We don't like Level of Effort (LOE) work-in-process (WIP) {or earned value technique (EVT)} measures. It biases our schedule performance data toward an on schedule condition, regardless of whether we are ahead or behind schedule. Most people agree though that it is a necessary, but hopefully small part, of our overall project performance measurement.
LOE is acceptable for "support" tasks. For example, "engineering support to testing" may be a support task while the testing is underway and conducted by others. We don't know what support is needed, if any, but it should be anticipated, planned, and budgeted. Since its work is undefined we can't use a schedule of events or milestones to measure its progress, so it might use the LOE WIP measure. As LOE the EV (BCWP) is simply set to the PV (BCWS) at the end of each period - no schedule variance.
To be included in our baseline the support tasks must be a direct cost to the project. (Support provided via indirect costs or overhead is not in the baseline.) Support tasks are related to the tasks they support, meaning the planned duration of the LOE task is the same as the planned duration of the supported task.
We have a ten month discrete task and it has a related support task. The support task is therefore ten months too. So in planning the LOE support task we distribute its budget over ten months (not necessarily equally, though.) Each month the support task is supposed to be underway we record the EV equal to the PV; that's the LOE "rule". Costs are recorded too, of course.
So here is a potential problem. Our discrete task didn't start on time. So no support was needed. So we didn't task the support task and no costs were recorded. We still have to set EV equal to PV, but with no cost! We made "progress" on the support task since EV was recorded, but we spent zero. An interesting outcome and a likely a cause for some explanation.
Here is a second potential and more likely problem. The discrete task started on time so the LOE account also recorded EV and AC in support. At month ten the discrete work is not done, but all the LOE PV has been claimed as LOE EV. It appears there is no LOE left to do since the total EV equals the total PV (budget). The discrete work will continue on into month eleven and until its done. If the support effort was needed through month ten it is probably needed beyond month ten. So there will be LOE costs, and likely an overrun, but there is no PV left and no unclaimed EV. And we still have costs for the LOE support. We need more LOE to go with the added cost and extended period.
Or a better approach.
Apportioned Effort, that seldom used, misunderstood, EVT that is there for just this scenario. By substituting AE for LOE we can tie the progress and timeline of the support task to the discrete task. The EV for the LOE task will always be proportional to the progress on the discrete task and so all the LOE PV won't become EV until the discrete task is done.
So the next time you think LOE is the right WIP think also about Apportioned Effort. Then, when you need "more LOE" it will be there.
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