all participants found the 10-Step EVM

approach to be a viable alternative at the very least.

During the conducted interviews both the Implementation Manager and Head of Business Unit

acknowledged the model’s comprehensive overview, structure and overall quality. Furthermore the

Implementation Manager commented on the model’s value as a communication tool and expressed her

belief that having a unified monitoring and risk management system in place could prove beneficial.

Despite the generally positive feedback both the Implementation Manager and Head of Business Unit

expressed scepticism as it pertains to the model’s applicability, mainly because of the amount of

planning and information it requires to provide its results. It was also suggested that the Company’s

business model is customer-driven and result oriented and therefore it is unlikely that the 10-Step EVM

model’s rigorous planning would have fit well with the Company culture thus 10-Step EVM

implementation would not have added value to its business model. That being said the company did not

have a unified system to address risk for all projects and all participants suggested different approaches

to managing risk. However the fact that both the Implementation Manager and Head of Business Unit

found the 10-Step EVM to be a good method that would have at least some beneficial effects to the

Company would suggest that it may be comparatively better than its Company counterpart.

It is reasonable to assume that a stakeholder would show hesitance in embracing a method they have

not witnessed before and therefore the very fact that the Implementation Manager and Head of

Business Unit acknowledged and considered the 10-Step EVM model, despite its rigorous planning could

be taken as a positive as it pertains to the its comparative advantage over the suggested Company

approaches. Thus it could be argued that the participants perceived the 10-Step EVM as a methodology

that could potentially improve the Company’s risk management efficiency.

46

Chapter 5: Analysis

5.3 Limitations

There were several limitations as it pertains to the research’s results because of a multitude of factors.

Said limitations are as follows:

1) The researchers did not have the opportunity to participate in the project for its full duration

since their thesis placement with the Company ended before the conclusion of the project

under research. Therefore it was not possible to record and compare the full range of the

project’s data with the 10-Step EVM forecasts.

2) Furthermore the researchers were not given specific financial information regarding personnel

salaries and therefore the project’s planned budget had to be partly based on educated

assumptions by the researchers that were intended to closely resemble the actual values. While

the researchers exhausted every alternative to make their assumptions as accurate as possible,

it is uncertain if their estimated values were sufficiently close to the actual ones. This could

affect the validity of the budget as well as the 10-Step EVM implementation step calculations.

3) While most of the research’s participants had a good command of the English language, it is

uncertain if there was any kind of miscommunication during the conducted interviews and

completion of questionnaire forms. Even though the prepared questionnaires and interview

questions were structured and developed in a clear and concise manner, the existence of a

language barrier could have affected the validity of some of the results.

4) Finally the project under research was a small scale internal project, undertaken without the

parameters of cost and or schedule being of critical importance, which could have somewhat

limited the applicability of the drawn conclusions to ventures with similar characteristics.

47

Chapter 6: Conclusion


6.1 Introduction

Projects are unique endeavours whose novel nature leaves them exposed to increased levels of risk. The

process of project monitoring and risk management should therefore be applied proactively rather than

reactively. The researchers of this master thesis endeavour to address said issue by studying the effects

of the 10-Step EVM model on a project undertaken during their placement to a global insurance

company. The aforementioned study revolves around two research questions:




their risk management results compare to the ones of the 10-Step EVM?

6.2 Conclusion

The 10-Step EVM model is an impressive methodology but its effectiveness could be hampered by a lack

of relevant information and training in tandem with its application. As stated previously in this master’s

thesis projects are unique endeavours, what this invariably pertains to is that a project’s variability

differs from case to case and no one methodology, no matter how effective it is on paper can account

for the infinite combinations of circumstance. If the data resulting from the project under research are

any indication the 10-Step EVM model, applied alongside the Company’s (case-by-case) methodologies

could potentially have improved the venture’s overall monitoring and risk managing efficiency, due to

the fact that the appropriate amount of planning had been conducted.

The Company’s top management seemed to favour a flexible model where no one method is used to

coordinate, monitor and risk manage their projects. Furthermore each one of the case-by-case methods

described by the Company’s top management involved a different level of planning, but in most cases

preference was shown towards keeping the project managing process adaptable to the ever-changing

circumstances. Forecasting is a prediction of what the future will entail while planning is a prediction of

what the future ought to be. Risk planning is conducted in preparation for the possibility of a negative

result by way of likely scenarios of which one has a contingency plan for the possible eventual outcome.

Thus planning through forecasting helps one prepare for all possibilities. According to the industry

experts who participated in this research there seems to be a threshold for planning and or structure

which is the difference between it being of benefit or counter-productive to a project.

48


The Company’s top management were mostly exposed to the results of the 10-Step EVM rather than its

process, which the researchers were exclusively responsible for. Therefore it could be argued that their

lack of involvement to the model’s rigorous planning process narrowed their perception of its full

potential and possible benefits to the Company’s business model. During their tenure, the researchers

observed the contribution of 10-Step EVM practices to a Company project and have reason to assume

that if the model was applied on larger scale it could benefit the Company on the whole. Having said

that, the 10-Step EVM is new to the Company’s stakeholders and new is always daunting and for a

plethora change is difficult, but it is the authors’ belief that with the gradual adoption of “good project

management” and 10-Step EVM practices/methodologies the necessary framework and or baseline of

information can be created so that no matter the method, the appropriate quality and quantity of

information is always known. This way in time the Company could have enough information in order to

implement the methodology that best fits the scenario at hand, rather than trying to tailor the planning

of each project to the metrics they need to create.

Neither academic knowledge nor professional experience is completely “correct” individually, thus it is

the author’s belief that the key to project success lies in the fruitful combination of both academic

knowledge and professional experience, based on the project at hand. It comes down to deciding when

increased flexibility is of most importance, even though this could at times be at the cost of planning and

vice versa. One could summarise the above argument with the following two worded statement: “it

depends”. However what remains unchanged is the need to carefully examine the situation in

combination with tracking the unique deciding factors that will decidedly affect the project.

6.3 Recommendations for Future Research

It would be most interesting if the 10-Step EVM model could be applied to a project that the researchers

can participate in and monitor from start to finish. That would allow the collection of sufficient data to

compare the forecasted values against the project’s final budget and schedule and draw safer

conclusions regarding the model’s results’ validity.

Another interesting research subject would be the study of 10-Step EVM results in two separate

projects, either within the same industry/organisation or even in completely different areas of

application. The comparison of the resulting data could help determine whether there is a significant

correlation between the model’s efficiency and project-specific parameters such as area of application.

Alternatively given enough time and resources one could implement the model to forecast the progress

of a programme with several projects, or even a portfolio consisting of several programmes. Since EVM

can be applied to virtually any endeavour with a pre-defined budget and time frame, it would be very

interesting to try and determine the full extent of its potential.

49

Appendices

Reference List

Anbari, Frank T. (2003) ‘Earned Value Project Management Method and Extensions’, Project

Management Journal, vol. 31, Dec, pp. 12-23

Antvik, Sven (2013) ML2106 Lecture 8: Earned Value Management, KTH: Industrial Engineering and

Management

Antvik, Sven and Sjöholm, Håkan (2012) Project Management and Methods

Association for Project Management (APM) Earned Value Factsheet, [Online], Available:

http://www.ehu.es/asignaturasKO/PM/OTmec/resources/EVFactsheet.pdf [23 May 2014]

Chapman, Chris and Ward Stephen (2004) ‘Why risk efficiency is a key aspect of best practice projects’,

International Journal of Project Management, vol. 22, November, pp. 619-632.

Cooper, Dale F. and Grey, Stephen and Raymond Geoffrey and Walker, Phil (2005) Project Risk

Management Guidelines, Managing Risk in Large Projects and Complex Procurements

De Bakker, Karel and Boonstra, Albert and Wortmann, Hans (2012) 'Risk managements' communicative

influencing IT project success', International Journal of Project Management, vol. 30, May, pp. 444-457.

Electronic Industries Alliance (EIA) (1998) EIA STANDARD Earned Value Management Systems EIA-748,

[Online], Available: https://www.emcbc.doe.gov/pmo/supporting_files/ansi-eia_748_may98.pdf [23 May

2014]

European Commission (2014) Overview, [Online], Available:

http://ec.europa.eu/economy_finance/eu/forecasts/2014_winter/overview_en.pdf [23 May 2014]

Government Accountability Office (GAO) (2009) GAO Cost Estimating and Assessment Guide, Best

Practices for Developing and Managing Capital Program Costs

http://www.ehu.es/asignaturasKO/PM/OTmec/resources/EVFactsheet.pdf

https://www.emcbc.doe.gov/pmo/supporting_files/ansi-eia_748_may98.pdf

http://ec.europa.eu/economy_finance/eu/forecasts/2014_winter/overview_en.pdf

50

Appendices

Havila, Virpi and Medlin, Christopher J. and Salmi, Asta (2013) 'Project-ending competence in premature

project closures', International Journal of Project Management, vol. 31, January, pp. 90-99

Heldman, Kim (2011). Project Management Jumpstart - 3rd Edition

Henderson, Kym (2007) Earned Schedule: A Breakthrough Extension to Earned Value Management,

[Online], Available:

http://earnedschedule.com/Docs/Earned%20Schedule%20a%20%20Breakthrough%20Extension%20to%20EVM%2

0-%20Henderson.pdf [23 May 2014]

Humphreys & Associates (2012) Basic Concepts of Earned Value Management (EVM), [Online], Available:

http://www.humphreys-assoc.com/evms/getting-started-with-basic-concepts-earned-value-management-ta-a-

74.html [23 May 2014]

International Organization for Standardization (ISO) (2003)ISO 10006 Quality management systems —

Guidelines for quality management in projects – 2ndEdition

Kaplan, Robert S. and Mikes Anette (2012) Managing Risks: A New Framework, [Online], Available:

http://hbr.org/2012/06/managing-risks-a-new-framework/ar/1 [23 May 2014]

Kerzner, Harold (2009) Project Management, A System Approach to Planning, Scheduling and Controlling

Moslemi Naeni, Leila and Shadrokh, Shahram and Salehipour, Amir (2013) ‘A fuzzy approach for the

earned value management’, International Journal of Project Management, vol. 32, May, pp. 709-760.

Nikander, Ilmari O. and Eloranta, Eero (2001) 'Project management by early warnings', International

Journal of Project Management, vol. 19, pp. 385-399.

Philipson, Erik and Antvik, Sven (2012) Earned Value Management - an introduction – 2nd Edition

Project Management Institute (PMI) Executive Guide to Project Management, [Online], Available:

http://www.pmi.org/~/media/PDF/Publications/PMIEXEC06.ashx [23 May 2014]

http://earnedschedule.com/Docs/Earned%20Schedule%20a%20%20Breakthrough%20Extension%20to%20EVM%20-%20Henderson.pdf

http://earnedschedule.com/Docs/Earned%20Schedule%20a%20%20Breakthrough%20Extension%20to%20EVM%20-%20Henderson.pdf

http://www.humphreys-assoc.com/evms/getting-started-with-basic-concepts-earned-value-management-ta-a-74.html

http://www.humphreys-assoc.com/evms/getting-started-with-basic-concepts-earned-value-management-ta-a-74.html

http://hbr.org/2012/06/managing-risks-a-new-framework/ar/1

http://www.pmi.org/~/media/PDF/Publications/PMIEXEC06.ashx

51

Appendices

Project Management Institute (PMI) (2005) Practice Standard for Earned Value Management

Project Management Institute (PMI) (2006) Practice Standard of Work Breakdown Structures – 2nd

Edition

Project Management Institute (PMI) (2012) PMI’s Pulse of the Profession, Driving Success in Challenging

Times, [Online], Available: http://www.pmi.org/~/media/PDF/Research/2012_Pulse_of_the_profession.ashx

[23 May 2014]

Project Management Institute (PMI) (2013a) PMI's Industry Growth Forecast, Project Management

Between 2010 + 2020, [Online], Available: http://www.pmi.org/Knowledge-

Center/Pulse/~/media/PDF/Business-Solutions/PMIProjectManagementSkillsGapReport.ashx [23 May 2014]

Project Management Institute (PMI) (2013b) PMI’s Pulse of the Profession, The High Cost of Low

Performance, [Online], Available: http://www.pmi.org/Knowledge-Center/Pulse/~/media/PDF/Business-

Solutions/PMI-Pulse%20Report-2013Mar4.ashx [23 May 2013]

Project Management Institute (PMI) (2013c) A Guide to the Project Management Body of Knowledge –

5th Edition

Selltiz Claire (1962) Research Methods in Social Relations - 2nd Edition

United Nations (UN) (2013) World Economic Situation and Prospects 2013, Update as of mid-2013*,

[Online], Available: https://www.un.org/en/development/desa/policy/wesp/wesp2013/wesp13update.pdf [23

May 2014]

Vahoucke, Mario (2008) Measuring Time, An earned value simulation study, [Online], Available:

http://www.earnedschedule.com/Docs/Measuring%20Time%20-%20Vanhoucke.pdf [23 May 2014]

http://www.pmi.org/~/media/PDF/Research/2012_Pulse_of_the_profession.ashx

http://www.pmi.org/Knowledge-Center/Pulse/~/media/PDF/Business-Solutions/PMIProjectManagementSkillsGapReport.ashx

http://www.pmi.org/Knowledge-Center/Pulse/~/media/PDF/Business-Solutions/PMIProjectManagementSkillsGapReport.ashx

http://www.pmi.org/Knowledge-Center/Pulse/~/media/PDF/Business-Solutions/PMI-Pulse%20Report-2013Mar4.ashx

http://www.pmi.org/Knowledge-Center/Pulse/~/media/PDF/Business-Solutions/PMI-Pulse%20Report-2013Mar4.ashx

https://www.un.org/en/development/desa/policy/wesp/wesp2013/wesp13update.pdf

http://www.earnedschedule.com/Docs/Measuring%20Time%20-%20Vanhoucke.pdf

52

Appendices

Appendix A

10-Step EVM Questionnaire

Q.1 : Given only the pre-EV information, i.e. Actual Cost (AC) to date and achieved performance to date how

would you proceed?

Q.2 : How effective do you believe your suggested method would be in safeguarding the endeavour from the

element of risk, on a scale of 1 (Not at all effective) to 10 (Completely effective)?

1 2 3 4 5 6 7 8 9 10

Q.3 : Given the entirety of the 10-Step EVM information, would you proceed differently?

( Y / N )

Q.3.1 : If (Y), how? (*Please respond with a short answer)

Q.3.2 : If (N), why not? (*Please respond with a short answer)

53

Appendices

Q.4 : Do you believe that the 10-Step EVM approach would have been comparatively more/less effective

in safeguarding the endeavour from the element of risk?

( More effective / Less effective )

Q.4.1 : If so, how much more/less effective on a scale of 1 (Not at all effective) to 10

(Significantly more effective)?

1 2 3 4 5 6 7 8 9 10

NEUTRAL

Q.5 : Do you believe that implementing the 10-Step EVM could improve the Company’s business

model?

( Y / N )

Q.6 : Would you consider implementing 10-Step EVM practices in Company projects?

( Y / N )

Q.6.1 : If (Y), in what manner? (*Please respond with a short answer)

Q.6.2 : If (N), why not? (*Please respond with a short answer)

54

Appendices

Q.7 : Anything you would like to add?

- Thank you -

55

Appendices

Appendix B

Interview Protocol Form

1|Interview Information

2|Instructions

Release Form

I understand that the above referenced Interviewers (Dias-Johnson Georgy and Frantzis Dionysios) are preparing and writing the above referenced Thesis (10-Step EVM: Implementation to Insurance Projects) which upon completion and formal approval will be archived at the Royal Institute of Technology (KTH) in its Library and made available in-house via an on-site searchable data base. In addition, the Thesis will be made available world-wide via an Internet searchable database. In order to assist the Interviewers and KTH in the preparation of the Thesis, I have agreed to be interviewed, to the recording of the interview(s) in any form and in any media, and to provide information and other materials to be used in connection with the Thesis, including my personal experiences, remarks, incidents, dialogues, actions, and recollections. I hereby grant to the Interviewers and KTH, and to the licensees, successors, and assigns of each, of the following rights in connection with the Interview Materials for use as part of the Thesis or any advertising, packaging, or promotional materials for the Thesis, in any and all editions, versions, and media, in perpetuity and throughout the world: The right to quote, paraphrase, reproduce, publish, distribute, or otherwise use all or any portion of the Interview Materials in the Thesis. I hereby waive any right I may have to inspect the Interview Materials as incorporated in the Thesis, and acknowledge that I have no copyright or other rights in the Thesis. I hereby release and discharge KTH, the Interviewers, and the license and successors, and assigns of each, from any and all claims, demands, or causes of action that I may have against them regarding any use of the Interview Materials or regarding anything contained in the Thesis or in related advertising or promotional materials, including (but not limited to) any claims based on the right to privacy, the right to publicity, copyright, libel, defamation, or any other right. Agreed and confirmed: Name, Surname:_____________________________________ Signature:

Thesis title 10-Step EVM: Implementation to Insurance Projects

Time (Interview Time HH:MM)

Date (Interview Date DD/MM/YY)

Place (Interview Location)

Interviewer(s) Dias-Johnson Georgy, Frantzis Dionysios

Interviewee (Interviewee Name and Surname)

56

Appendices

Approximate Length of Interview 30 minutes to 1 hour

3|Questions

How does the Company usually monitor their projects and how do they manage risk?

o How effective would you say those methods are?

o Why are you using those methods? (Methods’ Pros)

o What are some of the limitations of those methods? (Method’s Cons)

Notes:

57

Appendices

What do you think about the 10-Step EVM model?

o What do you believe are the model’s strengths/weaknesses?

o How does it compare to the method you currently implement?

Advantages

Disadvantages

o What do you think would be the effects of its application to Company projects?

Beneficial

Harmful

Notes:

58

Appendices

How does the 10-Step EVM model approach compare to the monitoring and risk management methods

you would normally use for the Sales Framework project at the Company?

o Quality/Quantity of information

o Decision making

o Risk managing efficiency

o Overall project success

Notes:

59

Appendices

Reflections from Interviewers

4|Closure

o Thank interviewee

o Assure confidentiality

o Ask permission to follow-up

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