Earned Value Management - turning on the headlights Earned Value - Why do I need it? To paraphrase the words of the Project Management Institute’s standard, when I rely only on a project schedule of tasks, finish dates, and % complete, I will not know where the project is or where it is going. I will simply know where the project was supposed to be and where it is supposed to be going. What is Earned Value? Earned Value Management (EVM) is a technique that looks at the relationship between a) actual cost expended, and b) actual work completed, and compares this to c) original budget and work timeline. More formally, the three data points you must understand and memorize are: a) Actual Cost (AC) – What amount of resources have been expended to complete the work at a given point in time. b) Earned Value (EV) – Snapshot of work completed at a given point in time. c) Planned Value (PV) – The Baseline – How far along the project work is supposed to be at any given point in the project schedule. How do I implement Earned Value? (My cheat sheet below) Step 1 (Planning) Create a Work Breakdown Structure. Ensure all tasks on the schedule are assigned. Estimate time to complete each task. Determine how you will determine that tasks are complete as the project progresses. Step 2 Periodic monitoring Obtain cost and / or hours expended. Obtain status on task completion. Forecast Cost and Schedule performance. My usual workflow is to enter the planned and actual data into MS Project and then export the time-scaled data to an excel chart. An excel chart (example below) isn’t required, but I highly recommend it as a support to your table of data – a picture is worth a thousand words. Combine the data into actionable forecasts By using Earned Value techniques, you use Project Management discipline to provide key feedback and forecasting to the project team and executives. See four sample questions and formulae below. Limitation Earned Value is not sensitive to the quality of the deliverables. You can be near the end of the project and forecast on budget and on schedule even if the deliverables are poor and the customer will not accept the final product. The expectation is that the PM is using other tools and techniques to manage and control quality. Stephen Wise http://www.IntegrationProfessionals.com/ http://www.IntegrationProfessionals.com/Twitter June 30, 2009 By Administrator Account Methodology, Project Management Ideas, Tools ac, baseline, earned value, ev, project management, pv, schedule, wbs 0 Comment Read More >>
Six things I must do to bring value Part 1 of 2. Six things I must do to bring value. Part 1 of 2. Even in tight times, when the number of resumes floating around has risen dramatically, many Project Management Office (PMO) leads are still saying there is a shortage of talent. “Get me a good Project Manager”, they say to the headhunters. I take it for granted that good managers are great leaders and excellent communicators. What are the differentiators that make a good manager a good Project Manager (PM)? I believe there are six things a PM must do during the planning and execution of a project in order to bring value as a Project Manager: Create a Work Break Down Structure. Determine which tools, methodology, and documentation will be used on the project. Facilitate the creation of an appropriate schedule and save the baseline. Use Earned Value to track schedule and budget progress against plan. Hold regular status meetings. Escalate unresolved issues and significant change requests to a management team. 1. Create a Work Break Down Structure. The 100% rule is the key. The rule is, ‘At any level of the Work Breakdown Structure (WBS), the entire scope of the project and all deliverables is captured 100%.’ To create the WBS, I engage potential participants using pre-mails and then hold a group session with a large white board, all stakeholders represented, and lots of post-it notes. I like to stop at only three or four levels deep into the WBS – but this is really the call of the team members who are doing the work. After the meeting, MS Visio Organization-Chart helps to quickly show the WBS graphically on one page. This page gets tweaked as necessary and is dragged to every meeting I attend. I use this tool to manage scope creep, engage stakeholders, accept deliverables, and avoid gaps in accountability. It’s the one Project Management tool I can’t live without – it becomes the entire project on one page. 2. Determine which tools, methodology, and documentation will be used on the project. Every new project is mashup of culture and organizational objectives. A good PM uses diplomacy and leadership to follow the norms that have been set and break the rules when the situation calls for it. Usually it’s not up to the PM to determine, between PRINCE2, PMBOK, Agile, SDLC, and CMMI. Whatever the methodologies employed it is the PM’s responsibility to ensure the approach is communicated to the team and guidance on how to implement it appropriately is available. My goal is that issues related to the tools, methodology, and documentation float to the background as the team presses ahead with work at hand. 3. Facilitate the creation of an appropriate schedule and save the baseline. A good PM will facilitate team creation of a schedule that documents a) activities that must be completed, and; b) name of the one person responsible for providing status updates. My rule of thumb is that an identified task that takes longer than 2 weeks should be broken down into smaller pieces and a task that takes less than 2 days is too detailed – but this is the team member’s call as they own the schedule, not the PM. When the team agrees that the schedule drawn up is doable, save a copy, this is the (first) baseline. May 27, 2009 By Administrator Account Project Management Ideas, Uncategorized baseline, change request, earned value, issues, methodology, project manager, schedule, tools, value, wbs 0 Comment Read More >>