So, when I started writing about how earned value management systems (EVMS) can accurately predict the future with some simple calculations, I received some responses that expressed varying levels of incredulity. It simply goes against intuition that an information element as important as at-completion project costs could quickly and easily fall out of an EVMS.
But since I've already firmly ensconced myself at the end of this limb, let me take it a step further: The estimate at completion (EAC)--the brass ring of management information systems--can be calculated without a baseline, a work breakdown structure or a formal change-control process--none of what we've been told are essential parts of an acceptable EVMS. None. Nada. Zilch.
Now, I'm well-aware that the previous sentence is the metaphorical equivalent of pulling the pin on a grenade and rolling onto the floor of a conference room full of EVMS experts, but I can explain.
The traditional formula for calculating an EAC (EAC = BAC/CPI) can be algebraically reduced to dividing cumulative actual costs by cumulative percent complete. That's right, we're talking two date elements, easily collected. And the resulting information is far, far more accurate than anything that the general ledger can produce. It's also much more accurate (and faster and easier) than re-estimating the remaining work and adding that to cumulative actual costs.
In fact, it's so much more accurate, faster and easier than any competing information stream, that I'm frankly flummoxed that the calculated EAC isn't the centerpiece of EVMS use everywhere.
I can't wait to see the responses to this one.