This document discusses how to create value from earned value management (EVM) using both bottom-up and top-down approaches. It emphasizes that EVM metrics like SPI and CPI do not capture the underlying statistical nature of projects, and that modeling this requires stochastic modeling and Monte Carlo simulation. It also stresses that creating value from EVM requires relating budgets to work, measuring progress objectively, and relating cost, schedule, and technical performance.
Earned Value Management involves more that just cost and schedule. Six Business Systems, including EVM, are the basis of credible program performance management.
Here's a suggestion of how to "connect the dots."
Presented to the American Society for Quality (ASQ) section 511 for Quality professionals to use to evaluate the methods and results of earned value management on prohects
A simple approach to understanding Earned Value ManagementProPM Academy
The slide on Earned Value Management focuses on explaining the concepts in a simpler approach. The slides shows about how a project manager can use the Earned value concepts to depict his project progress, variance on the key performance measurement baseline. Project forecasting is been discussed separately with examples.
We are sure that the slides posted above, it would help potential as well as experienced PMs to gain a good insight into the EVM concepts
Hope you found this useful
Any queries / clarifications are most welcome
Earned Value Management involves more that just cost and schedule. Six Business Systems, including EVM, are the basis of credible program performance management.
Here's a suggestion of how to "connect the dots."
Presented to the American Society for Quality (ASQ) section 511 for Quality professionals to use to evaluate the methods and results of earned value management on prohects
A simple approach to understanding Earned Value ManagementProPM Academy
The slide on Earned Value Management focuses on explaining the concepts in a simpler approach. The slides shows about how a project manager can use the Earned value concepts to depict his project progress, variance on the key performance measurement baseline. Project forecasting is been discussed separately with examples.
We are sure that the slides posted above, it would help potential as well as experienced PMs to gain a good insight into the EVM concepts
Hope you found this useful
Any queries / clarifications are most welcome
Earned Value Management (EVM) is an effective tool for project performance measurement that, if planned properly, can play a vital role for project success. EVM is based on scope, time and cost only while risks are not accounted for in planning process. Moreover, there are difficulties in acquiring real-time Actual Cost (AC) data for continuous monitoring and control, mainly due to the communication gap between engineers and accountants. Researchers have proposed different extensions of EVM for specific projects and in general. In order to apply the proposed EVM extensions, a real-time tourism facility project with sustainable energy & water resource at Kund Malir, Baluchistan is taken as a model. Costs, schedules, scope and risks are hypothetical in the model. Planned EVM is applied to the model with and without risks. Risk Costs and Scheduled Buffers are added in Planned Value (PV) calculations basing on probability-impact matrix factors. Furthermore, task level EVM models or Task-EVMs are integrated into Project-EVM or Master-EVM in order to minimize the problems being faced in acquiring real-time data. Industry specific application and research of EVM extensions proposed in this paper can be a good area for future research. Moreover, establishment of tourism facilities at unexplored or less explored areas of Sindh and Baluchistan can be another real-time research as well as a business project.
This lecture provides a short but comprehensive review of earned value analysis and how this technique helps us to determined the project financial and schedule situation.
A short course on being an Earned Value Management Control Account Manager. What is you role, to whom are you accountable, what does you CAM Notebook look like, what role does EVM play in your weekly management activities, what are the sources of information needed to manage the Control Account, what is your weekly and monthly business rhythm, a quick look at Risk Management, and what's beyond this short course?
Earned Value Management is an important topic for PMP and PMI ACP Exam. Since the questions related with Earned Value Management are based on formulas so with practice, these concepts can be mastered and these questions can be answered confidently in the exam.
project control using earned value analysis - Part 01 waleed hamdy
Project control using earned value analysis - Part 01
Mission of the projects control division
Why the earned value management?
Establishment of the Performance Measurement Baseline
EVM Analysis & Forecasting
A simple example of Earned Value Management (EVM) in actionPlanisware
A simple example of Earned Value Management (EVM) calculations to illustrate the EVM article on Planisware's online Project Portfolio Management glossary.
Earned Value Management (EVM) is an effective tool for project performance measurement that, if planned properly, can play a vital role for project success. EVM is based on scope, time and cost only while risks are not accounted for in planning process. Moreover, there are difficulties in acquiring real-time Actual Cost (AC) data for continuous monitoring and control, mainly due to the communication gap between engineers and accountants. Researchers have proposed different extensions of EVM for specific projects and in general. In order to apply the proposed EVM extensions, a real-time tourism facility project with sustainable energy & water resource at Kund Malir, Baluchistan is taken as a model. Costs, schedules, scope and risks are hypothetical in the model. Planned EVM is applied to the model with and without risks. Risk Costs and Scheduled Buffers are added in Planned Value (PV) calculations basing on probability-impact matrix factors. Furthermore, task level EVM models or Task-EVMs are integrated into Project-EVM or Master-EVM in order to minimize the problems being faced in acquiring real-time data. Industry specific application and research of EVM extensions proposed in this paper can be a good area for future research. Moreover, establishment of tourism facilities at unexplored or less explored areas of Sindh and Baluchistan can be another real-time research as well as a business project.
This lecture provides a short but comprehensive review of earned value analysis and how this technique helps us to determined the project financial and schedule situation.
A short course on being an Earned Value Management Control Account Manager. What is you role, to whom are you accountable, what does you CAM Notebook look like, what role does EVM play in your weekly management activities, what are the sources of information needed to manage the Control Account, what is your weekly and monthly business rhythm, a quick look at Risk Management, and what's beyond this short course?
Earned Value Management is an important topic for PMP and PMI ACP Exam. Since the questions related with Earned Value Management are based on formulas so with practice, these concepts can be mastered and these questions can be answered confidently in the exam.
project control using earned value analysis - Part 01 waleed hamdy
Project control using earned value analysis - Part 01
Mission of the projects control division
Why the earned value management?
Establishment of the Performance Measurement Baseline
EVM Analysis & Forecasting
A simple example of Earned Value Management (EVM) in actionPlanisware
A simple example of Earned Value Management (EVM) calculations to illustrate the EVM article on Planisware's online Project Portfolio Management glossary.
This presentation is from the free online course, which i delivered in February 2013.
*If you downloaded before the 8th August, please download again the correct file* -Feel free to download and share. -Denise
Introduction
Overview of Key Performance Indicators ( KPI )
What Is The Earned Value Management ?
Why Project Managers Use EVM ?
Earned Value Management Terms and Formulas
Planned value (PV)
Earned value (EV)
Actual cost (AC)
Variance
Schedule Variance ( SV )
Cost Variance ( CV )
Performance Index
Schedule Performance Index (SPI)
Cost Performance Index (CPI)
Example ( Case Study )
Project Forecasting
Budget at Completion (BAC)
Estimate at Completion (EAC)
Estimate to Complete (ETC).
Variance at Completion (VAC)
To Complete Performance Index (TCPI)
This webinar was presented by Stephen Jones, Chair of the APM Planning, Monitoring and Control SIG and Simon Taylor, Vice-Chair of the same SIG on Thursday 11th December 2014.
Earned value management is a project control process based on a structured approach to planning, cost collection and performance measurement.
Earned value helps us manage a project by:
providing data to enable objective measurement of project status;
providing a basis for estimating final cost;
predicting when the project will be complete;
supporting the effective management of resources;
providing a means of managing and controlling change.
Earned value provides information which enables effective decision making by knowing:
what has been achieved of the plan;
what it has cost to achieve the planned work;
if the work achieved is costing more or less than was planned;
if the project is ahead of or behind the planned schedule.
Good planning leads to good project execution and good management information.
IS EARNED VALUE + AGILE A MATCH MADE IN HEAVEN?
Increasing the Probability of Program Success requires by connecting the dots between EV and Agile Development.
Presented at
The Nexus of Agile Software Development and
Earned Value Management, OSD-PARCA,
February 19 – 20, 2015
Institute for Defense Analysis, Alexandria, VA
Earned Value Management Meets Big DataGlen Alleman
The Earned Value Management System (EVMS) maintains period–by–period data in its underlying databases. The contents of the Earned Value repository can be considered BIG DATA, characterized by three attributes – 1) Volume: Large amounts of data; 2) Variety: data comes from different sources, including traditional data bases, documents, and complex records; 3) Velocity: the content is continually being updated by absorbing other data collections, through previously archived data, and through streamed data from external sources.
With this time series information in the repository, analysis of trends, cost and schedule forecasts, and confidence levels of these performance estimates can be calculated using statistical analysis techniques enabled by the Autoregressive Integrated Moving Average (ARIMA) algorithm provided by the R programming system. ARIMA provides a statistically informed Estimate At Completion (EAC) and Estimate to Complete (ETC) to the program in ways not available using standard EVM calculations. Using ARIMA reveals underlying trends not available through standard EVM reporting calculations.
With ARIMA in place and additional data from risk, technical performance and the Work Breakdown Structure, Principal Component Analysis can be used to identify the drivers of unanticipated EAC.
Recent College of Performance Management Webinar on using Technical Performance to inform Earned Value Management. Six steps to building a credible Performance Measurement Baseline to connect the dots between all the elements of the program
Earned value management with Examples | Control Cost | PMBOK | PMPJustAcademy
Earned Value Management topic from Control Cost – Cost Management
What is Earned Value Management
Explained EVM with examples
Cost Variances (CV )
Cost Performance Index(CPI)
Schedule Variances(SV)
Schedule Performance Index(SPI)
Cost Overrun and Project Slip
PMP Training in USA,PMP Training in California,PMP Training in Qatar,PMP training in Saudi Arabia,PMP training in India,PMP training in Mumbai,PMP Training in Hyderbad,
PMP Training in Chennai,PMP Training in Canada
Starting with an EIA–748–C compliant Earned Value Management System, integrating an Agile Software Development Lifecycle (Agile) is straightforward when there is a Bright Line between the Performance Measurement Baseline (PMB) and the Sprints and Tasks of the Agile Software Development Process.
The resources listed here are the starting point for anyone interested in applying the principles developed in this briefing for integrating Agile with Earned Value Management projects
Building a Credible Performance Measurement BaselineGlen Alleman
Establishing a credible Performance Measurement Baseline, with a risk adjusted Integrated Master Plan and Integrated Master Schedule, starts with the WBS and connects Technical Measures of progress to Earned Value
EAI-748-C asks us to objectively assess accomplishments at the work performance level. As well §3.8 of 748-C tells us Earned Value is a direct measurement of the quantity of work accomplished. The quality and technical content of work is controlled by other processes. To provide visibility to integrated cost, schedule, and technical performance, we need more than CPI and SPI. We need measures of increasing technical performance.
Building a Credible Performance Measurement BaselineGlen Alleman
Establishing a credible Performance Measurement Baseline, with a risk adjusted Integrated Master Plan and Integrated Master Schedule, starts with the WBS and connects Technical Measures of progress to Earned Value
Building A Credible Measurement BaselineGlen Alleman
Establishing a credible Performance Measurement Baseline, with a risk adjusted Integrated Master Plan and Integrated Master Schedule, starts with the WBS and connects Technical Measures of progress to Earned Value
EIA-748-C asks us to “objectively assess accomplishments at the work performance level.” As well §3.8 of 748-C tells us “Earned Value is a direct measurement of the quantity of work accomplished. The quality and technical content of work performed is controlled by other processes.”
Making Agile Development work in Government ContractingGlen Alleman
Before any of the current “agile” development
methods, Earned Value Management provided information
for planning and controlling complex projects by
measuring how much “value” was produced for a given
cost in a period of time. One shortcoming of an agile
development method is its inability to forecast the future
cost and schedule of the project beyond the use of “yesterdays
weather” metrics. These agile methods assume
the delivered value, “velocity” in the case of XP, is compared
with the estimated value – this is a simple comparison
between budget and actual cost resulting in a Cost
Variance.
There are four major questions that need answers when applying agile software development to DOD development programs
1. How can Agile Development methods increase the Probability of Program Success (PoPS) on Earned Value programs?
2. How can Agile development be integrated with the FAR / DFAR and OMB mandates for program performance measures using Earned Value?
3. What are the “touch” points (or possible collision points) between Agile and EIA-748-C?
4. What are the measures of success for Agile methods in the context of EIA-748-C?
Agile Project Management Meets Earned Value ManagementGlen Alleman
Earned Value Management (EV) provides information for planning and controlling complex projects including software development. However, EV’s emphasis on retrospective data and the concept of driving in the rearview mirror is its primary shortcoming. Agile software development systems provide mechanisms to adapt to changing requirements in low ceremony environments. The primary shortcoming of Agile development is its inability to participate in government and commercial development environments where requirements, staffing, and funding are managed informal ways. Instead of requiring the high ceremony environment to abandon its methods, combining Agile development activities with earned value management is the approach used in this experience report. The principle management concern in every environment, high or low ceremony, is how much value is being delivered for the invested funds? The answer to this question is the domain of the metrics of EV. Merging EV with Agile development processes creates new synergies by leveraging the best of both processes in a variety of domains.
Five Immutable Principles of Project of Digital Transformation SuccessGlen Alleman
Successful Digital Transformation projects are fraught with technical, cost, and schedule risks.
These Five Principles of Project Success have been shown to increase the Probability of Project Success (PoPS).
How should we estimates agile projects (CAST)Glen Alleman
“Why do so many big projects overspend and
overrun? They’re managed as if they were merely
complicated when in fact they are complex. They’re planned as if everything was known at the start when in fact they involve high levels of uncertainty and risk.” ‒ Architecting Systems: Concepts, Principles and Practice, Hillary Sillitto
Building a Credible Performance Measurement Baseline (PM Journal)Glen Alleman
Establishing a credible Performance Measurement Baseline, with a risk adjusted Integrated Master Plan and Integrated Master Schedule, starts with the WBS and connects Technical Measures of progress to Earned Value
Chapter 0 of Performance Based Project Management (sm)Glen Alleman
Defining the needed capabilities is the critical success factor proejct success. The capabilities state what Done looks like in units of measure meaningful to the decision makers.
Planning projects usually starts with tasks and milestones. The planner gathers this information from the participants – customers, engineers, subject matter experts. This information is usually arranged in the form of activities and milestones. PMBOK defines “project time management” in this manner. The activities are then sequenced according to the projects needs and mandatory dependencies.
Increasing the Probability of Project SuccessGlen Alleman
Risk Management is essential for development and production programs. Information about key cost, performance and schedule attributes are often uncertain or unknown until late in the program.
Risk issues that can be identified early in the program, which may potentially impact the program, termed Known Unknowns, can be alleviated with good risk management. -- Effective Risk Management 2nd Edition, Page 1, Edmund Conrow, American Institute of Aeronautics and Astronautics, 2003
Cost and schedule growth for complex projects is created when unrealistic technical performance expectations, unrealistic cost and schedule estimates, inadequate risk assessments, unanticipated technical issues, and poorly performed and ineffective risk management, contribute to project technical and programmatic shortfalls
From Principles to Strategies for Systems EngineeringGlen Alleman
From Principles to Strategies How to apply Principles, Practices, and Processes of Systems Engineering to solve complex technical, operational,
and organizational problems
Capabilities‒Based Planning the capabilities needed to accomplish a mission or fulfill a business strategy
Only when capabilities are defined can we start with requirements elicitation
Starting with the development of a Rough Order of Magnitude (ROM) estimate of work and duration, creating the Product Roadmap and Release Plan, the Product and Sprint Backlogs, executing and statusing the Sprint, and informing the Earned Value Management Systems, using Physical Percent Complete of progress to plan.
Program Management Office Lean Software Development and Six SigmaGlen Alleman
Successfully combining a PMO, Agile, and Lean / 6 starts with understanding what benefit each paradigm brings to the table. Architecting a solution for the enterprise requires assembling a “Systems” with processes, people, and principles – all sharing the goal of business improvement.
This resource document describes the Program Governance Road map for product development, deployment, and sustainment of products and services in compliance with CMS guidance, ITIL IT management, CMMI best practices, and other guidance to assure high quality software is deployed for sustained operational success in mission critical domains.
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
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Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
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𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
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Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
The key differences between the MDR and IVDR in the EUAllensmith572606
In the European Union (EU), two significant regulations have been introduced to enhance the safety and effectiveness of medical devices – the In Vitro Diagnostic Regulation (IVDR) and the Medical Device Regulation (MDR).
https://mavenprofserv.com/comparison-and-highlighting-of-the-key-differences-between-the-mdr-and-ivdr-in-the-eu/
The key differences between the MDR and IVDR in the EU
Earning Value from Earned Value Management
1. EARNING VALUE FROM EARNED
VALUE
USING EV TO IMPROVE THE
PROBABILITY OF PROJECT SUCCESS
EVM WORLD 2009
PMI-CPM 25TH ANNUAL
INTERNATIONAL CONFERENCE
1
2. Learning Outcomes
Cost and Schedule Indices (SPI, CPI, TCPI, and IEAC)
do not represent the underlying statistical nature of
projects.
Modeling this statistical behavior requires addition
activities build around Monte Carlo simulation and
stochastic modeling.
Creating value from the Earned Value requires both
bottom-up and a top-down work processes.
2
3. 3
Creating Value from EV is More Than Calculating SPI and CPI
LAUNCH ABORT SYSTEM FOR ORION CAPSULE
What are the technical requirements that fulfill the mission
capabilities?
How is the work partitioned for the producing the deliverables
that fulfill these requirements?
What are the Work Packages, Cost and Schedule elements
and programmatic risk elements to assure on-time, on-
budget performance?
CONSTELLATION MISSION TO THE MOON
What capabilities are needed to fulfill the mission?
How are these capabilities connected to the technical and
operational requirements?
What are the programmatic trade space decisions between
capabilities, requirements, cost and schedule?
BRICK LAYING PROJECT
What are the measures of scope, effort, and duration?
What are the measures of physical percent complete?
Can we forecast of final cost and completion date?
What Does Done Look Like?
How will we recognize done?
What is the unit of measure of Done?
4. Questions Every Program Manager Needs to Ask
and Answer
How much money will I need to complete this
program on time and on specification?
What is my confidence that we’ll complete on or
before the planned finish date?
Do I have enough management reserve to protect
this finish date?
What is the inherent risk built into my cost and
schedule baseline?
How can I tell if the program is making progress to
plan?
4
7. This progress is
represented by physical,
tangible, measurably
quantifiable evidence.
How much did we
plan to get done on
this date, measured in
Dollars?
How much did we
actually get done on
this date, measured in
Dollars?
In This Standard Paradigm …
Earned Value = Physical Percent Complete of the Planned Value
7
8. What About the Planned Technical Performance?
We’re On Schedule, On Budget
But We Had A Slight Technical Problem With Our Flying Machine
8
9. 9
From the NDIA Earned Value Intent Guide (EVIG)
Notice the inclusion of Technical along with
Cost and Schedule
That’s the next step is generating Value from Earned Value
EV MUST include the Technical Performance Measures
10. 10
Relate time-phased budgets to specific contract tasks and/or statements of
work (SOW)
Objectively measure work progress
Properly relate cost, schedule, and technical accomplishment
Allow for informed decision making and corrective action
Is valid, timely, and able to be audited
Allow for statistical estimation of future costs
Supply managers at all levels with status information at the appropriate
level, and
Is derived from the same EVM system used by the contractor to manage
the contract.
The First Set of Promises That Need Actionable Steps
11. The EV numbers are just
numbers
They can show trends
They can be the basis of
forecasts
But they must be placed in a
context of an underlying
statistical model
They must be connected with
the relationship between time
and money
11
Moving from reporting the past
performance to forecasting the
future is the first step in Earning
Value from Earned Value
Management
12. Does Money
Equal Time?
This is How EV
Measures
Schedule
Variance
But What If It Is
Not Linear?
Time Is Not Money
Unless They Are
Linearly Related
12
13. The REAL Problem
Models Of Earned Value Are Inherently Probabilistic With Interdependent
Couplings Between Network Elements
13
18. Questions Every Program Manager Needs to Ask
and Answer – Part 2
How much money will I need to complete this
program on time?
What is my confidence that we’ll complete on or
before the planned finish date?
Do I have enough management reserve?
What is the inherent risk built into my cost and
schedule baseline?
How can I tell if the program is making progress to
plan?
20. How Can We
Get A Return
On Our
Investment In
Earned Value?
20
21. Some Straight Forward Benefits†
Better Visibility into Program Performance
Reduce Cycle Time to Deliver a Product
Foster Accountability
Reduce Risk
† From the DACS Gold Practices “Track Earned Value” Focus Area
22. The Missing Piece Is “How” To Obtain
These Benefits
How do we create better visibility into the program’s performance?
How do we reduce cycle time to deliver the product?
How do we foster accountability?
How do we reduce risk?
Deploying Earned Value Alone Will Not Get Us There
How Do We Get From Where We Are To Our Destination?
22
23. Claimed Benefit The Reason The Method to Achieve
Better Visibility
into Program
Performance
The combination of advance
planning, baseline maintenance,
and earned value analysis yields
earlier and better visibility into
program performance than is
provided by non-integrated
methods of planning and
control.
This requires a credible baseline.
But this baseline must be more
than just a list of work, it must
represent the “Programmatic
Architecture” of the system,
matching the technical
architecture.
This programmatic architecture
formulates the flow of work that
produces products with
increasing maturity.
Step Action Details
Define the
Integrated Master
Plan (IMP)
The IMP is the Strategy for the successful completion of the program.
It is formed from Program Events, the Significant Accomplishments
(SA), and their Accomplishment Criteria (AC).
Sequence the SAs The sequence of SAs for each single PE by the IPT’s is a diagram
sufficiently detailed to show how the increasing maturity of the
deliverables can be achieved.
Assign Budget
Estimates (BOE)
Collect the initial “basis of estimate” from the duration and sequence
of these SAs
23
24. Claimed Benefit The Reason The Method to Achieve
Reduces Cycle
Time to Deliver
a Product
Earned Value Management is
premised on careful detailed
planning – task decomposition,
scheduling, and budgeting.
This planning often addresses or
prevents problems from surfacing
later in the effort that result in
rework.
As rework is prevented cycle time
may be reduced.
Again the carefully detailed plan
must adequately represent a
credible schedule, cost
allocation, and resource
assignments.
How can we know this is the
case?
Step Action Details
Reduce cycle
time by
forecasting
delay
Using TCPI and IEAC the macro level forecast (scalar) can be generated.
What is needed is to locate the specific tasks that are the source of this
delay. This is a network analysis process.
Identify
alternative paths
through the IMS
With the network process flow indentified, alternative paths can be
assessed. These path have associated cost and down stream schedule
impacts that need further analysis.
Probabilistic cost
and schedule
The result is a probabilistic cost and schedule analysis coupled with a
Monte Carlo simulation tool to construct the “probabilistic critical path?
24
25. Claimed Benefit The Reason The Method to Achieve
Fosters
Accountability
When the engineer understands
how the pieces fit the overall
project effort, they tend to focus
on delivery of a quality product.
Over time they are better able to
estimate the work required to
complete a task, thereby
improving the overall accuracy of
the budget / estimating process
for future efforts.
Defining the logical sequence of
product or service flow is the
starting point.
This “systems engineering”
approach starts with a
description of the “increasing
maturity” of the product or
service, and only then assigning
the Earned Value elements
Step Action Details
Work Package
budgets owned
by producers of
value
Once the Value Stream as been defined – this is the logical flow of the
Significant Accomplishment – the ownership for producing this value is
identified in the Work Package owners.
Dependencies
between WPs is a
Systems
Engineering
process
The Value Stream of the collection of Work Package must remove an
impediments to maximizing this value. This is the role of the planning
and controls staff in conjunction with the subject matter experts
accountable for delivering the technical solution. As a collective they
are accountable for the resulting value stream.
25
26. Claimed Benefit The Reason The Method to Achieve
Reduces Risk Because earned value measures
enable realistic estimates of
completion to be derived early in
the project, it is possible to make
adjustments and take corrective
action to mitigate the risk of cost
overruns and schedule slippage.
Probabilistic risk analysis
requires a credible baseline and
an understanding of the
underlying probabilistic process
driving cost, schedule, and
technical performance
If the probabilistic process is
stationary, a Monte Carlo
simulation can be used to
analyze the behaviors of the
system only as a stationary
model.
Step Action Details
Probabilistic
modes expose
risk
Only probabilistic models “enable realistic estimates.” No point
estimate in the absence of a variance is credible.
Risk adjusted
work in IMS
All risk mitigation and retirement activities need to be in the IMS, along
with funding profiles and probabilistic assessment of their
effectiveness. EV alone will not address the issues. An active Risk
Management process is needed.
26
27. STEPS NEEDED TO EARN THE
VALUE FROM EARNED VALUE
THE TOP DOWN APPROACH
27
28. 28
The Cost of These
Benefits Is Already Built
Into a Credible PMB
The BCWS spreads define visibility
into costs
The sequence of Significant
Accomplishments (SA) defines
visibility into deliverables
Risk mitigations, buy downs, and
retirements are embedded in the PMB
Small incremental measures of value
are defined by Work Packages
Visibility provided through measures
of physical percent complete
Reduced cycle is actually just
maintaining the planned completion
dates, on budget, that meet the
planned technical performance
measurements
29. Five Core Processes of Successful Program
Planning and Controls
29
Program Success Process Areas Questions To Be Answered
Identify Needed System Capabilities
What capabilities are needed to fulfill the
ConOps and System Requirements?
Establish the Requirements Baseline
What technical and operational
requirements are needed to fulfill these
capabilities?
Establish the Performance Measurement
Baseline
What is the schedule that delivers product
or services that meet the requirements?
Execute the Performance Measurement
Baseline
What are the periodic measures of
physical percent complete?
Perform Continuous Risk Management
What are the impediments to success and
what are the mitigations ?
30. Partition system capabilities into classes of service within operational scenarios
Connect capabilities to system requirements using sysML
Define Measures of Effectiveness (MOE) and Measures of Performance (MOP)
Define in the delivery schedule the achievement of each Technical Performance Measure
Define
Operational
Concepts
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
Define
Capabilities
Needed To
Implement
Concepts
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
Assess Needs,
Costs and Risks
Simultaneously
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
Explicit,
Balanced, and
Feasible
Alternatives
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.
Identify Needed
System
Capabilities
What capabilities are needed to fulfill the ConOps and System Requirements?
1.0
1.1
1.2
1.3
1.4
30
31. 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.
Perform Fact
Finding
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.
Gather
and Classify
Requirements
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.
Evaluate
and Rationalize
Requirements
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.
Prioritize
Requirements
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.
Integrate
and Validate
Requirements
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.
Establish the
Requirements
Baseline
What Technical and Operational Requirements are Needed to Fulfill the Capabilities?
2.0
2.1
2.2
2.3
2.4
2.5
31
32. 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
Decompose
Scope into Work
Packages
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
Assign
Responsibility
for Deliverables
Arrange the Work Packages in a well formed network with defined deliverables,
milestones, internal and external dependencies, appropriate schedule and cost
margin.
Arrange
Work Packages
in Logical Order
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 project sponsor
Develop
BCWS for Work
Packages
Assign object Measure of Performance (MOP) and Measures of Effectiveness (MOE) for each
Work Package and summarize these for the Project as a whole
Assign WP
Measures of
Performance
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.
Establish
the Performance
Measurement
Baseline
A Baselined Schedule that Creates the Services or Products to Meet The Requirements
3.0
3.1
3.2
3.3
3.4
3.5
Establish a Performance Measurement Baseline (PMB) used to forecast Work Package
and Project ongoing and completion cost and schedule metrics
Set
Performance
Measurement
Baseline
3.6
32
34. 34
5 Practice Areas of Successful Program Controls
How
Where
When
Who
Why
What
Identify Business
Needs
Establish a
Performance
Measurement
Baseline
Execute the
Performance
Measurement
Baseline
Capabilities
Based Plan
Operational
Needs
Earned Value
Performance
0% /100%
Technical
Performance
Measures
System Value
Stream
Technical
Requirements
Identify
Requirements
Baseline
1
2
3
4
Technical
Performance
Measures
PMB
Continuous Risk Management Process
Changes to
business strategy
Changes to
requirements
Changes to
project plan
1
2
3
4
5
6
7
8
9
10
10OrganizingPrinciplesofDeliverablesBasedPlanningsm
35. The 10 Organizing Principles That
Drive The 5 Practice Areas
35
Capabilities Drive
Requirements
Requirements are
Fulfilled by Work
Packages
Work Packages
Define Deliverables
Measure Physical
Percent Complete of
Each WP
Perform Only
Authorized Work
Earned Value
Defines Progress
Adjust EV for Technical
Performance
Measure
Use Past
Performance to
Forecast Future
Performance
1
2
3
5
6
7
8
9
10
PMB Describes
Work Sequence
4
9
Assess the capabilities being provided through the deliverables
Fulfill the requirements through effort held in the Work Packages
Produce deliverables
from Work Packages
Planned BCWS
Physical % Complete
WP’s contain
deliverables that fulfill
requirements
Capabilities
topology
defines
requirements
flow down
WP flow must describe
the increasing maturity of
the product or service
Producing the deliverables in the
planned sequence maintains the
value stream to the customer
36. Business Management Is the Purpose of 748B
½ of the Criteria are NOT About Dollars
The Units of Measure in Earned Value
36
37. Connecting Principles With Earned
Value Processes
37
ANSI/EIA-748B Areas
10 Principles Driving Program
Controls Success
Organization
Planning and
Budgeting
Accounting Analysis Revisions
Capabilities Drive Requirements WBS
Requirements Identify Deliverables WBS
Work Packages Describe
Production of Deliverables
WBS
CWBS
IPTs
BCWS
Master Schedule Sequences
Deliverables through WPs
IMS IMS
Progress Must Be Measured As
Physical Percent Complete
Perf Measure
0/100 or AP
TPM
Work Authorization Assures Proper
Sequencing of Work Packages
OBS WAD
Late Starts
Late Finishes
CCB
Earned Value Identifies Current
Deliverables Performance
Physical %
Complete
BCWP Monte Carlo
Technical Performance Measures
Adjust Earned Value
TPM Measure TPM Monte Carlo
Performance Feedback Adjusts
Work Package Sequencing
Upper Lower
Bounds
CAM Review CCB
Future Performance Using TCPI,
IEAC & Adjusted Work Sequence
IEAC New BL
39. What Did We Learned?
CPI/SPI are necessary but not sufficient for success
program management.
All EV variables have probabilistic foundations.
The sunk cost of successful Earned Value is already
absorbed in a credible PMB and the process used
to build it
39
40. 40
The Light at the End of the Tunnel
Start with the Top Down approach and define the
needed capabilities to drive the requirements.
Use these capabilities and requirements to
establish the “business value,” and related Value
Stream Map of the Master Plan.
Partition the allocated work into Work Packages
that deliver the business value in a credible
sequence meaningful to the customer.
Use the Bottom Up approach to construct the
details.
Consider all variables as random variables.
Use the 32 Criteria as guidance for “business
processes,” not just EV.
Remember EV’s Unit of Measure of Dollars not
Time. Time ≠ Money on any real program.