Project Rules for Claiming Earned Value Credit

There are three rule systems generally applied to earned value systems: (1) all or nothing, such as was applied in the bicycle project example; (2) some number of discrete steps like 0, 50, or 100%; and (3) continuous estimates of credit from 0 to 100% complete with any number in between being acceptable. Practice has shown that the continuous method dilutes the value of the earned value method since the tendency to be "90% complete" for most of the timeline is very prevalent.

Of course it is not enough to simply have a rule without also considering when a work package task begins and ends. When does the clock begin running and the expenses start accumulating for the actual cost, and, just as important, when does the accumulation of expenses end so that a variance can be calculated? Just looking at the project network diagram to find the task dependencies may not be enough, though the network diagram is the place to start. Table 6-5 offers a few definitions that are helpful in establishing the earned value measurement system.

Table 6-5: Earned Value Claim Rules

Claim Parameter

Application

Explanation

Task started

Time-Centric Earned Value

Predecessor events that establish the prerequisites of the task are done and the current task has begun expending effort.

Task completed

Time-Centric Earned Value

All work necessary to complete the successor dependencies is complete and the business value of the task is accomplished.

All work performed

EAI Standard Earned Value

All work necessary to complete the successor dependencies is complete and the business value of the task is accomplished.

Partial credit for work performed

EAI Standard Earned Value

All work necessary to meet the standing criteria for partial credit is complete and the business value of the task up to the partial complete level is accomplished.

Standard units of work

Either Earned Value System

A "standard" unit of work measured in business value such that each WBS work package is measured in so many standard units. Earnings accrue for each unit completed.

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