Earned Value Increases As It Travels

Earned value (or the value you receive on your intellectual property) increases as it travels through the supply chain.  In other words, the farther an item travels from the manufacturer to the consumer, the more value it brings the manufacturer.  Consumer items change hands many times before they end up in consumer’s hands.  Each time they change hands, more money is invested, and therefore the value goes up.

Consider the illustration below.  A single egg isn’t worth much until it is developed.  Its value rises 100 times from nest to table.

Have you ever considered that software does the same thing?  It earns value as it passes from idea to developer, to QA, to packaging, to reseller, and finally to consumer.  So, the true Earned Value of a product is dependent upon its position in the supply chain, not just at the coder’s keyboard.  You account for such value by quantifying your products on their route to the consumer.