All posts tagged Earned Value

Learning how to do something is not the same as learning why something should be done. Most of us have been told at various times by a supervisor or boss to do something without any explanation. There may be some urgency in the request and for that reason alone there is not much time to explain why it needs to be done. Still, I will never forget the time I questioned a senior partner’s instructions only to be told, “because I sign your paychecks”.

Even so, when you cannot be bothered to explain assignments to your employees, those employees are not going to learn how to think for themselves. Those employees will also become bored with their jobs. Eventually they will go somewhere else where work is more meaningful. In 2018 this was especially true in the United States, where record numbers of people quit their jobs (3.4 million in April 2018 alone). 

As an instructor, I am fully aware that “why” is just as important as “how”. For example, it is one thing to explain how to set up multiple calendars in Primavera P6. Also very important is “why” this can cause issues with activity dates and float values.

Explaining “how” is fairly straightforward. “Why” takes many years of practical experience. Examples taken from real projects give depth to the explanations. Moreover, Primavera P6 is used in many industries and for that reason there is quite a lot of flexibility built into the program. Best practices for using Primavera P6 likewise vary by industry.

For example, consider the different ways to calculate Performance Percent Complete, which in turn determines Earned Value. In the construction industry we would rarely consider using any setting other than Performance Percent Complete = Activity Percent Complete.

This is in fact so common that I doubt most schedulers in the construction industry have ever bothered to consider Performance Percent Complete. However, there is actually a very good reason for showing Performance Percent Complete on a schedule. Unlike Activity Percent Complete, Performance Percent Complete rolls up, meaning we can show an overall percent complete for the project. Activity Percent Complete only displays on activities.

In the construction industry we like to take credit for every little bit of work when it comes to percent complete. If necessary, we can display up to two decimal places as well (more common when Level of Effort activities or Activity Steps are deployed). Now, I would also argue that using a schedule as a payment tool tends to interfere with the more noble purpose of scheduling; and if the schedule is not cost loaded I could not care less about the percent complete. Remaining duration is far more important!

But in other industries there are valid reasons for tracking Performance Percent Complete differently. The options are:

• Use WBS Milestones
• 0/100 % Complete
• 50/50 % Complete
• Custom % Complete

The 50/50 % Complete method means that the task is 50% complete as soon as an Actual Start date is recorded. I think of the classic movies where someone tears up a large denomination bill and hands half of it to the hired gun. When the job is completed the hired gun gets the other half. So we are not expecting him to report any further progress until he is done. There is no in-between.

The Custom % Complete method is flexible enough that I could see the benefit even in the construction industry. The typical task should be of a rather short duration – commonly 20 working days or less (with procurement tasks being the exception) or slightly less than one month. No task should therefore stay open very long. With this in mind, why not make progress reporting simple? The custom method allows users to set intervals such as 25%, 50%, 75% and 100%.

Quite frankly, if everything goes according to plan at most we would be recording the task as partially complete during the current month and 100% complete the following month. Activities should only be in progress for one month if the maximum duration is 20 working days! The owner should not be overly concerned with paying 50% vs. 25% or 75% vs. 50% this month knowing he will owe the balance the following month anyway.

Activity durations are another example. In the construction industry it is generally true (and often a contractual requirement) that the minimum duration is one day and all durations are integers (i.e. whole numbers). Even a project meeting must be assumed to last all day because of this convention – and keeping in mind that the maximum duration will still be roughly 20 working days. This means that lag durations should also be whole numbers. Personally, I think it makes everything much easier because I know that if I see a duration (including Total Float) that is not an integer, something is wrong with my schedule.

Partial durations tend to creep in during the update process, especially when the scheduler is using Duration % Complete as the percent complete method. Trying to force a particular percentage (such as 50% on an odd-duration task) often results in a remaining duration that is not an integer. For this reason I input the remaining duration when using Duration % Complete and let the percentage be whatever it has to be. On a schedule that is not cost-loaded the percentage is of little importance to me anyway.

In other industries the activity durations might be quite small. The minimum duration supported by Primavera P6 is one minute, if you were wondering. On a refinery shutdown that is costing the owner millions of dollars of revenue each day we clearly need to track progress on a more granular level. These schedules tend to be much larger in terms of the number of activities even though the project duration may seem rather short. Time costs a lot of money! 

Likewise, even the activity relationships tend to change when the durations are very short. There is simply less need to overlap tasks when durations are in minutes or a few hours at best. Finish-to-Start durations become the norm. Not having to worry about relationship types (or lags, for that matter) makes up for the size of the schedules to some extent. Nevertheless, when tracking progress it is rarely necessary to record the exact time of day that a task is performed. Done is done.

So we can see that understanding “why” is perhaps more important than “how”. As a Primavera instructor with decades of practical scheduling experience I can think of many examples and options for how to schedule using Primavera P6 and why some options within the program might be better than others depending on the industry or the situation. There is more to Primavera P6 than just menus and buttons.