Latent Errors and Visible Earned Value: How the Evolutionary Model Integrates Earned Value Metrics with Project System Dynamics

Abstract

A project model is presented that weaves together ideas from earned value project management and systems dynamics. It is able to adjust to increasingly unhealthy actual project behaviors in ways that preserve the signature pattern of the staffing histograms observed in the real world and provide a tool for managers to correct projects that are not meeting the plan. Starting from the planned staffing histogram and the project performance baseline, the model captures the delay and cost of experience dilution, includes the unplanned-for effort that is revealed in the typical pattern of the Cost Performance Index, assesses progress using the actual cost to date and the earned value to date, and adjusts staffing, scope, or both, to complete the project on schedule. A new method of approximating work remaining, called project-to-date, is shown to track the planned staffing histogram better than the commonly used fraction-complete method.

Keywords

• project management
• earned value analysis
• latent errors
• project-to-date metrics
• schedule management
• undiscovered rework