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Project Monitoring and Control


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Earned Value Analysis and Burn Graphs (from class in my MSc of Software Engineering program, 2004)

Published in: Technology, Business

Project Monitoring and Control

  1. 1. Project Monitoring and Control with EVA and Burn Graphs Guy Davis Kendra Hamilton Ed Dantsiguer
  2. 2. Agenda  Origins of EVA  EVA Explained  EVA Examples  Shortcomings of EVA  Agile side of EVA  Burn Graphs  Tools  Discussion
  3. 3. Overview of EVA  “The essence of [Earned Value Management Systems] is that some level of detail appropriate for the degree of technical, schedule, and cost risk or uncertainty associated with the program, a target value ….is established.” Paul Solomon 2002.
  4. 4. History of EVA  PERT/Cost (1963)  DoD Cost/Schedule Control Systems Criteria (C/ SCSC) (1967).  Government Performance and Results Act (1993), Federal Acquisition Streamlining Act, Title V (1994), Clinger-Cohen Act (1996)  EIA-748-1998 “Earned Value Management System”  Office of Management and Budget (Circular A-11, Part 7) (2003)
  5. 5. Motivation for EVA  Integrates work, cost, and schedule metrics.  Early warning signal.  Driving by looking in the front windshield instead of the rear view mirror. Statistical projection.  U.S. Government requirement.
  6. 6. EVA Explained 1/3  EVA concentrates on project management and control Requires a number of tasks to be  performed before utilizing EVA:  Work Breakdown Structure Cost (WBS)  Creation of detailed plan (critical path plan)  Includes all activities that have to Earned be performed, their durations, Value costs and relative contributions to Schedule Technical the overall deliverable Performance
  7. 7. EVA Explained 2/3
  8. 8. EVA Explained 3/3  EVA is used to determine current project performance and estimate/forecast future project performance  Based on 3 data points: Budgeted Cost of Work Performed (BCWP)  Actual Cost of Work Performed (ACWP)  Budgeted Cost of Work Scheduled (BCWS) 
  9. 9. Budgeted Cost of Work Performed  Planned (budgeted/estimated) cost of work that has been completed until this point  Answers: “How much was performed work supposed to cost?” Based on features/activities completed and  the budgeted amount for these features/ activities in the original project plan
  10. 10. Actual Cost of Work Performed  Actual cost of work that has been completed until this point  Answers: “What was the actual cost of work actually performed?” Based on features/activities completed and  cost of these features/activities in real life
  11. 11. Budgeted Cost of Work Scheduled  Planned (budgeted/estimated) cost of work that was supposed to be completed  Answers: “How much work should have been done and how much was it meant to cost?” Based on features/activities planned/scheduled and  the budgeted amount for these features/activities in the original project plan Budget at Completion (BAC) is the total funds allocated  (budgeted) for this project to complete
  12. 12. Derived Metrics  Schedule Variance (SV)  SV = BCWP – BCWS  Compares what is done with what was supposed to be done  SV < 0  project is behind schedule  Cost Variance (CV)  CV = BCWP – ACWP  Compares actual project cost with budgeted project costs  CV < 0  project is over budget
  13. 13. Schedule/Cost Performance Index  Schedule Performance Index (SPI)  SPI = BCWP/BCWS  SPI < 1  project is behind schedule  Cost Performance Index (CPI)  CPI = BCWP/ACWP  CPI < 1  project is over budget  Cost Schedule Index (CSI)  CSI = CPI * SPI  CSI < 1  project is not tracking to plan  The further away CSI is from 1, the less likely is successful project recovery
  14. 14. Using EVA Metrics in Project Control 1/2  Each individual EVA metric is not greatly useful on its own Metrics need to be considered as a group  Ex: Just because a project has a CSI of 1  does not imply that the project is doing well – it may be well ahead of schedule while also being well ahead of its budget
  15. 15. Using EVA Metrics in Project Control 2/2  ACWP metric can be used to project future activity costs/durations This is called Estimate To Completion (ETC)  The end of the projected ETC curve is  the Estimate At Completion (EAC)  estimated schedule and cost required to complete the project based on current productivity and spending Comparison between EAC and BAC shows is the  project is likely to be on schedule and/or on budget  Variance at Completion (VAC)  schedule difference between BAC and EAC
  16. 16. Recommended Performance Metric Values Per the “U.S. Marine Corps Acquisition Procedures Handbook,” June 1997
  17. 17. EVA Task Types  Discrete Effort Activities with start and end time that result in  deliverables  Apportioned Effort  Effort required to support discrete effort tasks (Ex: inspections, quality control)  Proportional to the type/size of discrete effort tasks that they support  Level of Effort Overhead activities with no concrete deliverables (Ex:  management and administrative activities)
  18. 18. Crediting Earned Value  Discrete Effort Credited upon completion with actual cost and duration  tracked  Apportioned Effort  Credited upon completion of related discrete effort tasks  Level of Effort Credited according to plan (regardless of actual cost  and duration)
  19. 19. Crediting Earned Value Methods  Milestone Events  Weighted Milestone Gates  Percentage Complete  Fixed Formula  Level of Effort  Percentage Complete and Milestone Gates
  20. 20. EVA Example 1/2  Planned/Scheduled Data: Duration of 10 months  Includes 10 features with multiple tasks  Budget of $100 million   Actual After 6 Weeks: 55% of the work has been completed  $85 million has been spent 
  21. 21. EVA Example 2/2 Earned Value Analysis 200 150 Cumulative Spending 100 BCWS BCWP ACWP ETC 50 0 0 3.75 7.5 11.25 15 Time, Working Weeks
  22. 22. Success Factors for EVA  Quality of the baseline; need to include all details.  Take action early based on performance indicators. “I hate everything that merely instructs me without augmenting or directly invigorating my activity” Goethe
  23. 23. Shortcomings of EVA  Based on past performance; assumes constant rate of spend and value creation Assumes a direct relationship between time and cost.  Value measured in technical components, not  expected business value. Project must be fully defined at outset; the devil is in  the details. Time required for measuring project’s progress 
  24. 24. EVA Tools  Excel  Welcom “Cobra”  Schedulemaker  Planisware “OPX2”  RiskTrak  Winsight  Primavera Systems
  25. 25. EVA compared to Agile  Full project view vs. Iterative view  Tasks fully defined vs. Changing requirements  Attempts to forecast future vs. Determination of next iteration  EVA is not suitable for truly “Agile” projects
  26. 26. EVA in an Agile/Iterative Project  Approach 1: Stories = BCWS  Tasks = BCWS in more detail  Assignments = ACWP  Velocity = BCWP  Testable requirements = 0% or 100% BCWP 
  27. 27. EVA in an Agile/Iterative Project  Approach 2: Do EVA on individual iterations   Approach 3:  Generate micro estimations for current iteration and macro estimations for future iterations
  28. 28. Burn Graphs  Origins of Burn Graphs Cumulative flow diagrams from lean production   Goal: to provide a succinct view of progress.  Allows project sponsors to steer the project.  Allows scrum master report visually to stakeholders. Allows the team to gain experience estimating  by getting direct feedback. (Empowering)
  29. 29. Burn-Down Graphs  Shows remaining estimated effort on item Usually in ideal engineering time (IET hours)   Calculated for any level of task abstraction
  30. 30. Scrum Backlog Graphs  Product Backlog Graph High-level view of overall project progress.  Completion date: work left versus resources  available. Quantitative tool for making trade-offs.   Sprint Backlog Graph Detailed view of a single sprint's progress.  Sprint signatures: compare current with past  results. First notice of schedule slips seen here. 
  31. 31. Not always pretty...
  32. 32. Burn-up Graphs  Shows progress on completion of item Usually displays percentage complete  Just the inverse of a burn-down graph 
  33. 33. Cumulative Flow Diagrams  Tracks number of features (and status) over time  Better for reporting than: % complete graph of feature milestone percentages  Features completed over time 
  34. 34. Overview of Burn Graphs Drawbacks Benefits  Metric choice is key  Easy to compile/track  Over-simplification?  Feedback to the team and status to the Hides dependencies  customer Should be able to   Highlights: zoom to see levels Schedule slips  Traditionalists will resist  implementation? Scope creep 
  35. 35. Burn Graph Tools  Open-source Outreach Project Tool (OPT)  XPlanner   Commercial  Version One MS Excel 
  36. 36. References Anderson, David J. “Using Cumulative Flow Diagrams with FDD”. Feature Driven Development. 2003. http://  Anderson, David J. Agile Management for Software Engineering. Prentice Hall. 2003  Alleman, Glen B., Henderson, Michael, “Making Agile Development Work in a Government Contracting  Environment” Proceedings of the Agile Development Conference, IEEE, 2003. Fleming, Quentin W., Koppelman, Joel M., “Earned Value Project Management: A Powerful Tool for Software  Projects”, Crosstalk, July 1998. Hayes, Heather, “Using Earned-Value Analysis to Better Manage Projects”, Pharmaceutical Technology,  February 2002. Howes, Rodney “Improving the Performance of Earned Value Analysis as a Construction Project Management  Tool”, Engineering, Construction and Architectural Management, 2000. Schwaber, Ken and Mike Beedle. Agile Software Development with Scrum. Prentice Hall. Upper Saddle River,  NJ. 2002 Solomon, Paul J., “Practical Software Measurement, Performance-Based Earned Value,” Crosstalk,  September, 2002.
  37. 37. Discussion Points  Can EVA be applied to agile projects?  What metrics would you use for burn graphs?  Would you adopt burn graphs at your organization?