Deltek Insight 2010: The Next Decade of Earned Value Analysis


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Deltek Insight 2010: The Next Decade of Earned Value Analysis

  1. 1. EPM-217 The Next Decade ofEarned Value AnalysisDelivered by:Thomas R. Polen
  2. 2. Agenda• Define the ―Problem‖ of Improved Software and Why This Is A Good Problem to Have• Compare and Contrast Data, Information, and Analysis• Review Some Progressive Techniques for Analyzing Program Data• Open Discussion of These Techniques and Others Used by Participants• Call to Action: What Can You Do Today to Start Achieving the Next Level of Analysis Discussion and Audience Participation Is the Single Most Important Aspect of This PresentationCopyright © 2010 Deltek, Inc. 2
  3. 3. The “Problem” with Enhanced Systems• Enhanced Systems Capabilities Have Put Analysis Techniques into the Realm of Information Gathering – MS Project – Deltek OpenPlan – Deltek Cobra – Deltek wInsight• Yesterday’s ―Analysis‖ Can Now Be Produced through Automation and Clerical Activities – Refer to handout, section 1 for DCMA 14 point schedule analysis – Refer to handout, section 2 for EV Integrity Checks – Discuss these and other techniques that were once difficult and are now easy, due to the availability and accessibility of project dataCopyright © 2010 Deltek, Inc. 3
  4. 4. The Evolution of Data, Information, and Analysis• Yesterday – Level 1—Data – Level 2—Information – Level 3—Analysis• Today – Level 0—Data – Level 1—Information – Level 2—Automation – Level 3—Next Generation Analysis Yesterday’s Advanced Analysis Techniques Can Be Readily Achieved in Present-day Systems with Minimal EffortCopyright © 2010 Deltek, Inc. 4
  5. 5. Key Concepts of Next Generation Analysis• Next Generation Analysis Raises the Data Bar – Trending • Current reporting period data is no longer sufficient—data for multiple periods must be available in a single view (refer to winsight Bull’s Eye Chart in handout) – Statistical Process Control (SPC) • Outlier data must be pushed to the analyst—(SPC) must be available for all data items at a moment’s notice – Parametrics • All projects, past and current, must be normalized, warehoused, and ready for comparison to a current project• Trending, SPC, and Parametrics are Three Key Ingredients to the Next Generation of AnalysisCopyright © 2010 Deltek, Inc. 5
  6. 6. Trending• Powerful Alerting prior to Breach of Variance Thresholds• Indicator of Problems that Are Not Being Solved• Validates that Other Problems Have Been Solved• Examples: – After increasing steadily for the first five months of the program, the CPI has reversed course and has declinded for the past six months – Total Float for Integration Test has declined by 20 days for each of the past 4 months— total float is presently 7 days – Cost Variance for Account 1.2.1 has fallen by 20% of the budget each month since the start of the program – Although Actual Cost has tracked to Performance, VAC worsens by 100k each month Simply Reporting Individual Metrics Is No Longer Sufficient—Data Must Be Presented in the Context of What Has Been Happening and What Is Expected to Happen in the FutureCopyright © 2010 Deltek, Inc. 6
  7. 7. Statistical Process Control• Use Proven Statistical Techniques to Automatically Identify Data that Is Outside of Pre-defined Parameters• Determining the Root Cause of Variations Will Help to Identify if There Is a Problem with the Process or with Program Performance• Process Variations Can Be Eliminated, Leading to a Maturity Level where Variations Quickly Lead to Conclusions Regarding Program Performance – Examples • Variance at completion spiked this month (three sigma below zero) • 41 Baseline Changes were processed this month—typical number of changes is four • Actual costs for Low Value Material were five times the average burn rate this month With SPC, Data Is Presented in the Context of “in Tolerance” and “out of Tolerance”—SPC Should Be Available for All Data Metrics for the Program, Not Just Several Pre-selected MetricsCopyright © 2010 Deltek, Inc. 7
  8. 8. Parametrics• All Past and Present Project Data Will Be Used to Make Assumptions and Predictions about Future Program Performance• Historical Data Is Used as a ―Litmus Test‖ for Current Data• Projects Come in Different Shapes and Sizes, but Data Across Programs Can Be Normalized and Then Scaled to Various Programs• Examples: – At 50% complete, the program is experiencing a 12% overrun—typical programs in this condition have completed 22.1% over budget – Control Account 1.2.1 is overrunning cost by 18%—less than 4% of Control Accounts recover from a Cost Variance exceeding 15% – Programs that experience more than 10 Baseline Change events per month typically overrun program management accounts by 11% Your Historical Project Data Can Be Assembled into a Knowledge Base that Will Assist You in Using Your Own Company’s Performance to Predict Future EventsCopyright © 2010 Deltek, Inc. 8
  9. 9. How to Get Started• You May Already Have Many of the Tools Available to Begin Using These Techniques – COGNOS – wInsight – Cobra – MS Access / Excel• Solicit and Define the ―Golden Carrot‖ Features, No Matter How Far- fetched They May Seem—in Reality, You May Be Closer than You Think – Prompt executives and managers by providing them with examples of what is possible – Determine what critical decisions they make – Automate the decision-making data that is presently tedious to compileCopyright © 2010 Deltek, Inc. 9
  10. 10. Maturity Model/Call to Action• Define the Characteristics that You Would Like Your System to Have• Organize the Characteristics into a Maturity Model—This Has Several Benefits: – Organizational frustration is reduced, as change can begin almost immediately – Executives can see progress right away and will be more likely to provide ongoing funding for your efforts – The plan can evolve as it is implemented—your vision will become more clear as the early phases are established – Each step in your maturity model is an assessment point—these are the points to judge your accomplishments and assure that your overall strategy is truly being metCopyright © 2010 Deltek, Inc. 10
  11. 11. Final Handout Section and Discussion• The Final Section in the Handout Is a Sample Analysis Report that Incorporates Aspects of Trend Analysis, SPC, and Parametrics• What Accomplishments Have You Made in These Areas• What Are Your ―Golden Carrots‖ Thank you! tompolen@gmail.comCopyright © 2010 Deltek, Inc. 11