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Setting Up & Integrating EVM Into A PMO

Setting Up & Integrating EVM Into A PMO



I presented this presentation at the 6th Management Congress in Luxembourg On 1/12/2011. It describes what is earned value management and how it can be integrated into a PMO

I presented this presentation at the 6th Management Congress in Luxembourg On 1/12/2011. It describes what is earned value management and how it can be integrated into a PMO



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  • Read SlideMy topic of discussion today is Earned Value Management and how it can be implemented into a PMOEngage The Audience QuestionsHow many of you have a PMO within your organisation ?Do you use Prince 2? PMI? or Agile?Do you have a portfolio management tool for tracking projects?Do any of your projects not go over budget or schedule?Read At The End Of The SlideIt’s nearly the end of the day and the only thing between you’re hungry stomachs, is my presentation, so on a lighter note, I will be as informative as I can, and I will attempt to deliver my presentation within the respected timeframe, so I can save myself from the embarrassment of being escorted from the stage Click For Next Slide
  • Thank you for attending this historical PM event in Luxembourg.I’m excited to be part of a country that seems to maintain its economical growth even through these challenging times. I probably don’t need to remind you of the kind of constraints a PMO faces within organizations today where we are required to drive down costs and retain value. I hope what I present to you today gives you an insight to some of the most commonly used PPM tools available to derive Earned Value. Hopefully, it will provide you with an insight to how Earned Value can be used to successfully steer some of your organizations projects, to the direction of success.Click For Next Slide
  • Read:Projects seem to have more constraints & challenges these days and this is partially because of the recent economy fluctuation. Organizations are challenging its management teams, to be more innovative, in improving its client services, whilst striving for more ROI.A PMO always needs to adapt to these challenges because werenormally the first ones who need to justify our value within the business. In my experience current and future PMO’s need to be able to utilize the most from our day to day PPM tools and take advantage of there capabilities of integration & collaboration.My aim is to provide you with an:Click Slide & READClick For Next Slide
  • What is EVM? Click & ReadClick For Next Slide
  • READ: Why should you use EVM? READ SLIDE
  • READ:What tools are available to us in the market place, and what are there advantages and disadvantages:Click For Next Slide
  • READ BELOW (Just Talk Through The Slide Using The Below Points Of Reference)First of all we have a 2 standalone PPM tools:Excel, which has the advantage of a low initiation cost & running cost, but can be time consuming to design and maintain.MS Project: It’s a familiar business PMO project tool, its relatively stable, but if project plans are larger then 200 lines long it can be time consuming to maintain + as a standalone product there is no simple solution for retrieving actuals, automatically into MS project.Now we move on to the combined products.MS Sharepoint & MS project together: The advantages are again project tool familiarity, Low upfront cost, possibilities of automation and content integration because they are designed to work collaboratively together, but normally this requires an advanced level of SharePoint knowledge, so the cost of an integrator to setup is required, and it only includes partial integration out of the box.Clarity & Planview: Well these products have a rich feature set, and a lot of the features can be fully automated, however there is large investment needed to purchase these products and the ROI, is hard to justify.Click For Next Slide
  • Here is an example of what a standard EV graph/report looks like:READ BELOW (Just Talk Through The Slide Using The Below Points Of Reference)In conclusion: a combination of three KPI’s are used to derive a report like the one we have shown here, AC,PV,and EV. From one graph we can really see how well a project is performing.Typically projects have a planned value (budget) and an actual cost but seperately they have no reporting mechnism to anatically measure the value of the actual “work” being performed against it’s planned budget. EVM provides us with this, as we’ll intepreting applicable KPI’s that allow the viewer to dictate early signs of cost and schedule deviation.So how is, the formula EV calculated? EV is calculated using the “Actual % Complete” feature in MPP that multiplied by the planned value (budget) Without the use of EVM we cannot clearly see how good or bad a project is performing against it’s planned schedule, objectively and quantifiably.When reviewing an EVA graph, there is a rule of thumb for intepreting how a EVM report should be understood.1st you should identify the EV line, then compare it to your PV/AC line, if your EV line is above the PV/AC lines then your cost & schedule are stable and your work values in cost are being achieved.However, if your EV is below your PV line then you are probably behind schedule and overspending, meaning for every euro you are spending you are getting less value. This is normally not a good sign…and you may be saying to yourself, I have seen this scenario to often beforeClick For Next Slide
  • READ: How do we implement EVM?Click For Next Slide
  • We need to: READ SLIDE
  • READ:I’ll begin with a case study at KBL Bank, and we’ll start off with establishing some of the key drivers that KBL had in mind for wanting to adopt EVM Click Slide For Next Slide
  • At the time, the organization wanted to: READ SLIDERemember inflight magazine article point: “CLICK FOR ANIMATION”Click For Next Slide
  • Read The Question & Highlight Each Product.But whats the problem here?Click For The Blue Bar Animation “We have no integration, no automation, and most of these products can be labour intensive to maintain as part of a PMO”A lot of organizationsinvest in a single tool, that’s supposed to provide all of the services that a PMO provide on a daily basis, but in reality we still have to use other tools in combination with this single tool. So organisations still have to bare the additional cost burden of using a combination of tools as well as having the expense, of the one tool solution.Akey factor here, as PMO’s we already have the product knowledge & the PPM tool knowledge, its just a question of knowing, how to make the tools produce the products collaboratively and getting them to integrate togetherClick For Next Slide
  • Read:After an initial case study review, some of the PMO services revealed that: Click & READ SLIDEClick For Next Slide
  • Read:So what challenges did we face at the EVM implementation level? READ SLIDEClick For Next Slide
  • READ BELOW ONLY (Just Talk Through The Slide Using The Below Points Of Reference)At the advanced level of EVM usage, we have a 5 core KPI’s that intepret the reporting data. The first 3 fundamental driver KPI’s are: PV = Planned Value = which forms the planned scheduled spend over the span of the projectEV = Earned Value = this provides us with the monetary value of work performed against a set baselineAC = Represents the Actual Cost.The next 2 KPI’s are the overview KPI’s used by senior management to determine cost & schedule performance at a glance.CPI = Cost Performance Indicator SPI = Schedule Performance IndicatorSo what do these tell us?If your project has a CPI & SPI numerical value of one then your project is running to the planned cost and schedule.If your SPI & CPI are above a numerical value of one then you are ahead of schedule and underspendingIf your SPI & CPI are below a numerical value of one then your schedule is slipping and your project is unfortunately overspending.Click For Next Slide
  • Read : So what challenges do we face as PMO’s when using EVM? READ SLIDEClick For Next Slide
  • Before you think about READ SLIDEIn order to access the maturity level of a project plan, an initial analysis needed to be compiled at KBL
  • This table portrays differentlevels of a projects, plan maturity, this is something that was adopted as part of the planning improvement process. (PIP)The planning maturity at a poor state is equal to level 1 CLICK TO MOVE THE ARROW and it can be enhanced to level 6, with the implementation and usage of EV.What can a plan maturity model achieve? (only mention a few if time is limited)It can identify initialrisks that might not have been foreseen, due to poor planning.It will confirm whetherprojects performance is being measured against its cost or schedule correctly.It will verify whether a project plans deliverables,are being tracked against a baseline.It can show early indication of process deficiency i.e tolerance breaches, and change management deficiency It will identifies poor resource management due to poor planning ormonitoring & controlling….for example: Resource slack could be available within a given projectplan that isn’t being re-utilized.Identifies time management flaws, due to insufficient collaboration of resource absence being tracked to the specific deliverables within a project plan.Click For Next Slide
  • READ: So what combination of PPM tools are required to create an EVM architecture, and why should a PMO design and use one? Click For Animation “Flashing PPM Tool Content Collaboration & Integration: Because we want to achieve product & PPM tool integration and collaboration: CLICK FOR NEXT SLIDE
  • What PPM tools did KBL adopt?READ SLIDEI will now explain a typical planning process, where you can see how each PPM tool is used to enhance PPM tool content integration & colaboration.Click For Next Slide
  • This slide is fully animated so click the slide once and then begin reading through each pointAt the foundation level of a planning phase, a group of subject matter experts would create a Work Breakdown Structure using Mindjet Manager, this would derive the initialwork products & deliverables & time estimates. This also opens some insight to early found project risks & assumptions.The output of the Work Breakdown Structure initializes the need to produce a steering level project plan, this would typically be used by senior management or board level representatives to view progress at milestone level.This is closely followed by the development of the Microsoft Project plan. This is formed from the originating Work Breakdown Structure, and its here, where a 1st draft of project plan is born, without resource assignments. Later on, this plan becomes the key PPM product,for deriving EV and obtaining actuals from percent of work complete.Microsoft Excel is used to preliminarily define the resources and at this stage this answers the question,who do we have available from the resource pool? Or how many extra resources do we need to complete the tasks defined in the plan.Then we must compile a resource forecast across our project to understand the availability and its here where we would match resource skill sets to tasks and assign the resources to the individual tasks within Microsoft Project, making sure resource leveling is equal across the project before it is base-lined.At this point we can confirm our planned value and a snapshot of our project plan is ready for base-lining.Using SharePoint we can quickly create SharePoint lists, that form detailed Gantt charts, because we have developed some additional backward compatibility functions with Microsoft Project. So synchronization of the percent of actual work complete, can be achieved through a push and pull process, between both tools.Once we have synchronized the actuals in the project plan, we must set a status date in Microsoft project, to retrieve our EV reports from the built in EV function of MS project.Finally our built in dashboard is designed & created using SharePoint and we can convert & synchronize MS projects EV reports directly into the dashboard, providing CPI & SPI status at any reporting period.Reviewing the finished EVM architecture we can see that we have used a full range of PPM tools. Here we have described 3 levels of management reporting and we can interactively drill down from the high level known as the programme level, to the medium level used by project managers & PMO’s and finally the lower level, which is used by the project resources for task assignments & the sometimes this is used by the PMO for additional troubleshooting.Finally we have a complete EVM Architecture that makes use of our everyday common PMO PPM tools because of the tool integration and collaboration capabilities.Click For Next Slide
  • Here is an screen shot example of a purpose built, year on year working dashboard showing all of the relevant KPI’sClick For Next Slide
  • Here is an screen shot example of a working EV Report we produce. (Only bring up the below if you have enough time)In this EV graph we have included the cost information below the graph so the viewer can clearly identify any project variances.Click For Next Slide Or if you have time, it can be read?The red line represents thebaseline: This is the amount we said it was going to cost to deliver at project initiation.Theblue line represents the “EV” the amount of $$ worth of work value, the project has earned against the project budget baseline.The green line represents the accumalative cost of how much we have spent over time against our planned budget baseline, which can be measured against our PV to show if we are over or underspending.
  • Click For Next Slide
  • READ: After our initial case study, what have we gained from the use of EVM in KBL? From a tracking perspective the: Read slide 2nd Spot.Click For Next Slide
  • READ: Some of the PMO benefits are around the PMO’s ability to use other tools like: READ SLIDEClick For Next Slide
  • READ:So to finalize what do we gain from EVM and what are the key benefits to adopting EVM. It: Read SlideClick For Next Slide
  • A good source of EVM reading can be found on the internet, but I would recommend this book as a guide of excellence.Click For Next Slide
  • & Finally any questions?Click For Next Slide

Setting Up & Integrating EVM Into A PMO Setting Up & Integrating EVM Into A PMO Presentation Transcript