May 2010

The EVM Newsletter™
from Management Technologies
In This Issue
Quotes about PM Software
EVM and Agile at EVM World
The Problem with Detail Estimates
When TCPI says "Stop Work"
Remaining 2010 EVM Workshop Dates
Book Review, "Measuring Time"

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Quotable, Quotes 
There are a number of quotes about PMs using project management software. "Show me a PM in love with their PM software and I'll show you a dangerous PM." Or, "Giving someone a hammer does not make them a carpenter, and giving someone project management software does not make a PM."
Mark G. Grotefend ,CCC, and President of AACEI recently wrote "Never get to the position where (you) cannot tell the status of (your) project because (your) computer is down." Translation: You have to get out of the office and talk to people and look for evidence of accomplished tasks.
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2010 EVP Exam Dates
Listed below are the exam date, the deadline for discounted applications, and the final date for applications.  Exams are generally held nationwide (US). 
Exam: 6/26 (Georgia only)
Too late to apply
Too late to apply
Exam: 11/6
Early Discount: 8/23
Deadline: 9/6
Always check with AACEI for revised dates and application information

Registration is Underway for EVM World 2010
CPM's annual EVM World conference is in Naples, FL on June 2-4.  

Presenting How to Make EVM Work in Agile Development
On June 2 I'll be presenting "Making EVM Work in Agile
Software Development Projects" at EVM World. If you are there stop by!


EVP Exam Pass Rate
One of our EVPrep workshop attendees passed along the March 2010 EVP exam results as reported to him. Thirty-two people took the exam...
 ..................18 passed.
Congratulations to our new EVPs, truly a mark of distinction!
"The PMP {exam} was a walk in the park.", said another.

Updated corrections to the EVP Study Guide, editions 050210, 230510, and 131109
Users of Ray Stratton's Earned Value Professional (EVP) Study Guide should visit the "corrections" website for updates to editions 050210, 120519, and 131109. The website address is found on page 4 (131109) or page 5 (050210, 230510) of the introduction.

A New Book on EVM
Earned Value Management for Projects, by Alexandre Rodrigues, Gower Publishers Series on Project Management
ISBN Number 978-1-4094-0799-7for paperback copies and 978-1-4094-0800-0 for e-book copies

PMI Announces EVM Credential
Attendees at the PMI EMEA Congress heard PMI announce their intention to develop an EVM credential. Standby for more news in later months.

Book Review, Coming in a Future Newsletter
Budd and Budd book
A Practical Guide to Earned Value Project Management, Second Edition. Look for a review in a future EVM Newsletter.

PMI President & CEO
Announces Retirement
Greg Balestrero, in an E-mail to PMI Membership, announced his plans to retire January 2011.

Welcome to the May Newsletter. 
Just as I was wrapping up this issue I learned of Rita Mulcahy passing. She was the founder of RMC Project Management. She passed away on Saturday, May 15th 2010, from complications related to Inflammatory Breast Cancer (IBC). She was 50. Rita leaves behind her husband and two children, ages 7 and 5. I took Rita's PMP prep class from her in 2002. She was a dynamic speaker, a smart businesswoman, and a passionate advocate of PM's best principles. There is a significant percentage of today's 230K+ PMPs who can thank Rita for her help in becoming a PMP.
This issue includes a Tidbit on getting detailed cost estimates while avoiding the human nature to pad estimates excessively for uncertainties.
There is a discussion of TCPI. Is there a value of TCPI beyond which hope is futile? Should TCPI trigger a wholesale project replanning effort?
This month's issue includes the promised review of the book "Measuring Time".
NASA's PM Challenge has been added to our EVM conference list. Don't forget, EVM World is this June. Get registered.
There are some quotes about PM.
A new book is out on Earned Value Management.
And PMI makes an important statement about EVM at their EMEA Congress.
You can help make this newsletter interesting by contributing news about your activities in EVM, your company, product announcements, or your projects. Each month starts with a blank sheet, we don't make this stuff up! Send news to me at
Ray Stratton, PMP,EVP
EVM Tidbit #10
More detail planning or lower cost estimates, a balancing act
When estimating the cost of a project we usually start with a WBS of some depth. This WBS might be one our organization uses forscales similar types of projects or a WBS imposed by the customer or the RFP. This provides a framework for estimating costs that can be carried forward into the project planning after we get the contract and start detail planning.
Usually the first estimate we get from our estimating team is higher than we'd like, and deemed not competitive. So we challenge our team to revisit their estimates and looks for economies, errors, or overly conservative thinking. We get a new total estimate and it's higher than the last!
Frustrated, we want to get more insight into the estimating so we take the WBS down one or two more levels and ask our team to distribute the work to the new WBS and come back with a new estimate. We get a new total estimate and it's higher than the last!
The problem of course is that with each new pass our team discovers more uncertainty, not less, and has more thoughts about what could go wrong. Giving them a more detailed WBS just gave them more elements to estimate and more opportunities to pad the estimated for uncertainty.
So the dilemma is that as you ask people to look at their estimates at a lower level of detail they find more items to worry about. Is there a solution? Maybe yes. If the PM agrees to take on some of the uncertainty, which he or she does anyway, and provide for it. Then it can be removed from the individual low level estimates.
One way to reduce uncertainty is set certain rules and follow them. Every scheduled activity should have entrance criteria. These can include the requirement that all predecessor work be complete and correct. This reduces the "what if" in the minds of the people estimating their work. Completion criteria compliment entrance criteria and help reduce worry and uncertainty. But only if the PM enforces the criteria. Work that is started prematurely usually finishes behind schedule.
Another way to reduce padding is to identify risky efforts and plan rework as a separate task. This makes the estimate for the rework visible and not buried in the main effort.
Detail planning is good. Just expect that the estimate for the project will be higher if done at a detail level. The detailed estimate might be more accurate, or it might just be the sum of multiple padded estimates.
Next month: Calibrating estimator's risk tolerance.
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Should TCPI Trigger Replanning?

Common sense and experience shows that the TCPI grows rapidly for projects with poor cost performance to-date (CPI <1.0). As the project has less and less work remaining and time is getting shorter the relative efficiency needed to complete the project to the BAC or EAC becomes impossible to achieve. So while the CPI (cum) may remain around 0.8 or 0.9 for the life of the project, the TCPI grows continuously and rapidly. With this characteristic in mind is itchart, upward possible to just examine the TCPI in isolation? Lipke in his book Earned Schedule suggests that a project with a TCPI of 1.1 or greater is very likely irrecoverable in cost. With some calculus he shows how the rate of TCPI growth is almost exponential as the project moves on. So, look at the TCPI and decide if it's time to stop working and start replanning. (Doing both at the same time results in poor results for both efforts.
(Remember too, that any project replanning should come from your PM budget, not the budgets of the people trying to produce the deliverables. To make them use their budgets for replanning just adds scope to their work without any funds.)
WorkshopsEarned Value Experience™ (CAM workshop) and EVPrep™ Exam Prep Workshop Dates
Earned Value Experience (CAM) Workshop
You'll experience creating an earned value management baseline, determining earned value from project status, Classroomcalculating earned value management indices, and estimating final cost and completion date. This workshop is perfect for team leads, cost account managers, financial and schedule control staff, project and program managers, and chief project officers. 
Excel EzEVM™Templates may be retained by attendees to implement earned value management in their organization.
The Earned Value Experience (CAM) workshop will be conducted in:
  • Seattle WA Aug 10-11
  • San Jose CA Aug 17-18
  • Arlington VA Sept 14-15
  • Chicago IL Sept 21-22
View the Earned Value Experience (CAM) workshop outline and get the registration form.
EVPrep Exam Prep Workshop

The workshop covers all the topics likely covered in the exam and provides exam-like questions and workshop discussion about each question and the possible answers. This workshop also includes an EVM analysis question to help prepare you for the three page written essay in Part 4.
Registration closing on EVPrep in Reston, June 14-15. This session supports the exams in July and November.
The EVPrep™ workshop will be conducted in  
  • Reston VA June 14-15
  • Seattle WA Aug 12-13
  • San Jose, CA Aug 19-20
  • Arlington VA Sept 16-17
  • Chicago IL Sept 23-24
  • Reston VA Oct 27-28
 Do you have an EVP FAQ
Go to AACEI's website for the latest information about exam dates.
View the EVPrep workshop outline and get the registration form.
Interested in an on-site workshop? Send an e-mail with your your address and the number of attendees to receive a quote.
Upcoming EVM and PM Conferences 
EVMWorld 2010 (Registration Underway Now)
WHO:PMI College of Performance Management
WHEN:June 2-4
WHERE: Naples, FL, USA
24th IPMA World Congress
WHEN: 1 -3 November 2010
WHERE:Istanbul, Turkey 
EVA Europe 2010
WHEN:Nov 24-25
WHERE: Belgium
NASA PM Challenge
NASA PM LogoWHEN: Feb 9-10
WHERE: Long Beach CA

EVM Jobs 
Do you have needs for EVM personnel? Send an email describing the position and location in 25 words or less and a link to a more complete description of the position. Your announcement will be read by up to 1,900 EVM personnel.
Book Review "Measuring Time"
Book Review. "Measuring Time, Improving Project Performancebook Using Earned Value Management", Mario Vanhoucke. Volume 136 in the International Series in Operations Research and Management Science, Springer Press, ISBN 978-1-4419-1013-4, 155 pages, hardcover.
Within the last ten years three emerging concepts for the use of EVM data in estimating project duration (and thus project's estimated completion date) were proposed: Planned Value method, Earned Duration, and Earned Schedule. Mario Vanhoucke, in concert with Stephan Vandevoorde and others, performed academic research on these concepts using complex project modeling and Monte Carlo methods. This book is a summary of the research effort.
The book is not a text book on EVM. It is a thorough discussion about their research methods and analysis of their results. This book provides the reader insight into how the research was conducted, but also when each of the three competing project duration algorithms appears to work best. It also provides a useful concepts for others considering research in the analysis of project performance using numerous and complex models of project activity networks.
We know from experience that while BCWP helps shows progress, it's not sensitive to the critical path and which work has been completed. One can have lots of BCWP from doing the work and the wrong time. The book also researches the "P-factor" index. This index (0-1.0), also called "Schedule Adherence", illustrates how much of the cumulative BCWP (EV) earned to date is per the project network compared to the total BCWP.
Most EVM research has used limited sets of real world project data or project models. The outcomes of such research was always influenced by the projects' characteristics such a size, type, industry, complexity, etc. One might also suspect that the project chosen for the research were subconsciously selected to favor the research. This often made the results of such research "not applicable on my projects."
The author also begins with the application of the three methods to three real projects. But what makes Vanhoucke's research unique is his use of computer generated networks. Using four parameters he is able to model the topography of various activity networks. He then assigns planned durations and a probability distribution to each of the activities. Using Monte Carlo methods each activity and project network is executed and EVM data collected after each project reporting interval. These data form the basis of his research into each of the methods.
His conclusion is that Earned Schedule outperforms the other methods for most projects when schedule performance is accurately reported throughout the project duration. The use of P-factor to create a more accurate "effective" BCWP does not appear to improve duration prediction over use of traditional BCWP.
This book also discusses research on how one individual activity might influence the project's outcome and the value of top down versus bottom up project tracking.
This book is not required for an understanding of Planned Value, Earned Duration, and Earned Schedule estimating methods. But if the goal is understand the merits of each method, P-factor, and "effective" earned value, then this book is worth reading.
Do you have news to share? Send your news item and we'll review it for posting in a future EVM Newsletter.
Ray Stratton
Management Technologies

The EVM Newsletter, EVPrep, The Earned Value Management Maturity Model, EVM3, EzEVM, and The Earned Value Experience are trademarks of Management Technologies. The Earned Value Professional and EVP are trademarks of the Association for the Advancement of Cost Engineering, International. (AACEiŪ)