1. Establishing the Performance Measurement Baseline (PMB) The Performance Measurement Baseline is a time–phased schedule of all the work to be performed, the budgeted cost for this work, and the organizational elements that produce the deliverables from this work. Glen B. Alleman Vice President, Strategy and Performance Management Lewis & Fowler 8310 South Valley Highway Suite 300 Englewood, Colorado 80112 www.lewisandfowler.com [email_address]

2. The Processes Surrounding the Performance Measurement Baseline PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. Identify Needed Business Capabilities Establish a Performance Measurement Baseline Execute the Performance Measurement Baseline Capabilities Based Plan Business Value Stream Earned Value Performance Technical Performance Measures Business Value Stream Technical Requirements Establish a Requirements Baseline Technical Performance Measures PMB

4. The Six Steps to Build the Performance Measurement Baseline PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. Decompose the Project Scope into a product based Work Breakdown Structure and then into Work Packages which describe the production of all deliverables Decompose Scope Assign Responsibility for Work Packages to named owners who are accountable for the management of resource allocation and cost baseline, and technical performance Assign Responsibility Arrange the Work Packages in a well formed network with explicitly defined deliverables, milestones and internal and external dependencies Arrange Work Packages Develop Time–Phased Budget (BCWS) from labor spreads in each Work Package and balance these BCWS spreads across the Project. Develop BCWS Assign Objective Performance Measures for each Work Package and summarize these for the Project as a whole. Use the 0%/100% measurement of complete whenever possible. Assign Performance Measures Establish a Performance Measurement Baseline to be used forecasting Work Package and Project ongoing and completion metrics. Set Performance Baseline

7. Success Of The PMB Depends On Identifying Measureable Results PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. What gets measured gets done 1 If you don’t measure results, you can’t tell success from failure 2 If you can’t see success, you can’t reward it 3 If you can’t reward success, you’re probably rewarding failure 4 If you can demonstrate results, you can remain credible 7 If you can’t see success, you can’t learn from it 5 If you can’t see failure, you can’t correct it 6

8. Decompose The Scope Into A Proper “Tree” PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. Business Capability Process Invoices for Top Tier Suppliers 1 st Level Electronic Invoice Submittal 1 st Level Routing to Payables Department 2 nd Level Payables Account Verification 2nd Level Payment Scheduling 2 nd Level Material receipt verification 2nd Level “ On hand” balance Updates

10. What Does A Good Work Package “NOT” Look Like? PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. What NOT to do Instead Think About It’s NOT a laundry list of work to be done It’s a decomposition of the products, services, and data generated by those It’s NOT a functional decomposition That’s the role of the Organizational Breakdown Structure (OBS) It’s NOT a direct map of the requirements Requirements produce products and services, but are not one for one with the WBS It’s NOT a reflection of the underlying product or service partitioning This is done later in the program strategy It’s NOT the first structure you might think of… Build the WBS several times, assess its usefulness in describing the products and services

15. Connect The WBS To Work Packages And Then Define The Tasks To Produce The Deliverables PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. Deliverables WBS Tasks and Schedule Business Need Process Invoices for Top Tier Suppliers 1 st Level Electronic Invoice Submittal 1 st Level Routing to Payables Department 2 nd Level Payables Account Verification 2nd Level Payment Scheduling 2 nd Level Material receipt verification 2nd Level “ On hand” balance Updates Work Package 1 2 3 4 6 5 A B Deliverables defined in WP Terminal Node in the WBS defines the products or services of the project Terminal node of the WBS defined by a Work Package Tasks within the Work Package produce the Deliverables 100% Completion of deliverables is the measure of performance for the Work Package Management of the Work Package Tasks is the responsibility of the WP Manager. These are not held in the master plan A decomposition of the work needed to fulfill the business requirements

17. Decompose Business Capabilities Into Deliverables, Then Work Packages, Then Measurable Outcomes PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. Business Capabilities Capability Number 1 Capability Number 2 Deliverable Number 1.1 Deliverable Number 1.2 Deliverable Number 1.3 Deliverable Number 1.4 Work Package Number 1 Work Package Number 2 Work Package Number 3 50% Milestone 50% Milestone 100% Milestone 100% Milestone Deliverable Number 2.1 Work Package Number 4 100% Milestone Deliverable Number 2.1 Deliverable Number 2.1 Work Package Number 5 25% Milestone 75% Milestone Increasing Detail of the Planning Outcomes Increasing Value to the Customer

19. Step 2: Define The Effort, Duration, And Confidence Intervals PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc.

21. Use Word Or Excel, It Doesn’t Matter Just Capture The Contents In One Place PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. No matter what form is used, the function of the Work Package must communicate to the participants the baseline information described in the Table of Contents of the previous page.

27. Assign The Responsibilities And Make A Single Person Accountable PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc.

28. Arrange The Work Packages Into A “Well Formed” Network PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. 2 nd Level Payables Account Verification 2 nd Level Payment Scheduling 2 nd Level Material receipt verification 2 nd Level “ On hand” balance Updates

30. “ Arranging” the Work Packages Is Iterative And Incremental PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. In the example above, the Work Package Managers collectively come to an agreement on how the sequence of how the work will be performed. The result is a collective ownership of the outcome. This ownership comes from the collective development of the project plan. This process is a Product Development Kaizen (PDK)

31. Develop A Time–Phased Budget PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. 2 nd Level System Payables Account Verification 2 nd Level System Payment Scheduling 2 nd Level System Material receipt verification 2 nd Level System “ On hand” balance Updates Duration of the Work Package BCWS Duration of the Work Package BCWS Duration of the Work Package BCWS Duration of the Work Package BCWS

32. Balance All The Work Across The Project Before Setting The Baseline PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc.

37. Project Maturity Flow Is The Incremental Delivery Of Business Capabilities PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. Pilot Data Enrollment Integrators Quality Monitor Internal Router External Interfaces Finance Loss Data Store Lookup Data Warehouse Data Marts Data Marts Portals and others Billing Resale's Emulations Demo conversion process, member reconciliation Shared group matrix reports and interfaces Shared member crosswalk and members to ERP Integrators in ERP converted to inventory Status and trigger conversions Data in Marts for ERP Material Master Converted from legacy External Vendors converted to ERP TBD Vendors from legacy Material converted end–to–end

42. Wrap Up PMI College of Scheduling “ PMI” is a registered trade and service mark of the Project Management Institute, Inc. A good plan, violently executed now is better than a perfect plan executed next week – General George S. Patton