Aerospace & Defense

Case Study: Implementing Earned Value Management in SAP S/4HANA Projects

Note: In this project, our client also leveraged Lean Six Sigma principles alongside Earned Value Management (EVM) to further enhance the project's efficiency and effectiveness.

As companies move to SAP S/4HANA, effective project management becomes vital for successful implementation. This case study examines how an A&D client used EVM to save time and money during its SAP S/4HANA implementation, highlighting real-world applications and benefits. Faced with a lean budget and a two-year timeline, our client aimed to avoid common ERP pitfalls like scope creep and budget overruns. To address these challenges, the company adopted EVM as part of it its core project management approach, enhancing visibility into project performance and enabling proactive decision-making.

The EVM implementation process began with defining project objectives, success criteria, and a comprehensive project charter. The project team created a detailed Work Breakdown Structure (WBS) to manage tasks such as requirements gathering, system configuration, data migration, and user training. Baseline metrics for scope, schedule, and budget were established, including Planned Value (PV), Earned Value (EV), and Actual Cost (AC), providing a solid foundation for monitoring progress.

The team conducted weekly progress meetings and utilized EVM dashboards to track metrics, enabling real-time visualization of performance against the baseline. Regular variance analyses helped identify discrepancies between planned and actual performance, allowing for timely interventions. For instance, during a critical data migration phase, a negative Cost Variance (CV) was detected, prompting resource reallocation to address the bottleneck. EVM data also facilitated forecasting, allowing the team to calculate the Estimate at Completion (EAC) and Estimate to Complete (ETC) and make necessary adjustments.

Integration of EVM with risk management processes further enhanced project success. Potential risks, such as user adoption challenges, were identified early, and targeted training sessions improved engagement, reducing adoption risks. EVM metrics were shared with stakeholders to maintain transparency and foster support for necessary project adjustments. Continuous improvement was emphasized through post-project reviews, documenting lessons learned for future projects.

The effective application of EVM led to substantial cost savings including early detection of issues, avoiding potential overruns, and managing scope creep to save an estimated $5 million to $7.5 million. Efficiency gains were realized through improved decision-making and streamlined processes, contributing to additional savings of $5 million to $10 million.

Overall, the client’s projected savings was estimated to be nearly 20 million, ensuring the project was delivered on time, within budget, and with enhanced quality. The successful integration of EVM serves as a powerful example for other Fortune 500 companies, illustrating how a structured project management approach, including EVM, can significantly improve success rates, reduce costs, and enhance operational efficiency. As digital transformation evolves, EVM remains a critical tool for effective project oversight and management in complex IT environments.