June 2010

The EVM Newsletter™
from Management Technologies
In This Issue
Nearly 400 Attend EVM World
Award for Good E-mail Policies
Renewal Coming in August
Normalizing Estimator's Risk Tolerance
Program Those EVP Calculators!!
IRS is After S-Corporations

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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

EVM World Conference Attracts EVM-ers Worldwide
PMI's College of Performance Management (CPM) just held their annual Spring EVM conference, "EVM World 2010". Almost 400 attendees listened to 24 practice symposia on EVM topics, attended over thirty training sessions, learned about new commercial tools in tools tracks, and participated in six workshops.
Were you there?
Next year EVM World 2011 will be 18-20 May in Naples, Fl.
Put the idea of attending in your 2011 plans - and you bosses too!

Presenting How to Make EVM Work in Agile Development
On June 2 I was to present the above presentation at EVM World. Unfortunately I was unable to attend due to a death in my extended family.
If you came to the room to hear the talk, sorry to disappoint you. I hope you found another interesting topic to attend.

Management Technologies Receives a 2009 Constant Contact All-Star Award
Management Technologies received a 2009 All-Star Award from Constant Contact®, Inc., for meeting Constant Contact's best-practice standards for the use of Email Marketing throughout 2009. 
"Our customers work hard to build strong relationships with their customers through email marketing and some, such as Management Technologies , truly excel in this effort," said Gail Goodman, CEO, Constant Contact. "We created our All-Star Awards to highlight those customers who are passionately committed to following our best practices as they work to improve their customer communications.

Annual Newsletter Subscription Update
Coming in August
In August it will be one year since The EVM Newsletter was initiated. Our readers are approaching 2,000 readers! Well, actually subscribers. Which brings me to the point. 
We want to make sure we're not cluttering INBOXs with mail that is no longer wanted. 
In August you will receive an e-mail asking you to confirm your continued interest in receiving The EVM Newsletter. All you'll need to do is click on a link.
Those who do not confirm their interest will be dropped from our list of subscribers.

EVP is a Hot Topic in Utah and New Mexico
EVPrep on-site workshops have just been held in UT and NM for project teams involved in building large (really huge) scale processing facilities.
Over 40 EVP candidates took the two-day EVPrep workshop to get ready for their EVP exam day.
One of these organizations is doing EVM just because it makes good business sense, not because of a customer requirement. Good for them.

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.

Welcome to the June Newsletter. 
Did you make it to EVM World in Naples, FL?  I hope so. It is one of the major EVM conferences held annually. There are some details about this past event in the column on the left.  I planned to speak there, and meet some of you, but could not make it at the last minute.
EVM Tidbit #11 shares my ideas on how you can normalize your estimator's risk tolerance. We all have various levels of risk tolerance. But when we give our stakeholders our cost and schedule estimates, we should be able to state that this estimate has a 80% (or other value) chance of an underrun. Hopefully, they will understand that this means a 20% chance of an overrun. They should let you know if they are uncomfortable with that probability. (Hint: No one can afford a 99% chance of underrun.)
AACEI has changed the protocol and sequence of the EVP exam. More in the article below.
There is the usual update on our public workshops and EVM conferences.
I know running an project is a gamble, but if, after you worked all day, you still want to gamble, there is an EVM job opening near Reno, NV.
A lot of our EVM consultants and trainers operate as a USA IRS S- Corporation. The US House of Representative's have an idea how to get more tax dollars from these business entities. LLC and LLP are not immune either. More below.
Most important, we are revalidating our EVM Newsletter e-mail list in August. This helps make sure people who no longer want The EVM Newsletter can opt out, those who want it can reaffirm their opt-in.  Look for an e-mail on this subject in August. Management Technologies got an award from our e-mail distributor for adhering to best e-mail practices! We'd like to keep it up.
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 evinfo@mgmt-technologies.com
Ray Stratton, PMP,EVP
EVM Tidbit #11
Normalizing estimator's risk tolerance.
When we need cost or schedule estimates we should turn to thedice experts who will do the work. They've "been there -  done that". So their estimates should have high credibility. How they estimate their effort might be parametric, historic, or bottom-up estimates. Regardless of the method people want to succeed. So our estimators "adjust" for their personal risk tolerance. They strive to be sure that whatever the estimate is, there is some room for bad things to happen and still meet their stakeholders expectations. 
Regardless of the estimating method, and the use of  PERT or three point averaging, when all is done there is just one final estimate. A single number that we hope is close to the final result when the project is complete. A single number for each detail estimate, and a single number for the whole project.
But with every number is a probability associated with the likelihood of a overrun (cost or schedule). There is a probably of an underrun as well. So someone with an 80% confidence in their estimate is stating that "I believe that 80% of the time the final cost {or schedule} for this work will be equal or LESS than my estimate."
Each person's estimate reflects their own risk tolerance. Of course the PM and the organization also have their personal risk tolerance. The customer may also be involved if the effort will be a cost reimbursable effort.
How to bring all this into alignment? When I ask for estimates I also ask for the confidence factor as a percent probability. Regardless of the estimating method there is one number and this number reflects the estimator's risk tolerance and confidence in their estimate. Then I set a project-wide confidence factor based upon the project type, the organization's risk tolerance (likely my boss's), and the customer's if appropriate. It might be 50%, 70%, 80%, or higher. Of course, the higher the confidence factor the higher the estimate to cover more risk and uncertainty.
Then I ask the estimators to re-estimate their work to this defined confidence factor.  I know from the first estimate which estimates should go up and which should go down as each estimator revises their estimate to the new risk tolerance.
Now I can state to my boss, the organization, or the customer that the overall cost or schedule estimate has a probability of underun (or overrun) of a stated percent. If they are uncomfortable with the probability I can always ask for a more conservative  (higher) estimate from my team.
Back to top
Changes in the EVP Exam Protocol
AACEI had made some significant changes to the conduct and organization of their EVP exam. 
AACEI has moved the challenging memo portion of the exam fromhoop Part IV to Part II, thus placing it as the second exam event of the morning, just before lunch. Examinees said their brains were too fried by late afternoon to tackle the memo and do well.
Also, AACEI now allows programmable and/or financial calculators in the exam room. However cell phones remain outside the room.
An article in the June issue of Cost Engineering, AACEI's monthly member publication, went to press before these changes were made. It incorrectly states the old policy regarding only non-programmable calculators.
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, control 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 II (was part IV).
The EVPrep™ workshop will be conducted in  
  • 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 
24th IPMA World Congress
WHEN: November 1-3 2010
WHERE:Istanbul, Turkey 
MORE INFO: http://www.ipma2010.com/congress.php 
EVA Europe 2010
WHEN:November 24-25, 2010
WHERE: Belgium
NASA PM Challenge
NASA PM LogoWHEN: February 9-10, 2011
WHERE: Long Beach CA

EVM World 2011
WHEN: May 18-20, 2011
WHERE: Naples, FL
EVM Jobs 
"Sierra Nevada Corporation's Communication Navigation Surveillance / Air Traffic Management  business unit in Sparks, Nevada is continuing to grow in support of its customers and needs your help in this effort.    
"We are looking for applicants for Business Manager.
If you meet these qualifications and are interested in joining our unique team and being part of this growing effort, please apply as indicated. 
"You will manage your team, currently consisting of two Program Analysts, to support the four Product Line and twelve Program Managers in the management of their programs using Earned Value Management as a base reporting methodology.   
"You will work directly for the CNS/ATM VP of Programs using the corporate tools and processes to ensure accurate and timely financial reporting of all direct and indirect programs, forecasts and budgets on a monthly basis."  
Talent Acquisition Specialist III
Sierra Nevada Corporation
Bad News for Small USA S-corporations
There are many US based S-corporations within the EVM community.  If you are one of these and have three or fewerUnclesam employees here is some US tax news you probably did not want to know.
There is proposed federal legislation referred to as "American Jobs and Closing Tax Loopholes Act of 2010" (H.R.4213). This proposed legislation is expected to be passed before the end of this month. Under the proposed law the IRS would "disallow" S-corps that provide services using 3 or fewer employees. All income reported on these S-Corps will instead be reported on individual tax returns. This will cause these funds to be subject to Medicare and Social Security Taxes, which they are not as a S-corporation. The bill would also prohibit individuals that are engaged in professional service businesses avoid employment taxes by routing their earnings through a limited liability corporation or a limited partnership. 
So, while you might earn value from your earned value consulting and training, the Internal Revenue Service wants some of your earned value too!
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. (AACEi®)