Project monitoring -- a sequel

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