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IT Project Management
 

IT Project Management

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    IT Project Management IT Project Management Presentation Transcript

    • Integrating Earned Value into the Management of Software Development Projects Dan Brandon, Christian Brothers University
      • Presented at Information Resources Management Association (IRMA) Annual International Meeting, June 1999, Hersey, PA, USA; Reprinted in “Managing Information Technology Resources in Organizations in the Next Millennium (ISBN: 1-878289-51-9)
    • Project Management & IT Management
      • “ IT managers careers will rise and fall based on their ability to deliver high quality projects on time.”
        • J . I. Cash, Harvard Business School
      • Only 27% of software development projects succeed; another 33% are over budget (average cost overrun is 189%) and/or late and/or scaled back
        • Standish Group
    • Project Management Areas
      • Project Feasibility/Justification
      • Project Organization
      • Project Planning & Scheduling
      • Project Staffing
      • Project Tracking
    • Typical Project Scheduling (i.e. MS Project)
      • Indicate project start date (and any individual task start dates that cannot float)
      • Indicate tasks (WBS) and their resource requirements (how much of whose time)
      • Indicate Task Interdependencies
      • Indicate Milestones
      • Indicate resource availability; do resource “leveling”
      • Produce “baseline” schedule
    • Typical Top Level Software WBS
      • Requirements Definition
      • Overall Design
      • Detail Project Plan
      • External Design
      • Detail Design
      • Implementation
      • Integration
      • Internal Documentation
      • Training
      • Installation
    • Example Second Level WBS [Figure 1 in Paper]
      • Requirements Definition
      • External Requirements
      • Standards Requirements
      • Performance Requirements
      • Interface Requirements
      • Overall Design
      • External Design
      • Internal Design
    • Project Cost Plan
      • Using a spreadsheet program or using a project scheduling program,
      • Develop a cost plan which indicates:
        • the cost for each task
        • when the cost is planned to be incurred
      • Software development is mostly labor cost
      • Figure 2 (shows top level cost Plan)
      • Figure 3 is a graphical representation
      • Jan Feb Mar Apr
      • Requirements Definition 10 5
      • Overall Design 5 5
      • Project Plan 5 5
      • External Documentation 5
      • Partial View of Plan
      • Monthly Cost 10 10 10 10
      • Cumulative 10 20 30 40
    •  
    • Project Tracking
      • “ Well done is better than well said.”
        • Benjamin Franklin (1706 - 1790)
    • Cost & Schedule Tracking
      • Traditional
        • Gantt Chart
        • Cost versus Budget
      • Earned Value (Cost/Schedule Control Systems Criteria [C/SCSC] )
    • Typical Approach
      • Present reports to management:
        • Cost versus Budget (Planned Cost)
          • Figure 4
        • Gantt Chart of Progress
          • Figure 5
      • The example here is for project work thru July
    • Blue = Plan, Yellow = Actual
    •  
      • From the information shown:
        • Are we in good shape on this project (i.e. ahead of, or behind schedule) ?
        • When can we expect to finish this project ?
        • What will be our cost at completion ?
      • Earned Value can answer these questions !
    • Earned Value
      • “ Never mistake motion for action.”
        • Ernest Hemingway (1889 - 1961)
      • “ One of the most underused cost management tools available for project managers is the earned value performance measurement concept”
      • Q. Fleming & M. Koppelman - Primavera Systems, Inc.
    • History of Earned Value
      • Been around in several forms since 1950’s
      • DoD required many contracts (those where the government was at risk for cost overruns) to use Earned Value (originally PERT/COST)
      • Earned value was a key concept in the 1967 DoD (Dept. of Defense) policy to which contractors had to comply called Cost/Schedule Control System Criteria (C/SCSC)
      • Revised in recent years by DoD to avoid “over implementation”
      • Now working very well in DoD (particularly Air Force, Army, ...)
      • Large body of statistical data available
      • Has its own Internet site in DoD
      • However use in private industry is still low:
        • No exposure to concepts
        • Don’t understand concepts
        • Don’t know how to effectively implement
    • Earned Value
      • A quantifiable way to express real cost and schedule variances
      • Work Plan - shows the budgeted cost associated with the project in time by task (work packet), rolled up to a particular level (the “reporting level”) of the WBS
      • Concepts:
        • Budgeted cost of work scheduled
        • Actual cost of work performed
        • Budgeted cost of work performed (EV)
    • Budgeted Cost of Work Scheduled
      • A point on the planned cost (or budget) baseline representing the value of work planned (scheduled) as of a given point in time.
    • Actual Cost of Work Performed
      • The total accrued resources spent on the project thusfar
    • Budgeted Cost of Work Performed
      • Same as “ Earned Value ”
      • A point on the planned cost (budget) baseline representing the budgeted value for work completed as of a point in time.
      • Determined by looking at each task initiated, the planned cost for that task, and the amount of that task completed (% complete) -- Figure 5 in paper
    • External Documentation [Figure 5]
      • Task Plan % C Value
      • Overall Control 2 100 2
      • Tables 3 100 3
      • Sorts, Selects, ... 1 0 0
      • Forms 2 60 1.2
      • Reports 2 65 1.3
      • Totals 10 75 7.5
    • EV Variances
      • Cost Variance = ACWP - BCWP (EV)
        • Note difference from simple budget variance: ( ACWP - BCWS)
        • Figure 6 in paper
      • Schedule Variance = BCWS - BCWP
        • Can be expressed in time or dollars
        • To convert to time use spending rate at the measured point in time
    •  
      • We can clearly see from the graph that we are over cost not under cost:
        • ACWP - BCWP is positive
        • Even though budget variance (ACWP - BCWS) is negative (under budget) !!!
      • We can also se that we are behind schedule; we should have been at this point several weeks ago !
      • Formulas here have sign reversed from PMI PMBOK versions
    • Extrapolations [Figure 8]
      • Schedule:
        • Schedule Efficiency Factor:
          • EarnedValue/BCWS = 0.7
        • Schedule variance
          • In either dollars (24) or calendar time (1.2) !
        • Estimated Time to Complete (16):
          • PlanTime/ScheduleEfficiencyFactor
      • Cost:
        • Cost Efficiency Factor:
          • EarnedValue/ACWP = 0.9
        • Estimated Cost at Completion (EAC):
          • PlanCost/CostEfficiencyFactor = 211
    • Effective Use of Earned Value in IT
      • Proper Task Level Specification
      • Meaningful Percent Complete Reporting
      • “ Non-Intrusive” Tracking Systems
      • Accurate and Timely Cost Data
      • Integration with SEI’s CMM
      • TQM vs Individual Performance Evaluation
    • Task Level
      • General rule for application software development - smaller of
        • one manweek’s effort
        • individual component (screen, report, memu,...)
      • Important to match to accounting and/or timekeeping frequency !!
    • Percent Complete Reporting
      • Keep it simple !
      • Common method (weighted milestone):
        • Not started zero
        • Working on it 50%
        • Finished 100%
      • Trade off in ease of reporting versus accuracy of reporting
    • IT % Complete
      • Have not begun work 0%
      • Working on packet 50%
      • Finished packet 75%
      • Packet Verified 100%
      • Figure 9 in paper suggest verification methods for typical IT packet types
    • Integration with SEI’s CMM
      • Software Engineering Institute’s Capability Maturity Model (for software)
      • Level 2 (Repeatable) mainly concerns project management; key process areas:
        • Software Project Planning
        • Software Project Tracking and Oversight
          • “ The project’s software effort and cost are tracked, and corrective actions are taken as necessary.”
    • Tracking Systems
      • Non intrusive
      • Gather only necessary information:
        • time (manhours)
        • per cent complete by component
      • By product of normal time & attendance system (i.e. timecards):
        • person id (rbs)
        • task id (wbs)
        • % complete
        • manhours
    • Timely and Accurate Cost Data
      • Note that EV schedule variances do not need actual costs
      • Getting necessary and timely cost data from G/L, even at top level of WBS may not be possible
      • Need to “feedward” cost data based upon regular (i.e. weekly) time card and other input:
        • Base Earned Value on hours instead of dollars
        • Or base cost on hours times a category “rate” for each type of employee (ie Programmer II); using actual rates is also possible but probably is both a maintenance problem and confidentially problem).
    • TQM as Basis
      • Employee acceptance problem
        • “Extra paperwork”
        • “Effect on my performance evaluation”
        • “Cannot report accurately” - see % complete reporting methods
      • Justify on TQM Basis (adopt as part of overall TQM program)
        • Improve Task Estimation Process
        • Accuracy of estimating time/cost to complete
      • “ If you can’t measure it, you can’t manage it”.........Peter Drucker (TQM Guru)
      • Project Management Institute - www.pmi.org