Principles and Practices of Performance-Based Project Management®

1. CONNECTING THE 5 PRINCIPLES AND 5 PRACTICES OF PERFORMANCE-BASED PROJECT MANAGEMENT® TO INCREASE THE PROBABILITY OF PROJECT SUCCESS (POPS) Both are needed, neither work aloneNiwot Ridge, LLC

2. § A basic truth, law, or assumption. § An accepted or professed rule of action. § Habitual or customary performance. § Repeated performance or systematic exercise for the purpose of acquiring skill or proficiency. § Condition arrived at by experience or exercise. § All progress to plan measured in tangible evidence. § Performance measured in units meaningful to the decision makers. Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

3. Structure of Performance-Based Project Management® ¨ Detailed handbooks for the 5 practice areas of Performance Based Management ¤ Identify Capabilities ¤ Define Requirements ¤ Establish Performance Measurement Baseline (PMB) ¤ Execute the PMB ¤ Apply Continuous Risk Management ¨ Work examples for each practice that can be put to work as a reference design for the actual processes needed to increase the Probability of Program Success. Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014 Performance-Based Project Management® is a register trademark of Niwot Ridge LLC

4. Our REAL goal is to align all the measures of performance into a single cohesive view of the Probability of Success Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

5. Motivation for integrating the Principles and Practices is to increase the probability of success ¨ We need to… ¤ Improve our ability to define an Executable Plan ¤ Improve our ability to track Execution to Plan ¤ Provide better visibility to stakeholders ¤ Provide framework for accurate and timely issue identification / prediction ¨ …in order to ¤ Reduce cycle time ¤ Get required capability to customer quicker, more effectively, and within budget Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

6. 1. What Does DONE Look Like? 2. What is the path to DONE? 3. Do We Have Enough Time, Resources, And Money To Get To DONE? 4. What Impediments Will We Encounter Along The Way To DONE? 5. How Do We Know We Are Making Progress Toward DONE? Five Immutable Principles Of All Successful Projects … Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

7. 7 Apply Continuous Risk Management to each Performance Based Management process area Identify Needed Capabilities needed to achieve the project objectives or the particular end state for a specific scenario. Elicit Technical & Operational Requirements needed for the system capabilities to be fulfilled. Establish Performance Measurement Baseline time– phased network of work activities describing the work to be performed Execute Performance Measurement Baseline activities while assuring technical performance is met Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

8. The Structure Of This Briefing ¨ For each of the 5 Principles and 5 Practices there is tangible evidence that the principles are being applied according to the practice. ¨ The next page shows how the principles and practices are evidenced through these documents. ¨ The following page shows the Numbers of the top level documents, 1 through 23. ¨ Each document or series of documents is then described with a Numbered pages, 1 through 23. 8 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

9. 5 Immutable Principles 5 Practices of Performance-Based Project Management® Identify Needed Capabilities Establish Requirements Baseline Performance Measurement Baseline (PMB) Execute the PMB Continuous Risk Management Where are we going? ConOps, SOO, SOW Technical and Operational Based Plan Incremental Maturity Measures Physical Percent Complete Risk Identification How are we going to get there? Integrated Master Plan (IMP) Work Breakdown Structure Integrated Master Schedule (IMS) Iterative and Incremental Delivery Risk Analysis What do we need along the way? Resource Management Plan Future Performance Forecasting Risk Planning What impediments will we encounter along the way? 4 Levels of Uncertainty: 1) Variance, 2) Foreseen, 3) Unforeseen, 4) Chaos Technical and Programmatic Risk handling assigned to all WBS deliverables Risk adjustments to cost and schedule measures Risk adjusted Performance Measurement Baseline Risk Tracking How do we measure progress? Measures of Effectiveness (MoE) Measures of Performance (MoP) Technical Performance Measures (TPM) Earned Value Management (EVM) Risk Control

10. 5 Immutable Principles 5 Practices of Program Success Identify Needed Capabilities Establish Requirements Baseline Performance Measurement Baseline (PMB) Execute the PMB Continuous Risk Management Where are we going? 1 5 10 14 19 How are we going to get there? 2 6 11 15 20 What do we need along the way? 7 16 21 What impediments will we encounter? 3 8 12 17 22 How do we measure progress? 4 9 13 18 23

11. Identify Needed Capabilities “Planning, under uncertainty, to provide capabilities suitable for a wide range of modern-day challenges and circumstances while working within an economic framework that necessitates choice.” By Identifying system capabilities, the elicited technical and operational requirements can be traced from the Measures of Effectiveness (MOE) to each deliverable in the Integrated Master Plan and Schedule. Capabilities state the “why” of the system. Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

12. 5 Immutable Principles 5 Practices of Performance-Based Project Management® Identify Needed Capabilities Establish Requirements Baseline Performance Measurement Baseline (PMB) Execute the PMB Continuous Risk Management Where are we going? ConOps, SOO, SOW Technical and Operational Based Plan Incremental Maturity Measures Physical Percent Complete Risk Identification How are we going to get there? Integrated Master Plan (IMP) Work Breakdown Structure Integrated Master Schedule (IMS) Iterative and Incremental Delivery Risk Analysis What do we need along the way? Resource Management Plan Future Performance Forecasting Risk Planning What impediments will we encounter along the way? 4 Levels of Uncertainty Assessment Technical and Programmatic Risk handling assigned to all WBS deliverables Risk adjustments to cost and schedule measures Risk adjusted Performance Measurement Baseline Risk Tracking How do we measure progress? Measures of Effectiveness (MoE) Measures of Performance (MoP) Technical Performance Measures Earned Value Management Risk Control

13. § Partition system capabilities into classes of service within operational scenarios § Connect capabilities to system requirements using sysML § Define Measures of Effectiveness (MoE) from the customer point of view § Define in the delivery schedule the achievement of each Technical Performance Measure § Define scenarios for each system capability § Connect these scenarios to a Value Stream Map of the increasing maturity of the program § Assess value flow through the map for each needed capability § Identify capabilities mismatches and make corrections to improve overall value flow § Assign costs to a system element using a value model process model § Assure risk, probabilistic cost and benefit performance attributes are defined § Use cost, schedule and technical performance probabilistic models to forecast potential risks to program performance § Make tradeoffs that connect cost, schedule, and technical performance in a single “trade space” model § Measures of Effectiveness and Measures of Performance are the raw materials for these tradeoffs Define the set of capabilities to be employed to achieve desired objectives or a particular end state for a specific scenario. Take the ConOps and define the details of who, where, and how it is to be accomplished, employed and executed. 1.0 1.1 1.2 1.3 1.4 Chapter IV13 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

14. What Should We Do? Where Are We Now? Identifying Needed System Capabilities Abstracted from: “Capabilities‒Based Planning – How It Is Intended To Work And Challenges To Its Successful Implementation,” Col. Stephen K. Walker, United States Army, U. S. Army War College, March 2005 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014 I

15. Concept of Operations, Statement of Objectives, and Statement of Work ¨ The Concept of Operations (ConOps) tells us why we are doing the project and what we are going to do with the products or services that result from the project. ¨ The ConOps tells the stories of these products and services using scenarios or use cases. ¨ Theses stories describe the outcomes in terms meaningful to the recipients of the outcomes from the project. 1 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

16. Integrated Master Plan (IMP) ¨ The IMP is an event-based plan of a hierarchy of program events, with each event being supported by specific Specific Accomplishments, and each Accomplishment Criteria associated with specific criteria to be satisfied for its completion. ¨ The IMP defines the flow of increasing maturity of major deliverables through Significant Accomplishments and Accomplishment Criteria of the Work Packages producing the products or services of the project. 2 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

17. § Authorize each Work Package to start work for the planned period of performance. § Using Work Packages sequences, measures of performance for each work package established – physical percent complete defined in units of measure meaningful to the customer § Deliverables from each Work Package completion assessed against the target Technical Performance Measure. § Measure other performance metrics – Late Starts, Late Finished, Margin Erosion, near critical path dependencies, and resource utilization. § Adjustments made to Earned Value from the TPM assessments. Events / Milestones define the availability of a capability at this point in the schedule Accomplishments define the entry conditions for each Event or Milestone Criteria are the exit conditions for each Work Package Work Package Work Package Work Package Work Package Work Package Work Package Work Package Work package 2 Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 2 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

18. Two Types of Complexity ¨ Task Complexity – the number of interacting and mutually dependent components of the project. ¤ Coordination is the key challenge in task complexity. ¤ Identifying, sequencing, allocating resources, ensuring deviations from the critical path are corrected, and achieving project goals within schedule, budget, and design boundaries. ¨ Relational Complexity – Conflicting interests lead to disagreements about project goals and about priorities among tasks and features of the project outcome. 3 † “Uncertainty and Project Management: Beyond the Critical Path,” de Meyer, Loch, and Pich, INSEAD Working Paper, 2001Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

19. 4 Levels of Uncertainty† ¨ Variational Uncertainty – from many small influences yields a range of values on a particular activity. ¨ Foreseen Uncertainty – are identifiable and understood influences that the team cannot be sure will occur. ¨ Unforeseen Uncertainty – can’t be identified during project planning. There is no Plan B. ¨ Chaos – the basic structure of the project plan is uncertain, as is the case when technology is in upheaval or when research, not development, is the main goal. 3 † “Managing Project Uncertainty: From Variation to Chaos,” de Meyer, Loch, and Pich, MIT Sloan Management Review, Winter, 2002Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

20. Measures of Effectiveness (MoE) Measures of Effectiveness … ¨ Are stated in units meaningful to the buyer, ¨ Focus on capabilities independent of any technical implementation, ¨ Are connected to the mission success. 4 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

21. Define Technical and Operational Requirements Baselined requirements are the basis of Work Packages and Planning Packages and the work efforts needed to produce the deliverables from these Packages. These deliverables fulfill the technical and operational requirements needed to deliver the system Capabilities. Tracing Capabilities to Requirements assures each requirement has a “home” in the system. Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

22. 5 Immutable Principles 5 Practices of Performance-Based Project Management® Identify Needed Capabilities Establish Requirements Baseline Performance Measurement Baseline (PMB) Execute the PMB Continuous Risk Management Where are we going? ConOps, SOO, SOW Technical and Operational Based Plan Incremental Maturity Measures Physical Percent Complete Risk Identification How are we going to get there? Integrated Master Plan (IMP) Work Breakdown Structure Integrated Master Schedule (IMS) Iterative and Incremental Delivery Risk Analysis What do we need along the way? Resource Management Plan Future Performance Forecasting Risk Planning What impediments will we encounter along the way? 4 Levels of Uncertainty Assessment Technical and Programmatic Risk Handling assigned to all WBS deliverables Risk adjustments to cost and schedule measures Risk adjusted Performance Measurement Baseline Risk Tracking How do we measure progress? Measures of Effectiveness (MoE) Measures of Performance (MoP) Technical Performance Measures Earned Value Management Risk Control

23. Define the technical and operational requirements that must be in place for the system capabilities to be fulfilled. Define these requirements in terms isolated from any implementation. 2.0 § Produce an overall statement of the problem in an operational context. § Develop the overall operational and technical objectives of the target system. § Defined the boundaries and interfaces of the target system. 2.1 § Gather required system capabilities, functional, nonfunctional and environmental requirements, and design constraints. § Build a Top Down Capabilities and Functional decomposition of the requirements in a flow down tree using a Requirements Management System. 2.2 § Answer the question “why do I need this?” in terms of operational benefits. § Build a cost benefit / model using probabilistic assessment of all variables and dependencies. § For technical requirements, perform a risk assessment to cost and schedule. 2.3 § Determine criticality for the functions for the system mission. § Determine trade off relationships for all requirements to be used when option decisions are made. § For technical items prioritize on cost and dependency. 2.4 § Address completeness of requirements by removing all “TBD” items. § Validate the requirements agree and are traceable to system capabilities, goals, and mission. § Resolve any requirements inconsistencies and conflicts. 2.5 Chapter V23 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

25. Technical and Operational Based Plan ¨ The Value Stream is the sequence of deliverables needed to produce the technical and operational outcomes of the project. ¨ For each deliverable, an assessment of risk, cost, and schedule to the successful delivery of the planned value. ¨ Value of each deliverable measures in units meaningful to the buyer of that value. 5 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

26. Work Breakdown Structure (WBS) ¨ The WBS provides a framework for describing program objectives. Each WBS element provides logical summary levels for assessing technical accomplishments, for supporting the required event- based technical reviews, and for measuring cost and schedule performance. ¨ The WBS defines the program in terms of hierarchically-related, product-oriented elements. ¨ The WBS is defined, developed, and maintained throughout the system life cycle based on a disciplined application of a systems engineering process. 6 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

27. Resource Management Plan ¨ Identifies all of the resources required to complete the project successfully. ¨ Starts with the Work Breakdown Structure, add cost and period of performance elements to each level of the WBS. ¨ Defines resource categories, types, or other distinguishing attributes needed to identify resources for the project. ¨ This plan used to verify project has all the needed resources to successfully deliver the planned outcomes. 7 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

28. Risks Assigned to Deliverables ¨ Each attribute of each deliverable and the work needed to produce the deliverable needs a risk adjusted value. ¨ Each risk has a probability of occurrence, cost impact if not handled, cost to handle, residual probability after handling, and residual cost. ¨ The risk registry records this information as well as the period of exposure, the handling period, and the period remaining after handling is complete. 8 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

29. Risk Handling Assigned to Deliverables ¨ Capture all risk information in a Risk Management Tool, to be connected to the Integrated Master Schedule. 8 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

30. Measures of Performance (MoP) Measures of Performance are … ¨ Attributes that assure the system has the capability to perform, ¨ Assessment of the system to assure it meets design requirements to satisfy the MoE. 9 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

31. Establish the Performance Measurement Baseline The Performance Measurement Baseline (PMB) assesses progress to plan through measures of physical percent complete. Starting at the Work Package level, a pre–defined performance measure is established. During the performance period assessment of “progress to plan” produces measures of Physical Percent Complete Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

32. 5 Immutable Principles 5 Practices of Performance-Based Project Management® Identify Needed Capabilities Establish Requirements Baseline Performance Measurement Baseline (PMB) Execute the PMB Continuous Risk Management Where are we going? ConOps, SOO, SOW Technical and Operational Based Plan Incremental Maturity Measures Physical Percent Complete Risk Identification How are we going to get there? Integrated Master Plan (IMP) Work Breakdown Structure Integrated Master Schedule (IMS) Iterative and Incremental Delivery Risk Analysis What do we need along the way? Resource Management Plan Future Performance Forecasting Risk Planning What impediments will we encounter along the way? 4 Levels of Uncertainty Assessment Technical and Programmatic Risk handling assigned to all WBS deliverables Risk adjusted cost and schedule measures Risk adjusted Performance Measurement Baseline Risk Tracking How do we measure progress? Measures of Effectiveness (MoE) Measures of Performance (MoP) Technical Performance Measures Earned Value Management Risk Control

33. Build a time–phased network of schedule activities describing the work to be performed, the budgeted cost for this work, the organizational elements that produce the deliverables, and the performance measures showing this work is proceeding according to plan. 3.0 Decompose the Project Scope into a product based Work Breakdown Structure (WBS), then further into Work Packages describing the production of all deliverables traceable to the requirements 3.1 Assign Responsibility to Work Packages (the groupings of deliverables) for the named owner accountable for the management of resource allocation and cost baseline and technical delivery 3.2 Arrange the Work Packages in a well formed network with defined deliverables, milestones, internal and external dependencies, appropriate schedule and cost margin. 3.3 Develop a Time–Phased Budgeted Cost for Work Scheduled (BCWS) from labor and material costs in each Work Package and the Project as a whole. Assure proper resource allocations can be met and budget profiles match expectations of the program sponsor 3.4 Assign objective Measures of Performance (MOP) and Measures of Effectiveness (MOE) for each Work Package and summarize these for the Project as a whole 3.5 Establish a Performance Measurement Baseline (PMB) used to forecast Work Package and Project ongoing and completion cost and schedule metrics 3.6 Chapter VI33 Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

34. Establishing the Three Elements of the Performance Measurement Baseline Cost Baseline Schedule Baseline Technical Baseline Determine Scope and Approach Develop Technical Logic Develop Technical Baseline Develop WBS Define Activities Estimate Time Durations Sequence Activities Finalize Schedule Identify Apportioned Milestones Determine Resource Requirement Prepare Cost Estimate Resource Load Schedule Finalize Apportioned Milestones Determine Funding Constraints Approve PMB Perform Functional Analysis Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014 III

35. Incremental Maturity Assessments ¨ Maturity measures are defined through their technical performance measures appropriate for the stage of the project. ¤ Target performance – throughput, speed, reliability ¤ Target physical characteristics – mass, size ¨ Fidelity of a measure increases as the project moved from left to right. ¤ Broader bands early in the project, narrow bands as the delivery date nears. 10 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

36. Integrated Master Schedule (IMS) ¨ The Integrated Master Schedule (IMS) is an integrated schedule containing the networked, detailed tasks necessary to ensure successful program execution. ¨ The IMS is vertically traceable to the Integrated Master Plan (IMP) (if applicable), the Contract Work Breakdown Structure (CWBS), and the Statement of Work (SOW). ¨ The IMS shall be used to verify attainability of contract objectives, to evaluate progress toward meeting program objectives, and to integrate the program schedule activities with all related components. 11 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

37. Risk Adjusted Cost and Schedule ¨ Single point estimates of cost and duration are wrong without the underlying statistical variance. ¨ Cost risk is related to duration risk as well as inherent cost risk drivers. But these relationships are rarely linear and are always probabilistic in nature. ¨ All margin for cost and schedule must be derived from the model or some credible source. ¨ Management of this margin is embedded in the program controls processes. 12 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

38. Monte Carlo Risk analysis starts with a credible schedule and defines the probabilistic behavior of each activities and how it drives the deliverables 12 The Risk+ tool sets the upper and lower bounds of the durationsPerformance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

39. It shows 40% chance of completing on or before 2/10/03, the target completion date. Date: 2/25/2009 3:34:12 PM Samples: 300 Unique ID: 30 Name: Final Testing Completion Std Deviation: 5.51d 95% Confidence Interval: 0.62d Each bar represents 2d Completion Date Frequency CumulativeProbability Tue 2/11/03Mon 1/20/03 Mon 3/3/03 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 Completion Probability Table Prob ProbDate Date 0.05 Wed 1/29/03 0.10 Fri 1/31/03 0.15 Tue 2/4/03 0.20 Wed 2/5/03 0.25 Wed 2/5/03 0.30 Thu 2/6/03 0.35 Fri 2/7/03 0.40 Mon 2/10/03 0.45 Mon 2/10/03 0.50 Tue 2/11/03 0.55 Wed 2/12/03 0.60 Thu 2/13/03 0.65 Fri 2/14/03 0.70 Fri 2/14/03 0.75 Mon 2/17/03 0.80 Tue 2/18/03 0.85 Wed 2/19/03 0.90 Thu 2/20/03 0.95 Tue 2/25/03 1.00 Mon 3/3/03 12 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014 This 40% chance is not likely to be acceptable, so something needed to be done to increase the probability of success. This is the role of technical and programmatic management

40. Tie risk retirement to the Integrated Master Schedule ¨ Each risk reduction activity must be defined in the IMS, showing dates of reduction and dependencies to produce this reduction in risk. ¨ This integration provides credible evidence that risk is actually being managed. 12 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

41. Cost probability distributions change as a function of the weighted cost drivers 12 $ Cost Driver (Weight) Cost = a + bXc Cost Estimate Historical data point Cost estimating relationship Standard percent error boundsTechnical Uncertainty Combined Cost Modeling and Technical Uncertainty Cost Modeling Uncertainty Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

42. Managing margin from the Monte Carlo model means having Plan B not delay beyond Plan A 12 § Plan the risk alternatives that “might” be needed § Each mitigation has a Plan B branch § Keep alternatives as simple as possible (maybe one task) § Assess probability of the alternative occurring § Assign duration and resource estimates to both branches § Turn off for alternative for a “success” path assessment § Turn off primary for a “failure” path assessment 30% Probability of failure 70% Probability of success Plan B Plan A Current Margin Future Margin 80% Confidence for completion with current margin Duration of Plan B Plan A + Margin£ Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

43. Margin management means reusing margin on future work activities 12 § Programmatic Margin is added between Development, Production and Integration & Test phases § Risk Margin is added to the IMS where risk alternatives are identified § Margin that is not used in the IMS for risk mitigation will be moved to the next sequence of risk alternatives – This enables us to buy back schedule margin for activities further downstream – This enables us to control the ripple effect of schedule shifts on Margin activities 5 Days Margin 5 Days Margin Plan B Plan A Plan B Plan AFirst Identified Risk Alternative in IMS Second Identified Risk Alternative in IMS 3 Days Margin Used Downstream Activities shifted to left 2 days Duration of Plan B < Plan A + Margin 2 days will be added to this margin task to bring schedule back on track Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

44. Technical Performance Measures (TPM) Technical Performance Measures … ¨ Assess increasing maturity of the design progress ¨ Define compliance to performance requirements ¨ Identify technical risks and their handling strategies ¨ Are limited to critical thresholds for program success ¨ Include projected performance adherence within these critical thresholds 13 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

45. Technical Performance Measures (TPM)13 Variance Planned Value Planned Profile Current Estimate Milestones Threshold Upper Limit Lower Limit Mean To Between Failure Time = Program Maturity Achieved to Date TPM Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

46. Execute the Performance Measurement Baseline Using the Performance Measurement Baseline (PMB), each Work Package must start as planned, complete on or near the planned date, and produce the planned technical performance. This is the key to success for any credible Performance Base Management plan. In the absence of this, the program is behind schedule, over budget, and non–compliant with the technical goals. Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

47. 5 Immutable Principles 5 Practices of Performance-Based Project Management® Identify Needed Capabilities Establish Requirements Baseline Performance Measurement Baseline (PMB) Execute the PMB Continuous Risk Management Where are we going? ConOps, SOO, SOW Technical and Operational Based Plan Incremental Maturity Measures Physical Percent Complete Risk Identification How are we going to get there? Integrated Master Plan (IMP) Work Breakdown Structure Integrated Master Schedule (IMS) Iterative and Incremental Delivery Risk Analysis What do we need along the way? Resource Management Plan Future Performance Forecasting Risk Planning What impediments will we encounter along the way? 4 Levels of Uncertainty Assessment Technical and Programmatic Risk handling assigned to all WBS deliverables Risk adjustments to cost and schedule measures Risk adjusted Performance Measurement Baseline Risk Tracking How do we measure progress? Measures of Effectiveness (MoE) Measures of Performance (MoP) Technical Performance Measures Earned Value Management Risk Control

49. Physical Percent Complete ¨ Physical Percent Complete means tangible evidence of progress to plan. ¨ This evidence is defined before the work starts in units of measure meaningful to the decision makers. ¤ Number of units ¤ A Technical Performance Measure ¤ A compliance with specification, within error bands ¤ 0%/100% means defining what 100% means upfront 14 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

50. Iterative and Incremental Delivery ¨ Answer the question how long are you willing to wait before you find out you’re late? ¨ The primary role of iterative and incremental delivery is to provide sufficient time to correct any deficiencies in the deliverables before they show up late. ¨ Other advantages exist ¤ Feedback from users for technical improvement ¤ Adaptive requirements ¤ Rapid deployment of incremental usability 15 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

51. Future Performance Forecasting ¨ Using past performance and probabilistic modeling produce a forecast of future performance of cost, schedule, and technical performance. ¨ All forecasting is based on probabilistic confidence intervals for the project’s variables. ¨ These probabilistic estimates are driven by the underlying statistical processes of cost, schedule, and technical performance. 16 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

52. Risk Adjusted PMB ¨ All numbers in the Performance Measurement Baseline (PMB) are drawn from an underlying probability distribution. ¨ Making adjustments for the probabilistic nature of cost, schedule, and technical performance is mandated by good management practices. ¨ Monte Carlo Simulation of cost, schedule, and performance provides insight into the Probability of Program Success (PoPS). 17 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

53. Earned Value Management ¨ Assign a Planned Value (PV)(BCWS) to each element of work for all costs associated with developing the outcomes. ¨ Measure physical percent complete to calculate the Earned Value (EV)(BCWP) for that outcome at the planned time of completion. ¨ Record the Actual Cost (AC)(ACWP) to perform the work that produced the Earned Value. ¨ Calculate the Earned Value metrics needed to make management decisions. 18 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

54. Perform Continuous Risk Management This section is extracted from the Software Engineering Institute’s Continuous Risk Management (CRM) Guidebook. The CRM describes the underlying principles, concepts, and functions of risk management and provides guidance on how to implement it as a continuous practice in projects and organizations. Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

55. 5 Immutable Principles 5 Practices of Performance-Based Project Management® Identify Needed Capabilities Define Requirements Baseline Performance Measurement Baseline (PMB) Execute the PMB Continuous Risk Management Where are we going? ConOps, SOO, SOW Technical and Operational Based Plan Incremental Maturity Measures Physical Percent Complete Risk Identification How are we going to get there? Integrated Master Plan (IMP) Work Breakdown Structure Integrated Master Schedule (IMS) Iterative and Incremental Delivery Risk Analysis What do we need along the way? Resource Management Plan Future Performance Forecasting Risk Planning What impediments will we encounter along the way? 4 Levels of Uncertainty Assessment Technical and Programmatic Risk handling assigned to all WBS deliverables Risk adjustments to cost and schedule measures Risk adjusted Performance Measurement Baseline Risk Tracking How do we measure progress? Measures of Effectiveness (MoE) Measures of Performance (MoP) Technical Performance Measures Earned Value Management Risk Control

57. Risk Identification ¨ Transform uncertainties and issues about the program into distinct and tangible risks that can be described, assessed, and measured. ¨ Identify risks associated with technical and programmatic attributes of each deliverable and the associated processes. ¨ Two activities are involved in risk identification: ¤ Capture a statement of risk. ¤ Capturing the context of the risk. 19 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

58. A Well Written Risk Statement ¨ A well-written risk statement contains three components: ¤ Cause – The negative conditions that currently exist relative to the risk n Identification of root cause(s) of the risk n This provides justification that a risk exists ¤ Probability of Occurrence – The likelihood of the occurrence of the risk n Within a future time frame n Or a future event ¤ Consequence – The effect(s), negative impact(s) to the program(s) in case the risk occurs n The consequence should be related to at least cost, schedule, scope and performance n Consequence could also result in opportunities that may surface in correcting the problems 19 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

59. Risk Analysis ¨ Determine probability of occurrence and cost exposure. ¨ Examine risks in detail to determine the extent of the risks and how they relate to each other. ¨ Determine which risks are important. ¨ Analyzing risks has three activities: evaluate attributes of the risk, classify the risk, and rank the risk. 20 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

60. Risk Planning ¨ Make sure the consequences and sources (root cause) of risks are known. ¨ Develop effective risk plans to address not just the risk, but the root cause. ¨ Plan efficiently to handle the risk. ¨ Produce the correct set of actions that minimize risk and impacts. ¤ Buy down the risk – retirement plan ¤ Remove the root cause 21 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

61. Risk Tracking ¨ Collect accurate, timely, and relevant risk information. ¨ Present this information in a clear and easily understood manner appropriate to the groups receiving the status report. 22 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

62. Risk Control ¨ Correct for deviations from the risk handling plans. ¨ Update probability of occurrence, impact, and residual probability from the handling outcomes. ¨ Reassess risk ranking and handling plans after corrections have occurred. 23 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

63. 63 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014 Performance-Based Project Management® is a registered trademark of Niwot Ridge LLC Performance-Based Project Management: Increasing the Probability of Project Success, is Copyright 2014, American Management Association, ISBN 978-0-8144-3330-0

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