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2011 pmo symposium Bridging the Agile-to-PMO Communication Gap


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Traditional EVM makes no sense in software (and is potentially harmful) because claiming value earned based on intermediate work products--without an assertion of quality--does not provide reasonable forecasts. Agile provides an assertable and inspectable quality. Also, by ordering in terms of highest Business Value and risk considerations along with potentially shippable increments, I believe starts to include notions of value. Still, AgileEVM measures performance against plans (that can be re-baselined every iteration if needed). AgileEVM integrates cost management. Doing it well means not giving up what Agile offers: adaptive planning, quality.

Published in: Business, Technology

2011 pmo symposium Bridging the Agile-to-PMO Communication Gap

  1. 1. Bridging  the  Agile-­‐to-­‐PMO  Communica7on  Gap     Brent  Barton,  President,  Agile  Advantage,  Inc.
  2. 2.   An  Agile  Story    A  PMO  Story    Scrum  (An  Agile  Project  Management  Framework)    Tradi<onal  Earned  Value  Management    Agile  Earned  Value  Management  (AgileEVM)    Project  Case  Study    Open  Discussion   *Slides available via or
  3. 3.   An  Agile  Pilot   ◦  One  Scrum  Team  
  4. 4. This  is  the  best,  simplest,  easiest  to  use   applica1on  we  have   ever  go7en  in  both    Customer  Care  and  the   Retail  Stores!    Whatever  you  all  did,  I   want  more  of  that!  
  5. 5. Cost    Employee  Sa<sfac<on   Savings    Customer  Sa<sfac<on   Revenue   New   Reten<on   Revenue    Cost  Savings    New  Revenue     through  efficiency   Shareholder   Value   Value   Compliance   Employee   Customer   Sa<sfac<on   Sa<sfac<on  
  6. 6.   Next  Annual  Budget:      Agile  Program  (Using  Scrum)   ◦  >$75  Million  Project   ◦  ~100  People  involved   ◦  Quarterly  Roadmap   I  am  so   Happy!  
  7. 7.   At  the  same  <me  as  the  “Big  Agile”  Program…   ◦  Dissolved  all  PMOs   ◦  Created  a  new  ePMO   ◦  Moved  all  Project  Managers  to  ePMO    Newly  Re-­‐orged  Project  Manager  innocently  turned  a   project  red  (Scope,  Schedule  issues)   ◦  9  mee<ngs  with  VP’s  and  Sr.  Directors   ◦  Effec<vely  trained  this  PM  never     to  put  projects  in  red  
  8. 8. ScopeSchedule Cost
  9. 9.   [Project]  Por`olio  management   is  the  coordinated   management  of  por`olio   components  to  achieve  specific   organiza7onal  objec7ves    Organiza<ons  that  do  not  link   por`olio  management  to   governance  increase  the  risk   that  misaligned  or  low  priority   ini<a<ves  will  consume  cri<cal   resources   - Standard for Portfolio Management
  10. 10.   Capitalize  on  opportuni<es    Minimize  the  impact  of   threats      Respond  to  changes  in  the   market    Reinforce  focus  on  cri<cal   opera<onal  ac<vi<es   - Standard for Portfolio Management
  11. 11.   Priori<za<on  to     maximize  “Business  Value”    Effec<ve  delivery  to     minimize  costs    Re-­‐alloca<on  of  resources     when  costs  are  too  high     or  the  benefit  is  too  low  
  12. 12.   Rolling  wave  planning  is  a  form  of  progressive   elabora<on  planning  where  the  work  to  be   accomplished  in  the  near  term  is  planned  in  detail  and   future  work  is  planned  at  a  higher  level  of  the  WBS.   2008 Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
  13. 13.   It  is  not  possible  to  completely  specify  an  interac<ve   system.   Wegner’s  Lemma,  1995    Uncertainty  is  inherent  and  inevitable  in  sogware   development  processes  and  products.   Ziv’s  Uncertainty  Principle,  1996    For  a  new  sogware  system  the  requirements  will  not   be  completely  known  un<l  ager  the  users  have  used   it.   Humphrey’s  Requirements  Uncertainty  Principle,  c.  1998  
  14. 14.   Stack  Ranked   Priori<za<on  based  on   Business  Value  and  risk    Self  organizing,  cross-­‐ func<onal  teams    Defini<on  of  Done    Poten<ally  Shippable   Increments    Velocity    Con<nuous  Improvement  
  15. 15.   Priori<za<on  to     maximize  Business  Value   "   Scrum  Effec<ve  delivery  to     "   Scrum (but no minimize  costs   cost management)  Re-­‐alloca<on  of  resources     when  costs  are  too  high     or  the  benefit  is  too  low  
  16. 16. Total Allocated Budget! EAC Estimate at Complete Management Reserve! PMB Performance Management Baseline$ Planned Value (PV) Actual Cost (AC) (EV) Earned Value Time Time! Completion! Now! Date!
  17. 17. Cost Performance Index (CPI=EV/AC) CPI < 1 CPI =1 CPI > 1 Over Budget On Budget Under Budget Schedule Performance Index (SPI=EV/PV) SPI < 1 SPI =1 SPI > 1Behind Schedule On Schedule Ahead of Schedule
  18. 18.   Integrates  cost  and  schedule  management    Forecasts  in  financial  units  based  on  units  used  for   actual  cost    Decades  of  use    Part  of  PMBOK  (ANSI/PMI  99-­‐001-­‐2008)    Part  of  EVMS  (ANSI/EIA-­‐748-­‐B-­‐2007)  
  19. 19.   Typical  implementa<ons   expect  everything  fully   Ugh!   defined  up  front    No  asser<on  of  quality    Claiming  value  earned  on   intermediate  work   products   19
  20. 20.   A  planning  package  is  a  holding  account  (within  a   control  account)  for  budget  for  future  work  that  it  is   not  yet  prac<cable  to  plan  at  the  work  package  level.   The  planning  package  budget  is  <me-­‐phased  in   accordance  with  known  schedule  requirements  (due   dates)  for  resource  planning,  and  the  plans  are  refined   as  detail  requirements  become  clearer  and  the  <me  to   begin  work  draws  nearer.  A  program  may  elect  to   break  the  work  assigned  to  a  control  account  into   smaller  groupings  of  tasks,  i.e.,  mul<ple  planning   packages,  for  internal  planning  and  control  reasons.   -Earned Value Management Systems ANSI/EIA-748-B-2007
  21. 21.   There  is  no  standard  advance  planning  look-­‐ahead   period  (i.e.,  a  planning  “horizon”  or  “window”)  for   conversion  of  planning  packages  into  work  packages   that  is  appropriate  for  all  programs  or  condi<ons.  Each   organiza<on  must  determine  its  own  policies  in  this   regard.   -Earned Value Management Systems ANSI/EIA-748-B-2007
  22. 22.   Priori<za<on  to     maximize  Business  Value   "   Scrum  Effec<ve  delivery  to     "   Scrum (but no minimize  costs   cost management) "    Re-­‐alloca<on  of  resources     when  costs  are  too  high     EVM (cost management but no or  the  benefit  is  too  low   benefit management)
  23. 23. Value Strategic  Required  to  make  good   Informs  and   Guides   Decisions   Quality Constraints (Schedule, Cost, Scope) Source: Jim Highsmith
  24. 24.   Mathema<cally  proven  that  Forecasts  based  on   average  velocity  (story  points)  es<mate  at  complete   EAC  (dollars)    Key  Assump<on:    The  ra<o  of  (story  points   completed)/(total  story  points  in  a  release)  is  a  good   measure  of  Actual  Percent  Complete   Sulaiman, Barton, Blackburn “AgileEVM - earned value management in Scrum Projects,” 2006
  25. 25.   Release  Baseline   ◦  Budget  (BAC)   ◦  Ini<al  Scope   ◦  Start  Date    Each  Itera<on  (Sprint)   ◦  Points  accepted  by  Product  Owner       meets  Defini<on  of  Done   ◦  Points  add  or  removed  from  release  scope   ◦  Actual  Cost  
  26. 26.   Now  we  can  focus  on   Value…  
  27. 27.   Integrated  Cost  and  Schedule  informa<on  provides   beser  insights  than  schedule  alone  
  28. 28.   Focus  on  delivering  value    Constraints  inform,  not  dictate  outcomes    Quality  must  be  part  of  the  decision  process    AgileEVM  helps  communicate  by  transla<ng  points  to   dollars  
  29. 29.   President:  Agile  Advantage,  Inc.     Former  CTO,  Development  Manager,   PMO  Manager,  Agile  Coach,  Mentor,   Cer<fied  Scrum  Trainer,  ScrumMaster,   Product  Owner     Ac<ve  prac<<oner  delivering  value   using  Agile  and  helping  others  do  it; from  small  Product  companies  to  very   Blog: large  IT  organiza<ons   Twitter: brentbarton"   Ar<cles   •  “Manage  Project  Por`olios  More  Effec<vely  by  Including  Sogware  Debt  in  the  Decision  Process”,  Cuser   Journal  2010   •  “AgileEVM  –  Earned  Value  Management  in  Scrum  Projects”,  IEEE  2006   •  “Implemen<ng  a  Professional  Services  Organiza<on  Using  Type  C  Scrum”,  IEEE   •  “Establishing  and  Maintaining  Top  to  Bosom  Transparency  Using  the  Meta-­‐Scrum”,  AgileJournal   •  “All-­‐Out  Organiza<onal  Scrum  as  an  Innova<on  Value  Chain”,  IEEE