Fall 2008, Issue 4

The Measurable News

The Magazine of the Project Management Institute’s College of Performance Management

Does Project Performance

Stability Exist?
A Re-examination of CPI
and Evaluation of SPI(t) Stability*
By Kym Henderson** and Dr. Ofer Zwikael

Abstract
The development of the Earned Schedule (ES) method by Lipke in
Did you hear? 2003 has been shown to be an important extension to the Earned
Value Management (EVM) method, increasing the utility of EVM data
The Measurable News for project schedule analysis, control and oversight. As ES provides
is now accepting a reliable time-based indicator of Schedule Performance, the objec-
sponsorship for tive of this paper is to investigate whether the SPI(t) exhibited similar
future issues. stability characteristics to those extensively reported for the Cost
With sponsorship, Performance Index (CPI) in EVM. This paper analyzes EVM data
you receive from three different countries for projects in three industry segments.
Thirty-seven projects were examined for SPI(t) stability and 26 for
• 4-color, 1/3-page ad on CPI stability. It has been found that while the behavior of SPI(t) is
front cover
broadly consistent with CPI, the widely reported CPI stability rule
• 4-color, full-page ad on cannot be generalized even within the US Defense Department (US
back cover DoD) project portfolio. Further research is required to develop im-
• Priority publication of proved understanding of project performance characteristics and the
two articles from profes- behavior of CPI and the SPI(t).

T
sionals in your organ-
ization he cancellation of the US Navy’s A-12 Avenger II stealth aircraft
program in January 1991 [1] [2] resulted in research during the
Too good to 1990s, which investigated the reliability of Earned Value Manage-
ment (EVM) cost prediction and the behavior of the Cost Perfor-
be true? mance Index (CPI)1 using US Defense Department (US DoD) project 2
data. These research findings have come to be regarded as generally ap-
Find out more!
Contact Managing Director *Reprint from Crosstalk, Journal of Defense Software Engineering, April 2008.
Gaile Argiro **The contents of this paper are the author’s personal views and conclusions which do not
reflect an endorsed position of the PMI College of Performance Management.
703.370.7885
1
Unless otherwise stated, all references to CPI and the SPI(t) refer to the cumulative values.
ExecAdmin@pmi-cpm.org
2
”Project” has been used consistently throughout this paper. In US government, particularly
the US DoD context, “program” may be the more appropriate term.
Continued on page 17.

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Fall 2008, Issue 4
The Measurable News 3

The Measurable News is an official publication

of the College of Performance Management
Contents
(CPM), 101 S. Whiting Street, Suite 320, Alexan-
dria, VA 22304, telephone 703.370.7885. The
Measurable News is published four times per
Does Project Performance Stability Exist?
year. A Re-examination of CPI and Evaluation of SPI(t) Stability
Editorial Staff By Kym Henderson and Dr. Ofer Zwikael.......................................... 1
Publisher
College of Performance Management

Managing Director
Gaile Argiro
Integrating Systems Engineering with Earned
Story Editor
Value Management
Peter Schwarz By Paul J. Solomon, PMP.................................................................... 7
Designer
Amanda Mitchell

Vice President of Communications

Robert Horrigan IPM-2008...............................................................16
Editorial Copy Vendor Services..................................................18
Editorial contributions, photos, and miscella-
neous inquiries should be addressed and sent to
the Editor at CPM headquarters. Please follow
the author guidelines posted on the PMI-CPM
The Trouble with Earned Schedule
Web site. Letters submitted to the editor will By Wayne Abba............................................................................... 28
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CPM reserves the right to refuse publication of
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4
The Measurable News Fall 2008, Issue 4

PMI-CPM GOVERNING BOARD

2008–2010
President
John Singley, PhD, PMP
703.861.6700
President@pmi-cpm.org

Executive Vice President

Susan Wood
850.892.3747
ExecutiveVP@pmi-cpm.org

Vice President of Finance

Cathy Ahye Enjoy the season,
703.627.2022
VPFinance@pmi-cpm.org no matter where in
Vice President of Administration
the world you are…
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Vice President of Conference & Events

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Vice President of Education & Certification

Joe Houser
301.529.6697
VPED@pmi-cpm.org

Vice President of Research & Standards

Kym Henderson
61.414.428.537
VPResearch-Standards@pmi-cpm.org

Vice President of Communications

Robert Horrigan
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VPCommunications@pmi-cpm.org

Past President
Neil Albert
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PastPresident@pmi-cpm.org
Register now for …
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• Project Management Process Design

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1 . 5 6 1 . 6 9 4 . 1 6 4 7 CHARTING PROJECT SUCCESS
Fall 2008, Issue 4
The Measurable News
Integrating Systems Engineering with
Earned Value Management
By Paul J. Solomon, PMP
Integrating Systems
Engineering (SE)
with Earned Value Management (EVM)
E
VM is capable of integrating a project’s
cost, schedule, and technical performance.
However, an organization may comply with
GEIA EIA-748-B, the EVMS standard, yet
fail to integrate the project’s technical objectives
into the Performance Measurement Baseline (PMB).
EVM data will be reliable and accurate only if the
right base measures of technical performance are se-
lected and if progress is objectively assessed.
Guidance and best practices for planning and
measuring technical performance are provided by
SE and project management standards.
EVM will provide more reliable information for
analysis and decision-making if the EVMS guide-
lines are augmented by guidance regarding main-
taining the technical baseline, measuring technical
performance, and managing risk.
GAO Procurement Findings and
Recommendations
The Government Accountability Office (GAO) studied
failures in acquisition of weapons systems and Infor-
mation Technology (IT) systems. One report concluded
that, if EVM is not properly implemented, the data may
Table 1: Defense Acquisitions.
GAO Report No. Title
Defense Acquisitions:
DOD Has Paid Billions in Award and
Incentive Fees Regardless of Acquisition
06-66 Outcomes
Defense Acquisitions: Assessments of
Selected Major Programs
06-391
7
be inaccurate and misleading. Recent reports disclose
recurring weaknesses in procurement management and
recommendations for achieving desired outcomes, as
summarized in the following tables.
Table 1, Defense Acquisitions, includes recom-
mendations to hold contractors accountable for
achieving desired outcomes. Table 2, Effective
Implementation of EVM, includes findings that
agencies are not measuring actual vs. expected per-
formance in meeting performance goals. Table 3,
Best Practices, includes demonstrating that the de-
sign meets performance requirements.
The Office of Management and Budget (OMB)
Circular A-11 specifies that the EVMS must measure
progress towards milestones, in terms of capability
of the investment to meet specified requirements and
quality.
DOD Acquisition Transformation
The DOD issued acquisition policy and guides that
specify measurement of technical performance
along with cost and schedule performance. The
DOD guides that will enable implementation of the
policy are based primarily on SE standards. In fact,
DOD states that revitalizing SE is a component of its
DOD’s Defense Acquisition Transformation Report
to Congress.
Findings and Recommendations
Contractors not held accountable for
achieving desired outcomes:
ª Cost goals
ª Schedule goals
ª Desired capabilities
• Programs do not capture early on
the requisite knowledge needed
to effectively manage program
risks
DOD needs to change its requirements
and budgeting processes to get desired
outcomes from the acquisition process
8
The Measurable News Fall 2008, Issue 4

DOD Guides Tables 4 and 5 show pertinent elements of the

DOD guides that support the integration of techni-
cal, schedule, and cost performance follow:
• Defense Acquisition Guidebook (DAG)
• SE Plan Preparation Guide (SEP)
• Work Breakdown Structure Handbook, MIL-
HDBK-881A (WBS)
• Integrated Master Plan and Integrated Master
Schedule Preparation and Use Guide (IMP/IMS).
• Guide for Integrating SE into DOD Acquisition
Contracts (Integ SE)
Table 2: Effective implementation of EVM.
GAO Report No. Title
06-250 IT: Agencies Need to Improve the
Accuracy and Reliability of Investment
Information
08-345 OPM Improvements Needed to
Ensure Successful Retirement Systems
Modernization
guides. DoD guidance for the IBR is provided later
in this article.
EVMS Limitations
If a contractor augments its EVM processes with SE
processes, it can integrate technical, schedule, and
cost performance and overcome the following limita-
tions of the EVMS.
1. EVMS states that EV measures only the quantity
of work accomplished, not the quality. It ad-
dresses the work scope of a project but ignores
Findings and Recommendations
• EVM can have impact on acquisition
success if properly implemented
• If not implemented effectively
decisions based on inaccurate
and potentially misleading EVM
information
• Agencies not measuring actual vs.
expected performance in meeting IT
performance goals.
• EVM reporting was unreliable
because it reported program on
plan although
­– Test result had not met quality
goals
­– Lack of system maturation and
quality

Table 3: Best Practices Federal Policy on Performance Requirements and Quality.

GAO Report No. Title Findings and Recommendations
Best Practices: Best Practice Controls:
Better Support of Weapons System • Complete 90% of design drawings
06-110 Program Managers Needed to Improve • Complete subsystem and system
Outcomes design reviews
• Demonstrate with prototype that
Defense Acquisitions: design meets requirements
Major Weapon Systems Continue to • Agreement that drawings are
Experience Cost and Schedule Problems complete and producible
06-368 under DOD’s Revised Policy

Information Technology: Best Practices and Controls:

DOD’s Acquisition Policies and Guidance
Need to Incorporate Additional Best
04-722 Practices and Controls
DOD Systems Modernization:
Planned Investment Needs to Be
06-215 Reassessed
• Ensure that requirements are
traceable, verifiable, and controlled.
• Continually measure an acquisition’s
performance, cost, and schedule
against approved baselines.
Fall 2008, Issue 4
The Measurable News 9

the product scope. In comparison, the SE stan-
dards and models address the product require-
ments and require assessment of progress against
requirements, technical performance, design
maturity, and the quality of the product being
developed. The Project Management Institute
(PMI) standard, Project Management Body of
Knowledge (PMBOK® Guide) differentiates two
components of scope, product scope and project
(work) scope. The PMBOK Guide also includes
the quality baseline within the product scope and
states that the PMB may include technical and
quality parameters.
2. EVMS encourages but does not require precise,
quantifiable measures. It states that objective
earned value methods are preferred but it also
states that management assessment (subjective)
may be used to determine the percentage of work
completed. In contrast, the other standards speci-
fy objective measurement.
3. EVMS is described as a risk management tool.
However, it contains no guidelines on risk man-
agement.

Table 4: Technical Reviews.

DoD Policy or Guide Policy DAG SEP WBS IMP / IMS Integ SE
Technical Reviews:
Event-driven timing of technical reviews X X X X X X
Success criteria of technical reviews X X X X X X
Include entry and exit criteria for
technical reviews in IMP and IMS X X
Assess technical maturity in technical
reviews X X X X

Table 5: Integrated Plans and TPMs.

DoD Guide DAG SEP WBS IMP / IMS Integ SE

Integrated Plans and Technical
Performance Measures (TPM):
Integrate SEP with IMP, IMS, TPMs, EVM
X X X X

Integrate WBS with requirements specification, statement of

work, IMP, IMS, EVMS X X X

Link risk management (including risk mitigation plans),

X
technical reviews, TPMs, EVM, WBS, IMS
Flow integrated program plans down to teammates,
subcontractors, vendors, lowest level suppliers and integrate
X
across SOW, SEP, IMP/IMS, and other plans and processes to
support critical path analysis, EVM, and risk management
Include in proposal a matrix that correlates Government SEP
X
with Offeror’s integrated SEP, SOW, IMP/IMS, WBS
Use TPMs to compare actual vs. planned technical
X X X X
development and design maturity
Use TPMs to report degree to which system requirements are
X X X
met in terms of Performance, Cost, Schedule
10
The Measurable News Fall 2008, Issue 4

4. EVMS provides little guidance for specifying the IEEE 1220

types of measures that should be the base mea-
sures of EV such as TPMs and success criteria
for technical reviews.
Standards and Models
The limitations of EVMS may be overcome by in-
corporating best practices from other standards into
an organization’s EVM processes. The standards and
models include:
• Standard for Application and Management of the
SE Process (IEEE 1220)
• Processes for Engineering a System (EIA 632)
• Capability Maturity Model Integration (CMMI®)
PMBOK Guide®
• INCOSE Systems Engineering Handbook (INCOSE)
Some of the guidelines, best practices and definitions
from IEEE 1220 are in Table 6.
EIA 632
Pertinent guidelines, best practices, and definitions
from EIA 632 are in Table 7.
INCOSE SE Handbook
An important requirements management activity in
the INCOSE SE Handbook is the use of TPMs, as
summarized in Table 8.
Integrating SE with EVM
The integration of SE with EVM can be achieved
by measuring progress towards meeting the planned
quality of the product being developed and built.

Table 6: IEEE 1220.

IEEE Std 1220 Standard for Application and
Topic Management of the Systems Engineering Process
Design 6.8.1.5.a Evaluate progress and completion of technical tasks
Maturity • Provide progress measurements of design maturity:
TPM 6.8.1.5.b. TPMs are key to progressively assess technical progress.
• Track relative to time with dates established for when:
­– Progress will be checked.
­– Full conformance will be met.
• Key technical parameters are measured relative to lower-level elements of the System
Breakdown Structure by estimate, analysis, or test, and values are rolled up to the system
level.
TPM 6.8.1.5.c Cost and schedule performance measurements are integrated with TPMs to:
• Provide current schedule and performance impacts.
• Provide an integrated corrective action to variances identified.
Quality, 6.8.6 Track product and process metrics
Product Metrics are collected, tracked and reported at pre-established control points...to enable:
Metrics • Overall system quality and productivity evaluation.
• Comparison of planned goals and targets.
• Benchmarking of the Systems Engineering Plan.

Table 7: EIA 632.

Topics ANSI/EIA-632 Processes for Engineering a System
TPM 4.2.1, Requirement 5, Technical Effort Definition
• Identify and track TPMs to determine the success of the system.
Note: Project the evolution of the parameter as a function of time toward the desired value at the
completion of development….based on verification, validation, planning, or historical data.

Product 4.2.2, Requirement 10, Progress Against Requirements

Metrics Identify product metrics, and their expected values, that will affect the quality of the product
and provide information toward satisfying acquirer and other stakeholder requirements, as
well as derived requirements.
Fall 2008, Issue 4
The Measurable News
Earned value, when possible, should be based on the
sum of two measures:
• Progress towards completing the set of enabling
work products, such as drawings or code.
• Progress towards meeting the product require-
ments, including technical performance or Quality.
Product Requirements and Plan
The product scope (also called the technical or qual-
ity baseline) is bounded by product requirements. The
technical baseline should be integrated into the PMB
along with work scope, schedule, and cost objectives.
The CMMI defines requirements traceability as
the evidence of an association between a require-
ment and its source requirement, its implementa-
tion, and its verification. Requirements traceability
is maintained from a requirement to its derived
requirements as well as to its allocation to func-
tions, objects, people, processes, and work products.
Traceability should also be maintained from the
work products to the plan, including the schedule,
work packages, and planning packages.
Measure Progress
The validity of schedule and cost performance in-
formation depends on the accurate measurement of
progress towards meeting the product requirements.
However, progress towards meeting the product
requirements may not be measurable early in devel-
opment. For example, a hardware or software com-
ponent may require the completion and assembly of
many enabling work products, such as drawings or
coded software modules, before the integrated set of
work products may be tested or analyzed to determine
if it will meet the product requirements. So, until that
assembly is completed, early measurements are taken
Table 8: TPM per INCOSE SE Handbook.
TPM per INCOSE SE Handbook
• TPMs express the objective performance requirements.
• Without TPM
­– Project manager could fall into the trap of relying on cost and schedule status alone
­– Can lead to a product developed on schedule and within cost that does not
meet all key requirements.
• Periodic recording of status of each TPM
­– Provides continuing verification of degree of anticipated and actual
achievement of technical parameters.
11
of the enabling work products. Successful peer re-
views or testing are often used to determine the com-
pleteness of enabling work products against a process
quality standard. Later, measurements are taken of the
capability of the design to meet the requirements.
Of primary importance is the performance to-
wards achieving a combination of:
• Schedule objectives for enabling work products
that meet process quality objectives and
• Event-driven success criteria when the event is
meeting a measurable product requirement.
These should also become the criteria for taking
100 percent of earned value in work packages.
Risk Management
The most straightforward guidance for integrat-
ing risk management with EVM is in the PMBOK®
Guide. First, new risk management activities should
be planned, budgeted, and scheduled if they consume
resources. It is important to add the risk response
activity to the master schedule and to establish a logi-
cal link between the risk response activity and its
dependent activity on the schedule. By adding the risk
response activity to the PMB, management will use
earned value to monitor its progress.
Second, the EAC should be based on both project
performance and quantified risk assessments. This
guideline may be applied at all WBS levels. At the
project level, EAC should be based on the project
manager’s assessment of overall project perfor-
mance, including technical performance, and quanti-
fication of the impacts of top risks.
Practical Examples
This section provides practical examples of tying
earned value to technical performance:
• Ex 1: Base
EV on
completing
drawings and
meeting TPM
requirements
• Ex 2: Entry
and exit crite-
ria for techni-
cal reviews
12
The Measurable News
Ex 1: Base EV on completing drawings
and meeting TPM requirements
This example uses technical performance measure-
ment (TPM) to assess the capability of the design to
meet product requirements. TPM uses actual or pre-
dicted values from engineering measurements, tests,
experiments, models, simulations, or prototypes and
includes milestones for meeting the requirements.
The output of a work package is the design of a
component of a subsystem, a set of wire harnesses.
There are two TPM requirements that are allocated
to the wire harnesses:
• Maximum weight: 200 lb.
• Maximum diameter: 1 inch
There are two measures of progress, completing
the drawings and meeting the requirements. The
schedule is shown in Table 9:
• The budget is allocated as follows:
• Budget at Completion (BAC): 2000 hours
• Budget per drawing: 40 hours
• EV penalty if requirements not met: –300 hours
During the early periods, EV is based on tradi-
tional measures, completion of the enabling work
products (drawings). Later, when there is a milestone
to measure and achieve the technical performance
requirement, there is an EV penalty (negative earned
value) if the requirement is not met. EV is restored
when the requirement is finally met. The total possi-
ble negative earned value is –300 hours, as follows:
• Component weight requirement (req.) not met:
–100 hours
• Diameter req. not met: –200 hours
The schedule status at April month end follows:
• Cumulative (cum.) drawings completed: 41
• Diameter req. met
• Component weight req. not met
Table 9: Schedule for Drawings and Requirements.
Schedule Plan Jan. Feb. Mar. Apr.
Drawings 8 10 12 10
Requirements met:
Weight 1 1
Diameter 1 1
Fall 2008, Issue 4
Table 10, Net BCWP Based on Component Re-
quirements, shows the time-phased Budgeted Cost
for Work Scheduled (BCWS), earned value (BCWP)
based on completed drawings and negative BCWP
when the design fails to meet requirements.
Schedule variance analysis should state that al-
though the drawings are ahead of schedule (+40), the
design has not met the planned requirements (-100),
resulting in a net SV of -60. There will be an unfa-
vorable impact to both the cost and schedule objec-
tives as the drawings are reworked until the design
meets the requirements.
In Ex 1, TPMs were used to determine if the
weight and diameter requirements were met at the
component or work package level. However, perfor-
mance requirements are usually established at higher
WBS levels. If the design of a component is at the
work package level, completion of the design may
depend on achieving planned TPMs values or other
quality objectives at the higher level. In this case,
earned value for a component level work package
should be dependent on meeting both the component
and higher level objectives.
Ex 2: Entry and exit criteria for technical
reviews
An important control for ensuring integration of a
project’s technical and schedule objectives is to es-
tablish milestones for the end of a stage of develop-
ment with the right exit or success criteria. These
exit criteria should also be used for the work pack-
ages that support that milestone. This example pro-
vides guidance for defining the right exit criteria as
well as entry criteria.
Per IEEE 1220, 6.8.1.5.d, technical reviews are
conducted to:
• Assure that all master schedule success criteria
have been met
• Assess development maturity
to date
May Total • Assess the product’s ability to
10 50 satisfy requirements
• Assure traceability of require-
ments and validity of decisions
Exit criteria for preliminary de-
sign reviews (PDR) and
critical or final design reviews
(CDR) are also in IEEE 1220.
Fall 2008, Issue 4
The Measurable News 13

Table 10: Net BCWP Based on Component Requirements. EACs to variances from the plans
Design (drawings) Jan. Feb. Mar. Apr. May Total for achieving all success criteria
for technical reviews and TPM
Planned drawings 8 10 12 10 10 50
variances.
BCWS – cur. 320 400 480 400 400 2000
BCWS – cum. 320 720 1200 1600 2000 2000 Confirm Integration of
Actual drawings
Technical Performance
completed 9 10 10 12 with EVM in IBR
BCWP (drawings) – cur. 360 400 400 480 The DOD guide (Integ SE) em-
phasizes reviewing the following
BCWP (drawings) – cum. 360 760 1160 1640
during an IBR:
Negative BCWP (reqs) – • Plans for event-based technical
cum. –100
reviews including entry and exit
Net BCWP (drawings criteria and independent subject
and reqs) 1540 matter expert participation
Schedule Variance (SV) 40 40 –40 –60 • Technical tasks and products
resulting from the IMS tasks
Some of the exit criteria for a system PDR are: • Correlation of the technical metrics and mea-
• Prior completion of subsystem reviews sures, IMP/IMS, EVMS
• Total system approach to detailed design satisfies For example, the IMS should include the criteria
the system baseline for completing technical reviews and milestones for
• Unacceptable risks are mitigated measuring technical performance as well as the TPM
• Issues for all subsystems, products, and life cycle planned values to be achieved at that milestone. The
processes are resolved IMS and work packages should also include comple-
• Trade-study data are adequate to substantiate that tion of the technical baselines.
subsystem and system requirements are achievable
Manage Requirements
Better Acquisition Management
The following guidance for managing requirements
Finally, a customer can manage the acquisition of
is derived from the CMMI-Acquisition Module
a new system more effectively if it ensures that the
(CMMI-AM)
supplier’s management process and reports integrate
1. Identify inconsistencies between requirements,
technical performance, with schedule and cost perfor-
project plans and work products.
mance and focuses on the requirements and quality.
1.3 Manage changes to the requirements.
Include Performance-Based Each change to a controlled requirement should
Progress in Contract be assessed for impact to the project perfor-
The customer should initiate performance-based mance, cost, and schedule baselines. These
acquisition management by including requirements baselines should be changed, as required, to ac-
for achieving technical performance objectives in its commodate the requirements change.
contracts, beginning with the solicitation. 1.4 Maintain bidirectional traceability among the
The customer can obtain insight into earned value requirements and the project plans and work
that is based on technical performance by requiring products.
the supplier to define milestones that meet desired 1.5 Identify inconsistencies between the project
performance outcomes such as: plans and work products and the requirements.
• Success criteria for major technical reviews.
• TPM planned values and measurement milestones. Award Fee
Also, EVM variance analysis reports should relate A second component of Defense Acquisition Trans-
schedule variances, schedule recovery plans and formation is Award Fee and Incentives Policy. In April
 14
The Measurable News Fall 2008, Issue 4

2007, DOD issued a policy that award fee criteria be Conclusion

derived from contract objectives; technical/program-
matic, cost, and schedule. The policy stated that objective
criteria to measure contract performance toward these
objectives will be utilized. The previous policy memo,
issued in March 2006, stated that in situations where
there may be no identifiable milestone for a year or more,
consideration should be given to apportioning some of
the award fee pool for a predetermined interim period of
time, based on assessing progress toward milestones.
The OMB issued a policy memo in December 2007
that applies to all federal agencies. The memo stated:
• Link incentive and award fees to cost, sched-
ule, and performance results
• Use metrics that describe what is required
and at what point a contractor is considered
successful
If a company’s application of EVM effectively inte-
grates the project scope of work with cost, schedule, and
performance elements, as required by the FAR, then
earned value metrics indicate progress toward mile-
stones and toward achieving final cost objectives.
Consequently, valid earned value metrics may be used to
determine award fee. The validity of the earned value
metrics should be ensured if a company is publicly owned
and has established and maintained effective internal
controls as required by the Sarbanes-OxleyAct of 2002.
Integrating SE with traditional EVM enables the in-
tegration of a project’s cost, schedule, and technical
objectives.
• It enhances EVM’s value as a project manage-
ment tool.
• It focuses on the customer’s requirements and
needs.
• It is based on standards and models for systems
engineering and project management.
References
References and pertinent extracts of the cited guidance
are provided at www.PB-EV.com.
About the Author
Paul Solomon is a consultant and co-author of Per-
formance-Based Earned Value.® He holds a BA and
an MBA from Dartmouth College. He has led EVM
on Northrop Grumman programs including the B-2
Bomber, Global Hawk, and F-35 Joint Strike Fighter.
He is a co-author of the EVMS standard and recipient
of the DoD David Packard Excellence in Acquisition
Award. He was a Visiting Scientist at the Software En-
gineering Institute. Contact: 818.212.8462; paul.solomon@
pb-ev.com; 3307 Meadow Oak Dr., Westlake Village, CA 91361;
www.PB-EV.com (provides EVM resources and best practices).

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Fall 2008, Issue 4
The Measurable News
Continued from page 1.
plicable across all project types using EVM across
multiple industry sectors. A finding regarded as par-
ticularly significant was that CPI stabilizes by 20%
of project completion.
Lipke proposed the ES method in 2003 to provide
time based measures of schedule performance utiliz-
ing EVM data. Initial validation has shown that the
time based ES derived Schedule Performance Index
(time) (SPI(t)) to be reliable for both early and late
finish projects. For a technical description of the
ES method the reader is referred to Lipke’s seminal
paper, “Schedule is Different” [3]. For an excellent
easy to read non‑technical but comprehensive dis-
cussion of the ES method, refer to “Not Your Fathers
Earned Value” [4] by Stratton.
Following the initial validation of ES, interest
developed in ascertaining whether SPI(t) exhibited
similar stability characteristics to those extensively
reported for CPI. The objective of this research pa-
per is to reexamine CPI stability and to compare the
stability behavior of the SPI(t) with CPI.
This paper has found that while the behavior of
the SPI(t) is broadly consistent with CPI, the widely
reported CPI stability rule cannot be generalized to
all projects utilizing the EVM method or even within
the US DoD project portfolio. However, the consis-
tent behavior to CPI demonstrated by SPI(t) provides
further support for the validity of the SPI(t) metric
and the ES method.
Additional analysis was unable to establish a cor-
relation between achieving earlier CPI and SPI(t)
stability and improved outcomes at completion. In
certain cases where projects achieved either under
budget and/or early finish outcomes with cost and/
or schedule stability achieved late, earlier cost and/or
schedule stability would have been disadvantageous
to the actual final outcome(s) achieved. This is be-
cause CPI and/or SPI(t) progressively improved over
the life of those projects.
This paper also demonstrates that by utilizing ES,
research of schedule performance using EVM data is
now possible, and leading to improved understand-
ing of the dynamics of project schedule and project
cost performance.
17
Background
The CPI has long been a key indicator used to ana-
lyze the cost performance of projects using Earned
Value Management (EVM).
The first empiric confirmation of the widely re-
ported and referenced CPI stability rule was by
Christensen and Payne using data from 26 US Air
Force completed contracts in 1992. The data used
came from the cost library of the US Air Force Sys-
tems Command Aeronautical Systems Division [5].
Christensen and Templin conveniently summa-
rized the series of research findings subsequent to
that paper in 2002:
… the range of the cumulative CPI from the 20
percent completion point to contract completion
was less than 0.20 for every contract. This result
is usually interpreted to mean that the cumulative
CPI does not change by more than plus or minus
0.10 from its value at the 20 percent completion
point, and is used to evaluate the reasonableness
of projected cost efficiencies on future work. [6]
Christensen and Payne [5] made the following ob-
servations on the perceived importance of CPI stability:
• A stable CPI is evidence that the contractor’s
management control systems, particularly the
planning, budgeting, and accounting systems, are
functioning properly.
• A stable CPI may thus indicate that the contrac-
tor’s estimated final costs of the authorized work,
termed “Estimated at Completion,” are reliable.
• In addition, knowing that the CPI is stable may
help the analyst evaluate the capability of a con-
tractor to recover from a cost overrun by com-
paring the CPI with other key indicators, such as
the To-Complete Performance Index.
Over time, the widely reported CPI stability find-
ings have been generalized as being applicable to all
projects utilizing the EVM method [8] [9] [10] [11].
An extensive literature review has not found further
empiric validation of the CPI stability rule beyond
the project data obtained in the initial paper and data
from the US DoD Defense Acquisition Executive
Summary (DAES) database.
Concurrent research into the stability characteristics
of the EVM Schedule Performance Index (SPI) was not
Continued on page 19.
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Fall 2008, Issue 4
The Measurable News
Continued from page 17.
possible because the SPI is known to fail as a statistical
predictor because it always returns to unity at project
completion irrespective of duration based delay. The
SPI is also recognized as failing, nominally within the
final third of the project and also fails after the project’s
Planned Duration has been exceeded.
Lipke proposed the ES method in 2003 as a solution
to these limitations and flaws of the EVM schedule in-
dicators [3]. A series of studies provided initial valida-
tion of the ES method, some by using real EVM project
data, Henderson [12] [13] [14] and Vandevoorde and
Vanhoucke [15] and also by using simulated network
schedules, Vanhoucke and Vandevoorde [16]. The time
based ES derived SPI(t) has been shown to be reliable
for both early and late finish projects. The SPI(t) only
reverts to unity at project completion if on time com-
pletion has been achieved.
A research study intended to validate the ES con-
struct using DAES data was commissioned in 2004 and
undertaken by a US Air Force Institute of Technology
Masters student. Unfortunately, this study was discon-
tinued after an independent review determined:
Results: The historical data collection procedures
for the DOD and USAF do not allow for sufficient
testing of ES theory at this time. A statistical evalu-
ation concluded that SPI(t) is different than SPI($);
however, the two variables are highly correlated.
The result of the analysis identified that SPI(t) per-
forms similarly to SPI($) with the data contained in
the DAES database. In order for the ES Theory to
be fully investigated, additional data must be col-
lected. This research shows that the necessary data
may also not be available despite the best collection
efforts. The original schedule and planned duration
information is critical to successful evaluation of the
ES methodology. [17]
However, early interest by the Project Management
Institute College of Performance Management resulted
in the principles of ES being included as an “Emerg-
ing Practice Insert” in the Practice Standard for Earned
Value Management published in 2004. [18]
Following the initial validation of ES, interest de-
veloped in ascertaining whether the SPI(t) exhibited
similar stability characteristics to those extensively
3
Applying the Sign Test at the 0.05 level of significance means that the test is being applied at a 95% level of confidence.
19
reported for the Cost Performance Index. The objec-
tive of this research paper is to reexamine Cost Per-
formance Index stability and to compare the stability
behavior of the SPI(t) with CPI.
Method for Evaluating Stability
EVM project data was loaded into a Microsoft Excel
“Stability Point Calculator” developed by Lipke. The
calculator determines the observation number in a
sequence of CPI and SPI(t) values at which all sub-
sequent observations are within a defined stability
limit. The stability limit used is .10. The calculator
enables the associated percentage complete at which
stability occurs to be determined.
This calculator has been placed into the public
domain to encourage more broadly based CPI and
SPI(t) stability research and is freely available from
the ES website at http://www.earnedschedule.com/
Calculator.shtml.
To determine the significance of the observations
of stability for both CPI and SPI(t), statistical hy-
pothesis testing is conducted. The test applied is the
Sign Test at 0.05 level of significance3 [19]. The Sign
Test was used in this research because it does not
depend upon the data having a normal distribution.
In past research, the hypothesis test method chosen
implied that the data was normally distributed; how-
ever, the normality of the data was not established.
Research by Lipke also suggests that:
Results indicate the logarithm data representations of
the indexes are likely normally distributed, whereas the
distributions for CPI, SPI, and CV are not. [20]
The question to answer regarding stability is “Can
it be stated generally and reliably that the final value
of the performance index is within 0.10 of its value
when the project is 20 percent complete?” The an-
swer to the question will be “yes” if the alternate
hypothesis is satisfied:
H1(CPI): |CPI(final) – CPI(20%)| < 0.10
H2 (SPI(t)): |SPI(t)(final) – SPI(t)(20%)| < 0.10
Two separate hypothesis tests are conducted, one
for CPI and one for the SPI(t). The result from the
hypothesis testing is recorded as Ha when the value
of the test statistic is in the critical region (0.05) and
Ho (null hypothesis) when it is not.
20
The Measurable News Fall 2008, Issue 4

The Data Stability Evaluation Results

A composite EVM data set was assembled compris-
ing commercial sector data samples obtained from:
• 24 United Kingdom (UK) construction projects
• 12 Israeli High Technology (Hi-Tech) projects
• 9 Australian Information Technology (IT) projects.
The EVM data consists of direct labor costs only with:
• UK construction projects recorded in “person
days” weekly with EVM values expressed as a
percentage of the Budget at Complete to further
maintain data anonymity,
• Israeli Hi-Tech projects recorded in United States
dollars monthly, and
• Australian IT projects recorded in Australian dol-
lars weekly.
An extensive review of the data was undertaken.
Projects were excluded from the sample for a variety
of reasons including:
• Lack of data integrity,
• Lack of Earned Value data at 20% of project
completion,
• Partially incomplete Planned Value data, and
• Lack of required Actual Cost data.
Ten UK Construction projects are included in the
CPI stability research sample. Five of these proj-
ect were included although the
final Actual Cost data available Table 1: Hypothesis Test Results.
was between 96.7% to 99.0%
complete. Including those five
projects is consistent with the ap-
UK
proach adopted by Christensen Construction
and Payne’s research [5] and as-
Australian IT
sumes that the difference between
CPI Final and the latest available Israeli Hi Tech
The results of the Sign Tests for testing the hypoth-
esis “can it be stated generally and reliably that the
final value of the performance index is within 0.10 of
its value when the project is 20 percent complete?”
as previously described are tabulated in Table 1 be-
low. Recall, the test result of Ha indicates stability of
the performance indicators CPI and the SPI(t). As is
shown, the test results did not have any test statistic
in the critical region (0.05). As a result, none of the
null hypotheses can be rejected, for any of the three
samples as well as the composite of all samples. This
means that stability was not achieved for either CPI
or the SPI(t) by the time the project was 20 percent
complete.
This research does not support the previously ref-
erenced generalizations that the CPI stability rule has
universal applicability for all projects utilizing the
EVM method. Because the SPI(t) index demonstrates
a similar lack of stability to that found for CPI, the
validity of the SPI(t) metric is supported due to the
consistent behavior demonstrated with CPI.
Table 2 summarizes the raw data in relation to the
numbers of projects that achieved stability before or
after 20% completion for the SPI(t) and CPI by each
CPI Stability SPI(t) Stability
Test Statistic Test Result Test Statistic Test Result
0.623 Ho 0.748 Ho
1.000 Ho 0.500 Ho
0.806 Ho 0.613 Ho

CPI has no material impact on the Composite 0.916 Ho 0.629 Ho

findings.
The outcome was a usable data
Table 2: Summary of Stability Achievement Related to 20% Completion.
sample of
• Twelve Israeli Hi-Tech proj- Stability UK Australian Israeli
Achieved Construction IT HI Tech Composite
ects for the SPI(t) and CPI
stability research SPI(t)
cum ≤ 20% 3 0 1 4
• Twenty UK construction proj-
ects for the SPI(t) stability and > 20% 17 5 11 33
ten for CPI stability research CPI
• Five Australian IT projects for cum ≤ 20% 2 0 1 3
the SPI(t) stability and four > 20% 8 4 11 23
for CPI stability research.
Fall 2008, Issue 4
The Measurable News
project set and for the composite of all. It can be
seen that the majority of projects reach stability only
after the 20% completion point.
Figure 1 summarizes within each 10 percent com-
plete percentile band where CPI and the SPI(t) sta-
bility occurred. This figure shows:
• The wide variability in the achievement of stabil-
ity for both CPI and the SPI(t).
Project performance heuristics or “rules of
thumb” intended to be generally applicable (e.g.,
the CPI stability rule) require an empirically es-
tablished consistency of behavior across a broad
range of projects. These findings are a significant
impediment to proposing and confirming broadly
applicable CPI and SPI(t) stability heuristics.
• That stability is usually achieved very late in the
project lifecycle, often later than 80% complete
for projects in these samples.
Zwikael et al. analyzed the Israeli hi‑tech project
sample using visual inspection of charts and suggest-
ed that CPI stability was, on average, achieved at the
60% completion point [21]. That analysis broadly
confirms this paper’s finding of CPI stability being
achieved much later in the project lifecyle than pre-
viously reported.
Figure 1: Total Projects CPI and SPI(t) Stability Within Each 10 Percentile Band.
21
Additional Analysis
Following the lack of CPI and SPI(t) stability find-
ings additional analysis was conducted. Within each
10% complete percentile bands projects were catego-
rized as follows:
• Cost at completion:
o Under or On Budget (UOB)
o Over Budget (OvB).
• Schedule at completion:
o Early or On Time finish (EOT)
o Late Finish (LF).
The purpose of this analysis is to determine if there
is a correlation between achieving earlier CPI and the
SPI(t) stability and improved project outcomes.
Figure 2 summarizes the analysis for CPI and
Figure 3 does the same for the SPI(t). With the data
samples utilized, achievement of earlier stability is
not correlated with improved final cost and/or sched-
ule outcomes.
For UOB and EOT projects where cost and sched-
ule stability was achieved late (after say 60% com-
pletion) achieving earlier stability would have been
disadvantageous to the final outcome(s) achieved
because project performance progressively improved
over the life of those projects.
!
22
The Measurable News Fall 2008, Issue 4

!
Figure 2: Project Completion Categories by CPI Stability Band.

!
Figure 3: Project Completion Categories by SPI(t) Stability Band.
Fall 2008, Issue 4
The Measurable News
Figure 4 summarizes projects (with the required
comparative data), which achieved SPI(t) or CPI
stability first. Achieving SPI(t) stability first implies
schedule management had a higher management pri-
ority, achieving CPI stability first implies cost man-
agement had the higher priority.
In the Australian IT projects sample, SPI(t) sta-
bility was achieved first for the preponderance of
projects. For the other data samples the achievement
of cost or schedule stability first occurred in rough-
ly equal proportion. In only one project in these
samples, an Australian IT project, was the cost and
schedule stability achieved simultaneously.
Corroboration with Other Research
Because of the comprehensive contradiction to the
previously published CPI stability research findings,
a further literature review was undertaken. This
review obtained a most unexpected source of inde-
pendent corroboration for this paper’s CPI stability
findings. In the mid 1990s Mr. Michael Popp initi-
ated an internal US DoD research project within the
US Naval Air Systems Command (NAVAIR).
The output was an internal but unclassified NA-
VAIR report (the Popp report) which has, with Mr.
Popp’s permission, now been placed into the public
Figure 4: Summary of Projects Achieving SPI(t) or CPI Stability First.
Post publication note: It is now known, thanks to a post publication correction to the paper that the “DAES and CAS are the same
4
database under different names”.
23
domain on the PMI Sydney Chapter website. [22]
The purpose of the Popp study was to develop prob-
ability distributions of cost Estimates at Complete
(EACs) based on the CPI at complete, current CPI
and percentage complete of projects based on his-
tory. As stated in the report:
Given a program has a CPI of X and a percent com-
plete of Y, what is the most likely finishing CPI. [22]
In contrast to Christensen and associates research,
which used data from the DAES database, the data
used by Popp was sourced from the Contracts Analy-
sis System (CAS) database maintained by the Office
of the Secretary of Defense Cost Analysis Improve-
ment Group (CAIG).4
The research undertaken by Popp did not focus
on CPI stability. However, charts which can also be
used for assessing CPI stability were completed as
part of that study. These charts correlate the cumula-
tive CPI for the percentage complete in each 10%
complete percentile band to the CPI Final for all
projects in that sample.
Figure 5 is the first chart of interest from the Popp
report, as it shows the correlation between the cumu-
lative CPI at 10–20% complete and the CPI Final for
all projects in the sample.
!
!
24
The Measurable News Fall 2008, Issue 4

The area of the chart enclosed

within the dashed lines bounds the
area in which the correlation plots
must occur for the Christensen de-
rived CPI stability rule to apply.
Those plots which occur outside
the enclosed area are also in con-
flict with the Christensen derived
CPI stability rule. The limited data
samples used in this analysis are suf-
ficient to show that the CPI stabil-
ity rule cannot be generalized even
within the US DoD project portfolio.
While research by Coleman et.
al. [23] using the Popp report data
sample was not principally directed
at examining the validity of the Figure 5: Correlation between Cumulative CPI at 10-20% Complete
and Final CPI (Popp)
CPI stability rule this research !
found that for:
• Development programs “at 20%
(completion) , programs with a cu-
mulative CPI below 0.89 improve”
which was “close to Christensen,
(findings) but with some excep-
tions”
• Production programs “at 20%
(completion), programs with
a cumulative CPI below 0.84
improve, again “close to Chris-
tensen, (findings) but with some
exceptions”.
Using the “enclosure” technique,
Figure 6 shows that the preponder- Figure 6: Correlation between Cumulative CPI at 70-80% Complete
ance of plots, occur within the area and Final CPI (Popp)
!
where the CPI stability rule applies
at 20% completion. The conclusion is that for the US does not significantly improve during the period
DoD project data used by Popp, CPI stability was also between 15% and 85% of contract performance; in
achieved very late in the project lifecycle, often as late fact, it tends to decline. [1]
as 70-80% completion. This finding is consistent with Some projects in the Popp sample show a trend of
the late CPI stability findings for the commercial sector CPI performance improvement, from CPI 20% and
project samples as shown in Figure 1. in a smaller number of cases, as late as CPI 80% to
While the underlying data was not available and CPI Final.
further research is required, these findings also con-
flict with the US DoD research findings quoted in
Summary and Conclusions
The initial objective of this paper, ascertaining
the Beach report into the A-12 cancellation that:
whether the SPI(t) demonstrates similar stability
DOD experience in more than 400 programs since
characteristics to those extensively reported for CPI
1977 indicates without exception that the cum CPI
Fall 2008, Issue 4
The Measurable News
was not achieved. This paper has found that while
the behavior of the SPI(t) is broadly consistent with
CPI, the widely reported CPI stability rule cannot be
generalized to all projects using the EVM method or
even within the US DoD project portfolio. However,
the consistent behavior to CPI demonstrated by the
SPI(t) provides further support for the validity of the
SPI(t) metric and the ES method.
Additional analysis was unable to establish a
correlation between achieving earlier CPI and the
SPI(t) stability and improved outcomes at comple-
tion. In cases where projects achieved either under
budget and/or early finish outcomes with cost and/
or schedule stability achieved late (ie. after say 60%
completion), earlier cost and/or schedule stability
would have been disadvantageous to the actual final
outcome(s) achieved. This is because CPI and/or the
SPI(t) were progressively improving over the life of
those projects.
The findings and corroboration of this paper require
significant review and revision to what has been re-
garded as a long settled EVM heuristic with regard
to CPI stability and consequent practice including the
use of a stable CPI as evidence that an EVM system is
functioning properly and of a “reliable” EAC. [5]
Improvements to current EVM techniques for
predicting future cost performance should be con-
sidered as current techniques have relied on general-
izing research findings from limited data sources,
principally the DAES database.
Alternatives methods of cost and schedule predic-
tion using well-established statistical principles and
methods developed by Lipke show promise as:
• These techniques allow generation of a range of
cost and schedule predictions from user defined
Confidence Limit(s)
• All information and data required for these pre-
dictions comes from within the project itself.
This may reduce the current dependence on
heuristics developed from external project data
sources, which might not be applicable to the
project of interest.
To promote trials of these statistical prediction
techniques, a Microsoft Excel “Statistical Prediction
Calculator” is also freely available from the ES web-
site at www.earnedschedule.com/Calculator.shtml.
An academic paper fully describing the statistical
25
prediction techniques and the supporting rationales
is “pending publication” as at 12th September 2007
[24]. The statistical prediction techniques developed
have been summarized in a presentation by Hender-
son [25] which is available on the website.
A major advance to EVM practice and future
research opportunities would be development of a
broadly based EVM research database where com-
pleted EVM project data could be submitted anony-
mously for:
• Research purposes
• Benchmarking completed project performance
• Assisting in the sizing of projects.
Such knowledge bases are not unique in other disci-
plines, with an instructive Australian example being the
International Software Benchmarking Standards Group
(ISBSG), website at www.isbsg.org.
Improved data collection techniques to ensure that
baseline schedule information is captured and stored
in the DAES database are also recommended.
Concluding Remarks and Future
Research
While this paper has overturned long-standing find-
ings and belief on CPI stability, it is important that
the strengths and limitations of the EVM method are
properly understood, particularly in an era of:
• Adoption of EVM by US Government agencies
through Office of Management Budget Circular
A-11 Part 7 mandate
• Advocacy of the use of EVM cost predictors to
assess compliance to the Sarbanes Oxley Act [9]
• Increased interest and the adoption of EVM by
organizations globally.
Where projects have not exhibited “CPI stability”
EVM practitioners can now know that this is neither
unique, nor is it necessarily an adverse reflection on
the management or execution of those projects.
Various follow‑on research opportunities arise from
this paper, which may develop improved understanding
of project performance characteristics and generalisable
heuristics. Suggestions include examining the perfor-
mance characteristics of projects where:
The CPI stability rule does seem applicable ( e.g.,
the subset highlighted in the Popp report data) to
determine whether there are project characteristics
which result in early CPI stability
26
The Measurable News
Early CPI stability was not achieved due to pro-
gressively improving CPI performance over the proj-
ect lifecycle.
Academically oriented research aimed at estab-
lishing a theoretical rationale for project perfor-
mance instability would be another useful addition to
the project management body of knowledge.
While Coleman et. al. [23] provide the sobering
assessment that consistent with Christensen’s find-
ings “average to good programs do not improve”,
an understanding of project characteristics, which
result in progressively improving CPI would, if these
characteristics could be emulated in other programs,
be an extremely useful advance to practice. Such
research could offer significant opportunities for tan-
gibly improving project performance.
Research opportunities are equally applicable
to project schedule performance. This paper also
demonstrates that by using ES, research of schedule
performance using EVM data is possible and already
leading to improved understanding of the dynamics
of project schedule and project cost performance.
Acknowledgements
This research has been made possible due to the gen-
erous assistance of the following individuals:
• The Project Controls Manager from the United
Kingdom based construction company (who
desire anonymity) for making available the UK
construction projects EVM data
• Mr. Michael Popp of NAVAIR for making avail-
able the “Popp report” and providing permission
for the report to be placed in the public domain
on the PMI Sydney Chapter website.
The support, suggestions, general assistance, and
review comments by the ES advocates and research-
ers, which significantly improved this paper is also
appreciated. Responsibility for any errors, omissions
or erroneous conclusions remains the sole responsi-
bility of the authors.
References
Beach, Chester Paul Jr. “A-12 Administrative Inquiry.
Report to the Secretary of Navy” Department of the
Navy, Washington DC, 1990.
http://www.suu.edu/faculty/christensend/evms/beacha-1.pdf
(12 Sep 2007)
Fall 2008, Issue 4
Christensen, David S, PhD., “Using the Earned
Value Cost Management Report To Evaluate The
Contractor’s Estimate at Completion”, Acquisition
Review Quarterly, Summer 1999: 283:295.
http://www.dau.mil/pubs/arq/99arq/chrisevm.pdf
(26 Nov 2007)
Lipke, Walt. “Schedule is Different,” The Measurable
News, 2003, March: 10–15.
http://www.earnedschedule.com/Docs/Schedule%20
is%20Different.pdf (12 Sep 2007)
Stratton, Ray. “Not Your Father’s Earned Value,”
Projects@Work, (www.projectsatwork.com), 2005,
Feb 24
http://www.earnedschedule.com/Docs/Not%20Your%20
Father%27s%20Earned%20Value.PDF
(14 Nov 2007)
Christensen, David S., Payne, Kirk. “Cost Performance
Stability — Fact or Fiction?,” Journal of
Parametrics, (April 1992): 10:27–40.
http://www.suu.edu/faculty/christensend/evms/
CPIstabilityJP.pdf (12 Sep 2007)
Christensen, David S. PhD., Templin, Carl. PhD.
“EAC Evaluation Methods: Do They Still Work?,”
Acquisition Review Quarterly, Spring 2002: 105:116.
http://www.suu.edu/faculty/christensend/evms/
eacevalmethods4.pdf (12 Sep 2007)
Christensen, D. S., Heise, S. R. “Cost Performance Index
Stability,” National Contract Management Journal,
Vol 25, (1993): 7–15.
http://www.suu.edu/faculty/christensend/evms/
CPIstabilityNCMJ.pdf (12 Sep 2007)
Fleming, Quentin., Koppelmann, Joel. The Earned Value
Body of Knowledge. Proceedings of the 30th Annual
Project Management Institute 1999 Seminars and
Symposium. Philadelphia, Pennsylvania, USA
Fleming, Quentin, Koppelmann, Joel. “Sarbanes‑Oxley:
Does Compliance Require Earned Value Management
on Projects,” Contracts Management, April 2004
26:28
Fleming, Quentin., Koppelmann, Joel. “If EVM is Good
… Why Isn’t it used on all Projects?,” Contracts
Management, April 2004:26–28
http://www.suu.edu/faculty/christensend/evms/WhyEVM.pdf
(12 Sep 2007)
Fleming, Quentin, & Koppelman, Joel. Earned Value
Project Management. 3rd ed. Upper Darby, PA:
Project Management Institute, 2005
Henderson, Kym. “Earned Schedule: A Breakthrough
Extension to Earned Value Theory? A Retrospective
Analysis of Real Project Data,” The Measurable
News, 2003, Summer: 13–23.
http://www.earnedschedule.com/Docs/Earned%20
Schedule%20-%20A%20Breakthrough%20
Extension%20to%20EVM.pdf (12 Sep 2007)
Fall 2008, Issue 4
The Measurable News
Henderson, Kym. “Further Developments in Earned
Schedule,” The Measurable News, 2004, Spring, 15-22.
http://www.earnedschedule.com/Docs/Further%20
Developments%20in%20Earned%20Schedule.pdf
(12 Sep 2007)
Henderson, Kym. “Earned Schedule in Action,” The
Measurable News, 2005, Spring: 23–30.
http://www.earnedschedule.com/Docs/Earned%20
Schedule%20in%20Action.pdf (12 Sep 2007)
Vanhoucke, Mario, Ph. D, Vandevoorde, Stephan.
“A Comparison of Different Project Duration
Forecasting Methods Using Earned Value Metrics,”
International Journal of Project Management,
Volume 24, Issue 4 (May 2006): 289–302.
Note: This paper is available on-line at a cost of $USD 30
from Science Direct at: http://www.sciencedirect.com/
Vanhoucke Mario, Ph.D, Vandevoorde, Stephan. “A
Simulation and Evaluation of Earned Value Metrics
to Forecast Project Duration,” Journal of Operational
Research Society, Volume 58: 1361–1374, Issue
10 (October 2007); advance online publication, 13
September, 2006
Note: This paper is available on-line at a cost of $USD
10 at: www.palgrave-journals.com
Attachment to e-mail from Ed Witte, SAF/AQX to Walt
Lipke dated 15th April 2005, “An analysis of the
Schedule Performance Index (SPI) in units of time:
Overcoming the SPI($) limitations to accurately
portray schedule” performance.
Note: Summary of review findings leading to cancellation
of AFIT research project into the Earned Schedule
method.
Project Management Institute. Practice Standard for
Earned Value Management. Project Management
Institute 2004.
National Institute of Standards and Technology Dataplot,
2005. Sign Test.
http://www.itl.nist.gov/div898/software/dataplot/refman1/
auxillar/signtest.htm (12 Sep 2007)
Lipke, Walt. “A Study of the Normality of Earned Value
Management Indicators,” The Measurable News,
2002, December: 1–16.
http://sydney.pmichapters-australia.org.
au/programs/customer/v_filedown.
asp?P=31&FID=89297847&FRF=n& (12 Sep 2007)
Zwikael, Ofer, et al. “Evaluation of Models for
Forecasting the Final Cost of a Project,” Project
Management Journal, Volume 31, Number 1 (March
2000): 53–57.
Popp, Michael. “Probability Distributions of CPI at
Complete vs. CPI Today”, Internal NAVAIR Report,
Unpublished, 1996.
27
http://sydney.pmichapters-australia.org.
au/programs/customer/v_filedown.
asp?P=31&FID=738016087&FRF=n& (12 Sep
2007)
Coleman et al., “Predicting Final CPI”, Presentation
to the 4th Joint Annual ISPA/SCEA International
Conference, Orlando, Florida USA, June 2003
Lipke, Walt, et al., “Prediction of Project Outcome - The
Application of Statistical Methods to Earned Value
Management and Earned Schedule Performance
Indexes,” Publication pending.
Henderson, Kym. “Recent Advances in Project Prediction
Techniques”, Presentation to the IQPC IT Project
Management Conference, Sydney Australia, 1 May
2007.
http://www.earnedschedule.com/Docs/Recent%20
Advances%20in%20Project%20Prediction%20
Techniques.pdf (12 Sep 2007)
About the Authors
Kym Henderson is a practicing information tech-
nology project manager with significant experience
in project recoveries utilizing simplified EVM tech-
niques. He has a Bachelor of Business and a Master
of Science (Computing) from the University of Tech-
nology, Sydney. Kym has presented at many confer-
ences internationally and published papers in various
publications and as proceedings of PMI Global Con-
gresses. He published the first independent validation
of the Earned Schedule method in 2003. Kym is the
Immediate Past Education Director (2003–2007) of the
PMI Sydney Chapter and is the first non-US national
elected to the board of the PMI College of Performance
Management commencing office as Vice President of
Research and Standards on 1 January 2008.
Dr. Zwikael is a senior lecturer at the Victoria
Management School, Victoria University of Welling-
ton, New Zealand. He also leads projects and pro-
gram groups in dozens of organisations, in Asia and
Europe. Ofer is an accredited PMP, has acted for two
years as a vice president in the Executive Board of
the PMI’s Israeli chapter, and is currently a Director
at the New Zealand PMI Executive Board.
28
The Measurable News Fall 2008, Issue 4

The Trouble with Earned Schedule

By Wayne Abba

Abstract
“Earned Schedule,” touted as a major new extension of the EVM methodology, is neither new
nor profound. Through personal experience and the simple methods developed by Army EVM analysts in
the 1970s, I describe the origins of earned schedule and address errors in recently published literature that
purports to have overturned longstanding findings related to EVM data stability.

T
he Earned Value Management world has been
abuzz with papers and presentations touting
the concept of “earned schedule” (see www.
earnedschedule.com for a description of the
technique). As a past president of PMI-CPM in 2004,
I became personally involved when I helped forge
a compromise in the PMI “Practice Standard for
Earned Value Management” between earned sched-
ule proponents and skeptics. The standard intro-
duced “Time-Based Schedule Measures” (now called
earned schedule) as “an emerging EVM practice”
rather than giving it the endorsement that was sought
by its more enthusiastic supporters. The compromise
was meant to allow time for research to demonstrate
its value.
Any such compromise involves give and take. I
overcame personal misgivings resulting from more
than three decades of EVM analysis experience
because I thought earned schedule showed promise
based on limited statistical results that conceivably
might be demonstrated through more extensive re-
search. That hoped-for result has not been achieved.
Nevertheless, the advocacy not only continues but
now includes challenges to established EVM princi-
ples. This article addresses three things about earned
schedule that I find troubling: First, it’s not new.
Second, it’s not profound. Third, its proponents are
running roughshod over well-grounded research.
Earned Schedule Isn’t New
I learned about earned schedule soon after joining
the Army Materiel Command headquarters staff
as an EVM analyst in the late 1970s. My office
prepared independent assessments of monthly con-
tractor cost performance reports for the Command
Group. Because we didn’t have access to schedule
information, the analysis branch chief, Emil Szten,
developed an algorithm to approximate schedule
status based on monthly reported EVM data. While
this was some 30 years ago, I would not be surprised
were I to learn that someone else had tripped to the
obvious connection even earlier, as EVM at that
point already was ten-year-old DoD policy.
Earned Schedule Isn’t Profound
Emil’s algorithm was simple. We calculated the aver-
age amount of work planned to have been performed
each week during a given period by dividing the
planned value for the period by the number of weeks
in the reporting period (typically four per month —
the number of months used would be based on such
factors as how stable the planned value was over the
period). We then divided the cumulative schedule
variance by the average planned value per week to
derive the approximate number of weeks the vari-
ance represented from the plan. From there it was a
simple step to relate the variance in weeks to the per-
cent complete (cumulative earned value divided by
budget at completion) and estimate the completion
date. Our report to the Deputy Commanding General
might say, for example, “This contract is about one-
third complete and about four weeks behind sched-
ule. If there are no improvements in performance, it
will complete at least twelve weeks later than
planned.”
We couched our analyses carefully because we
understood the limitations of EVM-based schedule
data. Even the name is a misnomer — a schedule
variance is actually an accomplishment variance
that measures any difference in the volume of work
performed relative to the plan. If resources in the
performance measurement baseline are planned
unrealistically, variance calculations may be mis-
leading. The variance doesn’t necessarily reflect the
 Fall 2008, Issue 4
The Measurable News 29

critical path. And it will be zero at project comple-
tion, no matter how late the work actually is com-
pleted. These limitations are more than offset by its
proven value as an early warning indicator when
work is not being accomplished — but as my former
Pentagon boss Gary Christle says, “if you want to
understand the schedule — look at the schedule, not
at EVM data.”
That said, the schedule variance is derived from per-
formance against a time-phased resource consumption
baseline linked to the schedule. It should be no surprise
that the information will correlate tightly with the proj-
ect schedule… it would be a problem if it did not. But
correlation neither elevates earned schedule to a sci-
ence nor improves its management utility beyond the
intuitive, simple calculations we did at Army to give
the senior leadership a heads-up.
Earned Schedule Proponents
Misunderstand EVM Research
An April 2008 article published in CrossTalk, the
Journal of Defense Software Engineering, by Kym
Henderson and Ofer Zwikael titled “Does Project
Performance Stability Exist? A Re-examination of
CPI [Cost Performance Index] and Evaluation of
SPI(t) [an earned schedule metric — Schedule Per-
formance Index (time)] Stability” (see http://www.
stsc.hill.af.mil/crosstalk/2008/04/0804HendersonZ
wikael.html) had as an objective “to reexamine CPI
stability and to compare the stability behavior of the
SPI(t) with CPI.” The authors’ conclusion that “the
widely reported CPI stability rule cannot be general-
ized to all projects using the EVM method or even
within the DoD project portfolio” is based on de-
monstrably faulty research.
The definitive research on CPI stability was per-
formed by graduate students at the Air Force Insti-
tute of Technology under the guidance of Dr. David
Christensen. As the senior EVM analyst in the Office
of the Secretary of Defense in the 1990s I made the
Defense Acquisition Executive Summary (DAES)
database available to many researchers including
Dr. Christensen and his students and sponsored their
research. The DAES database included quarterly

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30
The Measurable News
summary EVM data on all major defense contracts
that were subject to oversight by the Office of the
Secretary of Defense. The resulting theses and ar-
ticles constitute an unparalleled body of knowledge
grounded in actual, verifiable performance data from
hundreds of defense contracts for weapon systems,
vehicles, ships, airplanes, information technology
and more.
Henderson and Zwikael cite “an internal DoD
[Naval Air Systems Command] research project”
from the mid-1990s and state “In contrast to Chris-
tensen and associates research, which used data
from the DAES database, the [NAVAIR] data was
sourced from the Contracts Analysis System [CAS]
database...” They are mistaken; DAES and CAS
are in fact the same database under different names,
now part of the “Defense Acquisition Management
Information Retrieval (DAMIR)” system. Ironically,
my office maintained the database and would have
provided access to the NAVAIR staff.
In 1993, building on earlier work, Christensen
and Captain Scott Heise published their benchmark
paper “Cost Performance Index Stability” in the Na-
tional Contract Management Journal. They analyzed
data from 155 defense contracts that met EVM re-
quirements and distinguished between contracts hav-
ing stable and unstable performance measurement
baselines. Henderson and Zwikael fail to note that
the NAVAIR study did not use comparable criteria to
select contracts from the same source data. Nor did
it need to — it was performed for different reasons.
There is no way to determine the extent of overlap
with the Christensen-Heise research or to compare
results.
Henderson and Zwikael also include information
on 37 foreign projects: twelve “hi-tech” (unspeci-
fied) projects from Israel, twenty construction proj-
ects from the United Kingdom and five IT projects
from Australia. Of the 37, only 24 were deemed
usable for CPI stability research. They offer no
evidence that these disparate projects implemented
EVM consistently, as on DoD contracts, and their
analysis lacks rigor. For example, Israeli data were
analyzed “using visual inspection of charts.”
Henderson and Zwikael claim to have “overturned
longstanding findings and beliefs on CPI stability.”
That claim does not withstand scrutiny. Christensen
et al have shown that CPI stability as they defined
Fall 2008, Issue 4
it exists on DoD contracts. Whether the oft-quoted
“rule” derived from their work is true in other man-
agement environments is unknown, but the article
does not make a case for refuting it “within the DoD
project portfolio.”
On the other hand, given the fifteen years since
Christensen’s work was published, one might hy-
pothesize that defense project managers and their
contractors have learned how to keep their contracts
off overseers’ radar through adroit baseline manage-
ment. Any reexamination of CPI stability must take
that into consideration because increasing the budget
base is the easiest way to remain (or get back to)
“green.” Not that I’m advocating such a reexamina-
tion ­— the literature stands on its merits and has
made an enormous contribution to improving US
government program management.
Perhaps the larger issue is how our community
should respond to inadequate research. Lacking a
journal of our own, College of Performance Man-
agement members who wish to be published must
go elsewhere, where peer reviews for our special-
ized discipline may not meet our desired standards.
The CrossTalk article undoubtedly will be cited as
gospel, given one co-author’s identification with the
College. And that’s a shame.
As for earned schedule, I believe it’s time to take it
out of the “emerging practice” box in the practice stan-
dard. It should be recognized for what it’s been for at
least thirty years — a quick and easy sanity check for
comparison with project schedule analysis. Nothing
less — but nothing more until proved otherwise.
About the Author
Wayne Abba retired in 1999 as
the Office of the Secretary of
Defense’s Senior Analyst for con-
tract performance measurement.
He is an independent consultant
specializing in EVM in the pub-
lic sector. He is past president
(2001–2002) of PMI-CPM and a
contributing author of the forthcoming GAO Cost


Estimating and Assessment Guide: Best Practices
for Developing and Managing Capital Program
Costs and of chapters 7 (“Project Cost Manage-
ment”) and 12 (“Procurement Management”) of the
PMBOK® Guide — 4th edition update.
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32
The Measurable News Fall 2008, Issue 4