The document provides guidance on establishing a credible performance measurement baseline (PMB) in 8 steps: 1) Build a work breakdown structure (WBS) 2) Define program events 3) Define significant accomplishments 4) Define accomplishment criteria 5) Develop work packages 6) Identify interdependencies between work packages 7) Assemble an integrated master schedule (IMS) 8) Iteratively tune the IMS considering risk, mitigation activities, and past performance. Following these 8 steps ensures the PMB includes the right work in the right order, work that can be measured against technical performance measures, sufficient resources, and risk retirement tasks embedded in the IMS.

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2. Eight
Easy Steps
To
Building a
Credible
Performance
Measurement
Baseline
Glen B. Alleman
Lewis and Fowler
www.lewisandfowler.com
galleman@lewisandfowler.com
Eight
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3. Today we will learn …
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4. AQuickReview…
The Performance Measurement Baseline (PMB) is a time-phased budget plan for
accomplishing work, against which contract performance is measured. It includes
the budgets assigned to scheduled control accounts and the applicable indirect
budgets. For future effort, not planned to the control account level, the PMB also
includes budgets assigned to higher level Contractor Work Breakdown Structure
(CWBS) elements, and to undistributed budgets. It does not include management
reserve.
— Earned Value Implementation Guide, October 2006
But if your PMB has:
§ The wrong work, performed in the wrong order,
§ Work that can’t measured against the Technical Performance Measures,
§ Insufficient resources to absorb the planned BCWS,
§ No measure of effectiveness (MOE) or measure of performance (MOP) of the
produced products against the planned outcomes, or
§ No risk retirement tasks embedded in the IMS…
… THE PMB IS NOT CREDIBLE
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6. WhatDoesCredibleMean?
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7. § Lack of predictive
variance analysis
§ Untimely and unrealistic
Latest Revised Estimates
(LRE)
§ Progress not monitored
in a regular and
consistent manner
§ Lack of vertical and
horizontal traceability of
cost and schedule data
for corrective action
§ Lack of internal
surveillance and controls
§ Managerial actions not
demonstrated using
Earned Value
§ Inattention to budgetary
responsibilities
§ Work authorizations that
are not always followed
§ Issues with Budget and
data reconciliation
§ Lack of an integrated
management system
§ Baseline fluctuations and
frequent replanning
§ Current period and
retroactive changes
§ Improper use of
management reserve
§ EV techniques that do
not reflect actual
performance
HowtheProgramTrainWreckStarts…
Mary K. Evans Picture Library
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8. Prod Tree
SOW
IPTs
IMP
IMS
BOEs
CWBS
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9. 1. Build the WBS
2. Defines Program Events
3. Define Significant
Accomplishments
4. Define Accomplishment
Criteria
5. Develop Work Packages
6. Identify
Interdependencies
between Work Packages
7. Assemble Integrated
Master Schedule
8. Iterative and Incremental Tuning of the IMS in the
presence of risk retirement, mitigation activities, and
past performance
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Boyd
developed the concept to explain how to direct one's energies to defeat an adversary and survive.

10. Continuous Risk
Management
Requirements
Contractor Work
Breakdown Structure
(CWBS)
CWBS Dictionary / SOW
Integrated Master Schedule
(IMS)
Earned Value Management
System
A Credible Performance
Measurement Baseline
Technical Performance
Measures (TPM)
Process Metrics
ü Specifications
ü Work Statements
ü Tailor and outline entire program and products
ü Provide a single numbering system for the program
ü State all deliverables and their components
ü Narrate these deliverables in meaningful ways
ü Follow IPT and CWBS structure
ü Describe of work traceable to the IMS elements
ü Provide an Event–driven Plan
roadmap of processes for program
ü Expand the IMP to an Event–driven
Schedule of Work Packages
ü Provide details and timing
ü Build risk mitigation activities
ü Connect measures of progress with
measures of increasing maturity
ü Connect System
Performance
with Continuous
Technical
Improvements
ü Connect Cost
Performance
with the IMS
Performance
ü Increase the Probability of Program
Success
Integrated Master Plan
(IMP)
Sources of a Credible Performance Measurement Baseline
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ü Define
Measures of
Performance
ü Define Measure
of Effectiveness

11. 11/34
Cost
Performance
Baseline
Schedule
Performance
Baseline
Technical
Performance
Baseline
Perform
Functional
Analysis
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

12. Let’s Build the Performance
Measurement Baseline Using The
Eight Steps
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13. This approach is called Product Development Kaizen and is used by Lean Six Sigma firms to ferret out
the system capabilities before any technical or operational requirements are defined.
Use this to reverse engineer or validate the WBS and connect WHAT with WHY before proceeding to
build the CWBS or confirm the WBS. 13/34

14. Program
Events
Statement of Work CWBS
Significant
Accomplishments
Accomplishment
Criteria
CDRLs and
Deliverables
Tasks Contained in
Work Packages
Measure the progress to plan using Physical % Complete at the Accomplishment Criteria (AC) and
CWBS level by making to the following connections
Defines
Aligned Aligned
AlignedAligned
Aligned
Completed SA’s are
entry criteria for
Program Events
Completed Work
Packages are exit criteria
for Tasks
Describes increasing product
maturity as 0/100 or EVMS SD
guidance
Documents the product
maturity that is aligned with
SOW and CWBS
Work necessary to mature
products grouped by
CWBS
Work structure
aligned to SOW
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15. Update Contractor
System Spec
Update Program
Development
Allocate Functional
Reqmts
Update Functional
System Design
Develop HWCI
Specifications
Develop SIL
Specifications
Build Astp1
F-18 IRR
SIL Baseline 1.0
Update SIL Test
Cases
Develop Prelim SIL
CSCI
Critical Component s
AstP 1,2
SSpS 1,2,3
1
2
3
4
6
7
5
8
10
9
11
13
14
15
Update AS Test
I&T on CVN
I&T on LHA
12
Contract Award + 15 days
Systems Requirements Review (SRR)
System Functional Review (SFR)
HW Preliminary Design Review (PDR)
System PDR
EDM 1.0 Baseline
EDM 2.0 Baseline
Mfg Docs Available
TBD
TRR 1.0
EDM 7-8 TRR
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§ Each collection point provides an
assessment of incremental
business or mission value.
§ Defining these points before the
project starts is the basis of
measuring progress to plan.
§ Because then you know what
done looks like before it arrives.

16. Deliverables
WBS
Tasks and Schedule
Business Need
Process Invoices for Top
Tier Suppliers
1st Level
Electronic Invoice
Submittal
1st Level
Routing to Payables
Department
2nd Level
Payables Account
Verification
2nd Level
Payment Scheduling
2nd Level
Material receipt
verification
2nd Level
“On hand” balance
Updates
Work
Package
(WP)
1 2
3
4
6
5 A
B
Deliverables defined in WP
Terminal Node in the WBS defines
the products or services that
produce the products of the
project
Terminal node of the WBS
defined by a Work Package.
Tasks within the Work
Package produce the
Deliverables
100% Completion of the deliverables is
the measure of performance for the
Work Package
Management of the Work
Package Tasks is the
responsibility of the WP
Manager.
A decomposition of the work
needed to fulfill the business
requirements
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17. 17/34
Maturity ActionProduct Product State
Adjective VerbNoun Verb
CompleteDesignModel/SimPreliminary

18. Program Events
Define the availability
of a Capability at a point in
time.
Accomplishments
Represent requirements
that enable Capabilities.
Criteria
Represent Work Packages that
fulfill Requirements.
Work
Package
Work
Package
Work
Package
Work
Package
Work
Package
Work
Package
Work
Package
Work
Package
§ The increasing maturing of a product or service is described through Events or
Milestones, Accomplishments, Criteria, and Work Packages.
§ The presence of these capabilities is measured by the Accomplishments and their
Criteria.
§ Accomplishments are the pre–conditions for the maturity assessment of the
product or service at each Event or Milestone.
§ Performance of the work activities, Work Packages, Criteria, Accomplishments, and
Events or Milestones is measured in units of “physical percent complete” by
connecting Earned Value with Technical Performance Measures.
Work
Package
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21. AC: 005
Task
Task
Task
Task
AC
AC:023
Task
Task
Task
Task
AC
§ The 100% completed work in AC:005 is needed to start the work in AC:023
§ In the IMP/IMS paradigm, there is no Task-to-Task connection across Accomplishment
Criteria (AC) boundaries, only within an AC
§ The AC-to-AC linking states “…all work in the predecessor AC must be complete before
starting the successor work, assuring the minimum of rework due to partially defined
requirements or partially completed products”
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22. PE: BPE: A
SA: 001
SA: 002
SA: 003
SA: 004
PE: A
Task
Task
Task
AC: 006
§ The best arrangement has the completion of Event A start the first task in Event B.
§ All work performed beyond the date of Event A is done at risk.
§ At PDR (Event A), approval to proceed Event B (CDR) is given
§ Only long lead items should cross Program Event boundaries
§ All other work terminates on the Program Event where a formal review of the planned
maturity is conducted – SRR, SFR, PDR, CDR, …
§ This topology assures a complete assessment of “progress to plan,” is available at each
Program Event
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SA: 008
PE: B

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24. Risk: CEV-037 - Loss of Critical Functions During Descent
Planned Risk Level Planned (Solid=Linked, Hollow =Unlinked, Filled=Complete)
RiskScore
24
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20
18
16
14
12
10
8
6
4
2
0
Conduct Force and Moment Wind
Develop analytical model to de
Conduct focus splinter review
Conduct Block 1 w ind tunnel te
Correlate the analytical model
Conduct w ind tunnel testing of
Conduct w ind tunnel testing of
Flight Application of Spacecra
CEV block 5 w ind tunnel testin
In-Flight development tests of
Damaged TPS flight test
31.Mar.05
5.Oct.05
3.Apr.06
3.Jul.06
15.Sep.06
1.Jun.07
1.Apr.08
1.Aug.08
1.Apr.09
1.Jan.10
16.Dec.10
1.Jul.11
Risk Response and
Risk ID in IMS
Milestone Date
traceable between RM
Tool and IMS
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27. Attribute Beneficial Outcome from this Attribute
Maturity Flows through
Program Events
§ Performance measurement is in units of increasing maturity
of the Technical Performance Measures
§ Each event is a mini authorization to proceed
Single outcome for each
work package (AC)
§ Measure Physical Percent Complete at the WP level
§ Use 0/100 for tasks for the vast majority of work
Technical Performance
Measures are explicitly
visible
§ Connect Cost, Schedule, and Technical Performance
§ EV does not provide a means of adjust for “off TPM,” but
make your own adjustments to the risk numbers for now
Risk retirement explicitly
visible
§ Risk retirement is embedded in the IMS
§ Risk mitigation means waiting until the risk happens
IMS flows vertically 1st and
horizontally 2nd
§ All work supports the assessment of maturity
§ Isolate tasks dependencies within a Work Package
No Event linkage except
for long lead items
§ 0/100 requires not partial completion
Decoupled dependences
improves risk
responsiveness
§ 1st round IMS defines a free flowing process
§ Maintaining this decoupling is key to a “dynamic” IMS that
can respond to the natural changes in the program
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29. Statistical thinking will one day be as necessary for efficient citizenship as the ability to
read and write. – H.G. Wells
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31. So Where’s The EV Discussion?
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§ With the PMB
established, the BCWS
baseline comes for free
§ The cost of executing
of the EV based PMB is
not free, but most of
the investment has
been made
§ Earning value from EV
comes from cost
avoidance and
increased utilization of
allocated funds.

32. So much for our strategy of winning
through technical dominance
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33. A Credible Performance Measurement Baseline
Assures Program Management has the needed performance information to deliver
on‒time, on‒budget, and on‒specification
Technical Performance Measures
Cost Schedule
Conventional Earned Value
+
=
§ Master Schedule used to
derive Basis of Estimate
(BOE) not the other way
around.
§ Probabilistic cost estimating
uses past performance and
cost risk modeling.
§ Labor, Materiel, and other
direct costs accounted for in
Work Packages
§ Risk adjustments for all
elements of cost.
Cost Baseline
§ Earned Value is diluted by
missing technical
performance.
§ Earned Value is diluted by
postponed features.
§ Earned Value is diluted by
non compliant quality.
§ All these dilutions require
adjustments to the Estimate
at Complete (EAC) and the
To Complete Performance
Index (TCPI).
Technical Performance
§ Requirements are
decomposed into physical
deliverables.
§ Deliverables are produced
through Work Packages.
§ Work Packages are assigned
to accountable manager.
§ Work Packages are
sequenced to form the
highest value stream with
the lowest technical and
programmatic risk.
Schedule Baseline
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