Three-Variance Approach for Updating Earned Value Management

Abstract

The project management triad consists of scope, time, and cost. In this study, the schedule variance and schedule performance index, in traditional two-variance earned value management (EVM), are proven not proper time performance indicators, and it is suggested to restore the original physical meanings of work performance as work variance (WV) and work performance index. It is found that work performance can equal time performance before the project’s planned duration in certain cases. However, the same is not true generally, especially once the project is overdue. An average work rate-based earned time method (ETM) is introduced in this study, which can serve as an alternative approach to estimate project time at completion. Finally, it is suggested that an independent performance measure, WV, be added to EVM, and that a three-variance approach be used to analyze the performance statuses in work, time, and cost integrally of a given project.