The publication of The Origins and History of Earned Value Management in the August edition of PM World Journal (Vol. XI, Issue VIII) marks the end (almost) of a long journey.
This paper looks at the creation of earned value management (EVM) in the 1960s and its development and evolution through to the 2020s. However, the concept of EVM did not suddenly appear, the foundations of EVM were laid by previous generations, this paper demonstrates EVM is a synthesis of ideas and concepts some of which are hundreds of years old. The four precursors to EVM are the use of computers to calculate time schedules (CPM and PERT), sophisticated engineering cost controls, the use of breakdown structures to aid management, and the emergence of the concept of modern project management.
The use of computers to analyze project schedules in the late 1950s brought science to the management of time. There was a strong desire in the US Government for similar levels of sophistication to be applied to cost management on defense projects. This was the catalyst for the development of EVM in the early 1960s. The development of scheduling is traced in the papers listed in The History of Scheduling.
The discipline of engineering cost management was well established in the early part of the 20th century and its roots are much older. The limitation was the process of cost control using paper based manual systems tended to be retrospective. The development of cost engineering is traced in The History Cost Controls.
The idea of using breakdown structures to define, and then control, work also has a very long history. The Work Breakdown Structure (WBS) is at the heart of EVM. The development of the WBS is described in The Origin of Work Breakdown Structures (WBS).
Finally, a project controls system needs a defined project to control. The concept of modern project management is relatively new, although again its roots are very deep. Its development is traced in Origins, and trends in, modern project management.
When these different strands of development were brought together in the USA in the 1960s, EVM emerged. Tracing each of the histories outlined above has been a fascinating journey. The papers and many of the source materials are freely available to download from the history section of the Mosaic website: https://mosaicprojects.com.au/PMKI-ZSY.php.
The problem with studying history is every time you look at something, there’s other interesting facets to analyze and research. I have identified two areas where I’m likely to go next (but not for a few months):
– Documenting the early mainframe computer software that was used for CPM, PERT and EVM.
– In March 2023 Earned Schedule will be 20 years old, its development and the challenges will make an interesting story.
In the meantime download and enjoy The Origins and History of Earned Value Management: https://mosaicprojects.com.au/PDF_Papers/P207_EVM_History.pdf
And…. If you find any errors, or have additional information let me know. I routinely update these papers as new information comes to light.
Pat Weaver
Lynda Bourne
Aavssitedev's Blog
Pat as much as I respect your work as a researcher, for the life of me I am unable to comprehend why you continue to refuse to include the published work of Halbert Powers Gillette and Richard Turner Dana in their 1909 book, “Cost Keeping and Management Engineering: A Treatise for Engineers, Contractors, and Superintendents Engaged in the Management of Engineering Construction” https://books.google.com.sg/books/about/Cost_Keeping_and_Management_Engineering.html?id=zO-ADudj-R8C&redir_esc=y in your usually well-researched papers?
Speaking as a lifelong construction CONTRACTOR this was the basis for how I was taught about Earned Value Management back in the early 1970s by Marvin Gates, P.E., Adjunct Professor at Worcester Polytechnic Institute. (WPI) and for the past 50+ years formed the basis for how we manage our own companies using Earned Value Management as a “pay for performance” system, both as OWNERS and CONTRACTORS.
The biggest concern is if you correlate the work of Gillette & Dana (https://build-project-management-competency.com/1-4-1-11-unit-11/ Figure 3) with the work of Gantt, Taylor, and Priestman but more importantly, Halsey, Rowan, Emerson & Bedeaux (See Figure 92, https://build-project-management-competency.com/1-4-1-11-unit-11/) you can see clearly that Earned Value originated on the factory floors of 18th Century Industrial Revolution as a “pay for performance” or “incentive payment” system that is still in common practice today in nearly all production factories and in many construction subcontractors who bid, bill and are paid on a “unit in place” basis, including dirt work (Civil), paving, roofing, drywall, painting, and flooring, just to name a few.
More relevant, given much of these incentives were based on “Earned Time” they refute the claims of Walt Lipske and PMI that “earned schedule” or “earned time” originated with the USAF. “Earned Time” or “Earned Schedule” has always been an integral part of EVM for as long as I have been using it. (50+ years) Not sure where Wayne Abba is these days but he and I both swore up and down that what Walt/PMI claimed was not true. That ES/ET was always an integral part of EVM. It took me years of research before I found the “smoking gun” to prove it with Gillette & Dana. (Thanks to John Hollmann, P.E.)
What is even more IRONIC is unlike most contractors who complain about EVM as being too bureaucratic, we INSIST on using EVM as the basis for payment in all our contracts, not as the US Government, PMI or AACE advocate it, but as it evolved during the 18th Century as a “prompt payment” incentive system that linked PERFORMANCE to PROMPT PAYMENT. (See Figure 30, https://build-project-management-competency.com/1-4-1-11-unit-11/) We have built our successful business model around the use of EVM as a tool to maintain cash flow neutrality. (See Figures 24-29- https://build-project-management-competency.com/1-4-1-11-unit-11/) (Note to our Islamic readers, this is also consistent with Sharia Law- “Pay your workers before their sweat is dry”.)
Bottom line- we use EVM as Gillette and Dana define it as a core business practice and we teach it in our Project Controls/PMO competency development courses. Our shining “success” story is Freeport McMoran Indonesia which implemented EVM as advocated by Gillette & Dana and documented 65 million USD in savings over a 4-year period. https://build-project-management-competency.com/ptmc-training-standards-and-specifications-individual/ and https://pmworldlibrary.net/wp-content/uploads/2013/01/PMWJ2-Sep2012-WIBIKSANA-EVM-Adapted-for-UndergroundMining-StudentPaper.pdf.
Paul, it would really help people if you actually read the material before posting totally irrelevant and inept comments.
This paper STARTS in 1960 (not 1900). Three other papers cover the period through from 1700 to 1960 – they are referenced. It is a real pity you cannot be bothered to looking at them – if you had you would not be making such a fool of yourself.
It would also help if you actually understood what earned value and earned schedule are – your rather weird opinions are not aligned with ANY of the documents that define EVM and ES which makes your abstract theories irrelevant. All of the DEFINITIVE documents are either available for download from https://mosaicprojects.com.au/PMKI-ZSY-020.php#EVM (scroll down), or referenced eg ISO 21508. The most basic error in your view of the world is confusing contract payment systems with Earned Value Management – they are completely separate processes and systems.