What are the best practices for reporting and communicating EVM variance analysis results to stakeholders?
Earned Value Management (EVM) is a powerful technique for measuring project performance and progress. It integrates scope, schedule, and cost data to calculate key indicators such as cost variance (CV), schedule variance (SV), cost performance index (CPI), and schedule performance index (SPI). However, these numbers alone are not enough to communicate the status and issues of your project to your stakeholders. You need to present them in a clear, concise, and meaningful way that aligns with your project objectives and stakeholder expectations. In this article, you will learn some best practices for reporting and communicating EVM variance analysis results to your stakeholders.
Before you start preparing your EVM variance analysis report, you need to define the purpose and scope of your communication. What are the main messages you want to convey? Who are your target audiences and what are their information needs? How often and in what format do you need to report? What are the assumptions, constraints, and risks that affect your analysis? By answering these questions, you can tailor your report to suit your specific situation and avoid unnecessary or confusing information.
One of the best ways to communicate EVM variance analysis results is to use visual aids and charts that can illustrate the trends, patterns, and deviations of your project performance. For example, you can use a stacked bar chart to show the planned value (PV), earned value (EV), and actual cost (AC) of your project over time. You can also use a line chart to plot the CV, SV, CPI, and SPI against a baseline or a target. These charts can help you highlight the areas of concern, the root causes of variance, and the corrective actions taken or planned.
Another important aspect of reporting and communicating EVM variance analysis results is to explain the context and impact of your findings. You need to provide some background information on how you derived your EVM data, what are the sources of variance, and how they affect your project objectives and deliverables. You also need to quantify the impact of variance on your project budget, schedule, scope, and quality. For example, you can use the estimate at completion (EAC), estimate to complete (ETC), and variance at completion (VAC) formulas to project the final cost and duration of your project based on your current performance.
The ultimate goal of reporting and communicating EVM variance analysis results is to provide recommendations and action plans that can help you improve your project performance and achieve your desired outcomes. You need to identify the root causes of variance, the potential risks and opportunities, and the best practices and lessons learned from your analysis. You also need to propose specific, measurable, achievable, realistic, and time-bound (SMART) actions that can address the issues and gaps in your project execution. You need to assign roles and responsibilities, set deadlines and milestones, and monitor and control the progress and results of your action plans.
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When explaining the root cause of any variance, it’s critical to explain both the WHAT and the WHY. Peel back the onion so that your audience truly understands which will allow open discussion for possible corrective action(s) A very simple example might be: What: the drawings are late Why: the design is still in review and engineering has yet to release ( keep asking why…)
The last but not least best practice for reporting and communicating EVM variance analysis results is to use clear and consistent language that can convey your message effectively and accurately. You need to avoid jargon, acronyms, and technical terms that may confuse or alienate your stakeholders. You need to use simple, concise, and active sentences that can express your ideas and arguments. You need to use consistent terminology, format, and style throughout your report. You need to proofread and edit your report for grammar, spelling, and punctuation errors.
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100%. Many times, we report to people who find the formulas and analysis of EVM complex. We must use language that ensures all stakeholders can easily understand what is happening without confusion. If the true cause of a variance isn't clearly conveyed, the wrong corrective action may be taken. My favorite story is about a BAD report being referenced as contributing to a certain variance. One of the stakeholders asked, "Why would we be using a bad report for the source of any data?" Firstly, BAD was not defined (Ballistic Aerodynamic Report) and then, in a subsequent reference, the spellchecker put it all in lowercase and no one caught it. He knew that report as the BAR but the vendor called it BAD.
Finally, you need to solicit feedback and follow up with your stakeholders after you deliver your EVM variance analysis report. You need to invite questions, comments, suggestions, and concerns from your stakeholders and address them promptly and respectfully. You need to acknowledge their input and incorporate it into your future reports and action plans. You need to follow up with them regularly and update them on the status and outcomes of your action plans. You need to establish a trusting and collaborative relationship with your stakeholders that can foster mutual understanding and support for your project.
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While all of the recommendations above are potentially valuable and probably a good idea, it is more important that you identify and discuss variances with your team leadership than it is to document them. If you have a contractual obligation then it's a moot point, but if you have some flexibility in reporting, and the thought of writing another report or plan is stopping you from doing more frequent review, then reduce the paperwork and just have the meetings.
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