Project monitoring -- a sequel

I am responding to the ideas on monitoring and the notion of "earned value" put forward by Mr. Giammalvo (Your Letters, April 18, 1999), in connection with project management problems in Indonesia. In the sphere of projects implemented through the government, such as World Bank-funded projects, independent inspection would be an important step to get value for money. The minutes made up by government project management personnel which are documents sanctioning the progress payments to contractors and consultants, often incorrectly report the quantities and quality actually delivered.

Indeed, techniques for the management and monitoring of large- scale projects were first developed in the U.S. during World War II. They became collectively known as a project evaluation and review technique/critical path method (PERT/CPM). Improved computerized variants of these techniques exist and are used in solving management decisions and in project expenditure control. Mr. Giammalvo's claim that all these techniques are known either popularly or otherwise as Earned Value Management is nevertheless questionable. Earned Value rather seems to be promoted by his institute as some unique concept and approach.

The work planning and scheduling techniques referred to, all deal in one form or another with the minimization and control of the cost of capital tied up in idle plant, in other resources and in the construction process in general. They are not really concerned with nor, in fact, capable of detecting such things as the charges made for toilet seats. Inspection of the bill of quantities would achieve this. They also do not answer questions like "what did I get for my project expenditures?". The object of such techniques is cost minimization in achieving known targets.

They may be compared to the inventory optimization or Economic Order Quantity (EOQ) models in business management, of which the Japanese Just-In-Time (JIT) variant applied in automated production processes is an example. Their objective is to minimize the cost of working capital. Many powerful linear and quadratic programming algorithms and techniques have also been introduced to business and management decision-making.

The World Bank has admitted that a substantial percentage of the total value of projects it has funded over the years is thought to have disappeared. The point is, however, that this is not caused by an absence of sophisticated management techniques or by the lack of managers obtaining the coveted PMP certificate. Various monitoring and management information systems have been introduced in the past 15 years to many government departments, mostly through the loan donors themselves. As mentioned earlier, the answer to the problem lies more in independent works inspection and in reforming the ingrained culture nowadays referred to as corruption, collusion and nepotism.

One is told: "Earned Value improves on the 'normally used' spend plan concept (budget versus actual incurred cost) by requiring the work in process to be quantified." The question is: is this really something new or is Earned Value simply a misnomer?

K. HERMAN ZEVERING

Jakarta