Project Monitoring and Control with EVA and Burn Graphs

1
Project Monitoring and Control with EVA and Burn
Graphs

• Guy Davis
• Kendra Hamilton
• Ed Dantsiguer

2
Agenda

• Origins of EVA
• EVA Explained
• EVA Examples
• Shortcomings of EVA
• Agile side of EVA
• Burn Graphs
• Tools
• Discussion

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
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
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
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 (WBS)
• Creation of detailed plan (critical path plan)
• Includes all activities that have to be
  performed, their durations, costs and relative
  contributions to the overall deliverable

7
EVA Explained 2/3
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
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
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
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
Derived Metrics

• Schedule Variance (SV)
• SV BCWP BCWS
• Compares what is done with what was supposed to
  be done
• SV lt 0 ? project is behind schedule
• Cost Variance (CV)
• CV BCWP ACWP
• Compares actual project cost with budgeted
  project costs
• CV lt 0 ? project is over budget

13
Schedule/Cost Performance Index

• Schedule Performance Index (SPI)
• SPI BCWP/BCWS
• SPI lt 1 ? project is behind schedule
• Cost Performance Index (CPI)
• CPI BCWP/ACWP
• CPI lt 1 ? project is over budget
• Cost Schedule Index (CSI)
• CSI CPI SPI
• CSI lt 1 ? project is not tracking to plan
• The further away CSI is from 1, the less likely
  is successful project recovery

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
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
Recommended Performance Metric Values
Per the U.S. Marine Corps Acquisition Procedures
Handbook, June 1997
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
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
Crediting Earned Value Methods

• Milestone Events
• Weighted Milestone Gates
• Percentage Complete
• Fixed Formula
• Level of Effort
• Percentage Complete and Milestone Gates

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
EVA Example 2/2
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
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 projects progress

24
EVA Tools

• Excel
• Welcom Cobra http//www.welcom.com/
• Schedulemaker http//www.schedulemaker.com
• Planisware OPX2 http//www.planisware.com/
• RiskTrak http//www.risktrak.com/index.htm
• Winsight http//www.cs-solutions.com/
• Primavera Systems http//www.primavera.com/

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
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
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
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
Burn-Down Graphs

• Shows remaining estimated effort on item
• Usually in ideal engineering time (IET hours)
• Calculated for any level of task abstraction

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
Not always pretty...
32
Burn-up Graphs

• Shows progress on completion of item
• Usually displays percentage complete
• Just the inverse of a burn-down graph

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
Overview of Burn Graphs

• Drawbacks
• Metric choice is key
• Over-simplification?
• Hides dependencies
• Should be able to zoom to see levels
• Traditionalists will resist implementation?

• Benefits
• Easy to compile/track
• Feedback to the team and status to the customer
• Highlights
• Schedule slips
• Scope creep

35
Burn Graph Tools

• Open-source
• Outreach Project Tool (OPT)
• XPlanner
• Commercial
• Version One
• MS Excel

36
References

• Anderson, David J. Using Cumulative Flow
  Diagrams with FDD. Feature Driven Development.
  2003. http//www.featuredrivendevelopment.com/node
  /view/515
• 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
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?