As you may have seen this week, you can see how your cost is aligning with budget and estimated cost using the techniques learned this week. However, though this may seem obvious, the tasks distributed throughout the project do not have a uniform cost and using EV in projects with highly skewed cost distributions will results in either false "under budgets" or "over budgets" because either a majority of the costs have yet to come or they have already passed. This is one of the many situations where statistics can be used to show something that is not representative of the actual situation or does not take into account all the key factors but it mathematically and statistically sound. If you are receiving/reviewing any information in statistical form, understanding/looking at the inputs of the statistics and the "raw" data is always a good practice on a periodic basis especially if that data will drive future decisions regarding the project. "Fudging" data occurs more often than you think and as a PM you need to be vigilant.
I disagree with this a bit. It's true earned value could be skewed, but it should also not be used by itself. It should be presented along with other values to get a complete picture of the health of a project. EAC, ETC, BAC, PV, AC should also be presented. Additionally any value that is significantly below or above expected should have an explanation presented as well. By presented a complete picture of facts and values associated with a project, the management and sponsors can make better decisions regarding the project.
I’m with ks629 on this one. EV is only one part of the project and represents only one aspect of it. Any EV estimate whether under budget or over budget will need to be accompanied by something to back it up and see where the estimates are coming from. By understanding where the origins of the estimate are coming from then you as a project manager will be able to make better decisions on how the project should proceed. However, again all accounts of the project should be taken into account and not just one aspect like EV.
I agree with what was said above. The earned value is a good estimate when the other values are also being taken into consideration. The earned value and planned value are values to be used in theory. For example, when you are 3 months in the value should be a certain amount that is not related to budget but to what your project is supposed to be. Earned value is used to find the schedule variance and not to see if you are over or under budget. However, when it comes to cost variance I think there could be some misrepresentation of over or under budget details. Since EV is an estimated worth based on overall budget and not on specific task budgets the cost variance could show that you are under budget when the next step is the most expensive.
I agree with amin-sadig in terms of people misconstruing the data, it unethical obviously. We live in a corrupted world and people will do anything to get ahead or to look “good”. I agree that cost may not be uniform throughout the duration of the project because many factors are to be accounted and to know all factors is impossible since the world we live in is not perfect. If I were planning a project I would also ask for more money than I actually needed because you can always give back that surplus or hold on to it for other issues that might arise. And if you never use the cash one hopes that you will give it back to whomever you borrowed it from.
To add to conversation, I agree with @krp67 that people "fudging" the data is unethical but people are bound to do this in order to promote themselves in some way to advance, look good, etc. I agree that if I were planning a project I would also submit a number that is on the higher end of the range because it's always better to be under budget instead of compiling a business plan and data to explain why you are asking/requiring more money. I agree with k9s2 that earned value could in some cases be off, but it should also not be used by itself but rather presented with EAC, ETC, BAC, and PV to show the bigger picture of the project.
