How can businesses ensure efficiency in elearning and maintain employee development? Paul Deed examines the role that earned value can play in cost-effective employee training to ensure business success.
Earned value has been used to manage and measure projects of varying size and scope for many decades. It began to gain popularity in the 60s when it was used widely in the government sector. It has since emerged as an important tool for measuring project progress across a broad range of industries and disciplines. As a concept, it’s fairly simple – "for the work completed so far, what should it have cost?" Over the years, it has become more widely used in the training world. For many organisations, however, it is used purely to measure costs against schedules. As a result, project managers are often cynical about its use; it is often seen as nothing more than a budgetary control technique. In reality, it can be used to do much more. Used correctly, it can be used to improve the quality and value of elearning projects.
What is earned value?
Earned value is a project management technique that allows a project manager to track the progress of a project by comparing the planned cost with the actual cost. At any point in the project, the project manager can determine whether it is running on budget, over budget or under budget. This takes into consideration the activities that need to be completed, those that are in progress and those that have already been finished.
The process starts with the creation of a work breakdown structure. This will define the phases of the project and the activities that need to take place in each phase. Each activity will have an estimated duration and an estimated amount of effort. Resources, including people, equipment and software, are then allocated to the activities. Each resource must be assigned a cost. Project managers are then able to generate a report that shows the planned cost of the project, broken down by project activities and resources.
Typically, the project can commence once the work has been scheduled, the resources identified and the required activities defined. This is known as the scheduled project. As the project progresses, the actual duration and effort required for each activity may differ from the scheduled project. This is known as the actual project. Project variance occurs when the actual project costs more or takes longer to complete than the scheduled project.
How can earned value be used when managing elearning projects?
Before we look at how earned value can be applied to elearning projects, there is one important point to note. The concept of earned value can only be readily applied to synchronous elearning projects – projects that follow a defined process such as the ADDIE model. It is not restricted to any one development model, but the process needs to be sequential, as opposed to a rapid development or prototyping approach. 
Typically, there are three variables that a project manager needs to balance when managing an elearning project; time, cost and quality. A change to one of these variables will normally affect the other two. For example, if the project is run quickly but the quality is kept high, the costs will be proportionately higher. If the project is run quickly and the costs are kept down, the quality is likely to suffer. It will normally take a long time to deliver a high quality project while keeping the costs down.
Typically, there are three variables that a project manager needs to balance when managing an elearning project; time, cost and quality. A change to one of these variables will normally affect the other two. For example, if the project is run quickly but the quality is kept high, the costs will be proportionately higher. If the project is run quickly and the costs are kept down, the quality is likely to suffer. It will normally take a long time to deliver a high quality project while keeping the costs down.These options suggest that the well-informed project manager can use earned value to better manage the project. To demonstrate how, let’s consider the following examples.
Example 1
Susan has been given three months to produce a series of elearning modules. She is working towards challenging project deadlines and a tight budget. Three weeks into the project, the elearning project is running to schedule. However, using the earned value methodology, Susan knows that the project is running over budget. She now has three options – negotiate an increase in budget and complete the project as per the planned schedule; take longer to complete the project and not deliver on time; or reduce the scope to deliver on time. Using earned value, Susan can make an informed decision and decide how the elearning project should progress. Taking remedial action early on will help Susan to limit the impact of the project variance.
Example 2
Peter is a project manager and has been tasked with delivering six elearning modules in one month. Using earned value, Peter knows that the project is running significantly below the planned budget. There are now a number of options available to Peter. He could deliver the project early and give the learners more time to learn. He could introduce more stringent quality control measures to increase the quality of the elearning materials. He could develop additional modules to cater to learners with different learning preferences. Alternatively, Peter could conduct a pilot of the modules and use the feedback to increase the quality.
If Peter wasn’t using earned value he wouldn’t know that he was running under budget. This means that he wouldn’t know what his options were. Using earned value, he was able to decide whether he delivers the project ahead of schedule by adding extra resources, or use the extra resources to deliver a higher quality of elearning project to the same schedule.
Conclusion
Overall, earned value is an effective tool that can be used to monitor the progress of elearning projects, enabling project managers to be aware of the options available to them and make better-informed project decisions. In an elearning sense, this means they can deliver the eLearning more quickly, giving learners more learning time, or can increase the quality of the modules, improving the effectiveness of the project.
Paul Deed is director of SkillSet and has been with the company since 2004. He specialises in the localisation of learning content for different languages and cultures and has managed successful training projects across the globe. Paul plays an active role in the development and delivery of learning programmes for clients across the oil and gas, retail, financial services and healthcare market.
