Analyzing Stability of Estimates at Completion
Earned Value Management (EVM) is a project management methodology to measure, report, and predict the cost and schedule performance of a project or program. EVM has been integral to the success of international, domestic, commercial, and public sector programs by allowing managers to understand the health of the program and take corrective actions, as necessary (Nizam et al., 2020). However, the effectiveness of utilizing EVM relies on the accuracy of its metrics. Previous research, led by Christensen (1996), became the oft-cited stability rule in the EVM literature and taught in continuing education classes. Subsequently, Kim et al. (2019) updated the seminal work of Christensen with more recent data on modern programs. Both studies, among others, have addressed the accuracy of EVM metrics for U.S. defense programs. But not all defense programs are created equally. The accuracy of the metrics depends on program-specific factors, such as the life-cycle phase or type of contract (Christensen, 1996).
This brings into question the applicability and success of EVM for programs with one such different characteristic: long duration development periods (defined as 5 plus years). Long development periods are necessary when the focus is advancing the capabilities of novel or complex systems. These long development period programs are common in large defense public sector programs. This article results from the authors' investigation of long duration programs and examines the reliability of various EVM metrics along both the cost and schedule dimensions.
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Defense ARJ , Spring 2025, Vol. 32 No. 1
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