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The EVM Newsletter™ #60                                       September 2014
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TopIssue #60? Wow, that's five years of The EVM Newsletter and five years of EVM Tidbits.

 

This is the September EVM Newsletter, barely. It almost became the October EVM Newsletter!

 

This issue reminds us of the different views engineers and project managers have when getting status on work underway.

 

 

   

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There is news about the Agile and EVM track at the upcoming IPM/IPMC/IPMW in Bethesda MD November 3-5. Hope to see you there. (The IPMC  conference appears to be going though a name change.) I'll be presenting a summary of the EVM + Agile Anthology that a team of EVM and Agile experts have been working on since last year's IPMC.

 

We have an example of potential confusion in a RFP's requirements for variance analysis. I'm not sure the answer is clear, but if you see something like this ask the buyer/agency to clear up any potential confusion.

 

Last month we started a contest for the most concise definition of EVM. We got some submissions but it was clear that, well, we were not clear on the goal. So it's been restated and the end date of the contest pushed out. You can win a copy of our EVP Study Guide ($65).

 

Are you going nuts trying to get your actuals (ACWP/AC) to match your accounting system actuals? Why? Maybe they should not if your EVMS is running as it should. See Tidbit #60.

 

By the way, full URLs are always shown along with links. Some subscribers are prevented from clicking on links so they have the full URL to paste into their browsers. 

  

You can help make the EVM 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  RayStratton@mgmt-technologies.com  

 

 

Ray Stratton, PMP, EVP 

Editor

 

BLOCK1 

Follow UP..EVM Software Vendors, Listen Up!

 In last month's EVM Newsletter  I passed along a suggestion that EVMS software vendors provide a means to implement apportioned effort via a link from one control account to more than one other control account. In other words, apportioned effort may be based on the performance of more than one control account and a means should be available to do so.

 

This suggestion generated some emails from our readers.

 

One comment concerned ACWP (AC). ACWP was not mentioned in the article but the question was how the AC would be spread among the related control accounts? Each control account should be budgeted for the amount of support expected to be needed and recorded in an account for each control account.  In other words, no different than any other control account. I would expect costs to be recorded following ANSI 748 and cost accounting standards. That means it's not related to the PV or EV.  Apportioned effort, as mentioned in the article, simply provides a way to achieve an EV that is not LOE based for tasks which are related discrete tasks.

 

LOE or apportioned effort accounts generally should not have their budget spread equally over their performance period and I would not expect ACWP to be equal month to month either. PV for LOE or apportioned effort efforts should anticipate AC so as to minimize cost variances when EV is recorded (using LOE or apportioned effort methods.)

 

Stephen Juterbock wrote and told how one might link more than one control account to perform apportioned effort. He said, " On the DoD side, I have four IBRs in the past 1 1/2 years and have been recommending to our contractors that they try something like this.  They all agree that it is a good idea, but no one has actually implemented it." His suggestion is for Cobra users, but might work for other EVMS tools too. Here is his recommendation.

 

"The analyst should find an existing Cobra code (OBS, control account) or add an identifying "C" code that they filter on to identify the discrete work packages they are supporting. They can input the status on the discrete work packages and then run an EVWORKS report (or any other applicable control account report) that is filtered on the identified code.  The filtered report would give you the current and cumulative BCWS/BCWP/ACWP for the work packages the analyst identified.  From there, they just calculate the cumulative % complete and enter it into the support package.  This method lets you pick and choose what work you want to identify as being supported.  This would require that EV be run at least twice on Cobra.  Once to obtain the original values, and again after the % complete is entered into the support packages.  It should be pretty quick and Cobra doesn't have any problem with multiple calculations so long as the control account calendar is not changed."

 

Contact Steve for more info or to share ideas.

 

 BLOCK5When Will This Be Done?

Asking an engineer when a problem will be solved is like asking someone when they will finish a jigsaw puzzle. You can estimate when, but you can't know when. 

 

This was actually heard on a joint customer/contractor weekly telcon:

 

Customer PM: "So when will you be done with this action item?"

Engineer: "Well first we have to do "a" and then "b" and if ......"

PM: "So when you be done?"

Engineer: "If we do 'a' then xxx might happen or yyy might happen and then...."

PM; "So what date should this be completed?"

Engineer, "I don't know, we'll get back to you?'

PM: "When?"

 

 


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BLOCK2

The Essence of EVM Contest Continues

 

Last month we announced a contest for the most concise statement describing the essence of EVM, EVM at the subatomic scale. We have received some candidate statements. What we learned from the submissions so far is that the desired goal was not well understood. So we will restate the goal to help define it.  

 

Think of distilling EVM down to its most basic element(s).

 

The goal is not about how to sell EVM or what it does. The goal is the answer to the question, "How is EVM different from other project performance methods." If you have already emailed your entry you can send in a new one. The last one received will be used. The winner gets a free copy of our EVP Study Guide (worth $65). The contest period is extended to  15 November.


 
Send your entry in an email to contest entry

   

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Quotable Quote
quill

"The most fundamental problem of politics is not the control of wickedness but the limitation of righteousness" 

 

"Henry Kissenger 

 

BLOCK4Tidbit #60, Why not Just Reconcile?

 

Within the EVM community we have come to expect variances. No project is planned perfectly nor executes perfectly.  We expect variances. We get suspicious when CPI and SPI are 1.0. An SPI of one may mean all work is LOE. A CPI of one says our budgeting and expenses are 100% correct. No one is that good.

 

But when a recent client told me they had spent significant time and effort to get the ACWP to equal the project's costs in the corporate finance system I got to thinking. There is usually a variance but should there be a variance?  ANSI 748 says that "The actual cost of work performed in the earned value management system is {should be} reconcilable with the actual costs in the accounting system." 


 

There may be differences between the two, but they have be explainable (reconcilable). ANSI also says "The EVMS will use actual cost data from the organization's accounting system as appropriate-including estimates for the costs of work accomplished that do not have actual costs recorded in the accounting system-..." 


 
Reconcile: "to bring into agreement or harmony; make compatible or consistent."

 

Typically projects have lagging costs in their accounting system. For example, if contract labor is used then the project may not see the cost of their efforts for months. Invoices have to be received, processed through accounts payable, payments made, and finally the corporate finance systems shows the payment amounts in the project account. But the progress the contract labor completed is shown in the month it was done as BCWP (EV). To create our EVM data at the control account we need a value of ACWP (AC). We have to estimate this for the contract labor; we have not even seen the invoice yet!

 

The same situation likely occurs when subcontractors deliver subassemblies. We might claim BCWP when the material arrives (although better to do so when it is consumed), but we might not find the payments in our project financials until months later.

 

So should we expect the EVMS ACWP equal to the project costs as reported in the financial system? Probably not. In fact, I would be suspicious if they are equal, with no variances between the two values. Like all EVM data, some variances are good - a sign of a properly running EVMS.

 

   

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Management Technologies Products & Services 
EVPrep and EVM Workshops

EVPrep Exam Prep Workshop

 

The workshop covers all the topics likely covered in the exam and provides exam-like questions 

EVP Pin

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).

  

"Ray, your course is excellent preparation for the EVP Certification test. Your questions were comprehensive like the test and somewhat harder (more complex) than the real test. Your preparation course especially helped with the memo."

Jeff Kottmyer

NASA

  

Do you have an  EVP FAQ?  

(Link :http://www.mgmt-technologies.com/EVP%20FAQ.html)

 

Does our EVPrep workshop and/or EVP Study Guide really help with the EVP exam?

(Link: http://www.mgmt-technologies.com/earned%20value%20management%20EVP%20Study%20Guide.html)

  

Using these data and data from AACE regarding yearly totals of EVP exams taken and exams passed we did some statistical analysis.

 

Yes, our EVPrep products are effective in increasing the likelihood of passing the EVP exam.

  

Earned Value Experience (CAM) Workshop

Classroom

 

You'll experience creating an earned value management baseline, determining earned value from project status,calculating 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.


 

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Where Can I Find More Tidbits?

 

Where can you go to find old EVM Newsletter Tidbits?

map

 

Since August of 2009 each EVM Newsletter has included a tidbit to help make EVM work better, be less costly, or more accurate, or timelier. 

  

All the Tidbits are available via a link  that lists each topic or theme. The link is on all our web pages as well. 

   

 


http://www.mgmt-technologies.com/The%20EVM%20Newsletter%20tidbits%20archive.html
 

 

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Conferences and Events

 

9th ICEC World Congress

WHEN: 20-22 October 2014

WHERE: Milano Italy

MORE INFO: TBD

  

PMI Global Congress 2014 - North America

WHEN: 26-28 October 2014

WHERE: Phoenix, Arizona, USA
MORE INFO: www.pmi.org

Integrated Program Management Conference (IPMC)
WHEN: 3-5 November 2014
WHERE: Bethesda MD
MORE INFO: http://ipmconference.org/

2014 Southern California AACE Fall Symposium

WHEN: 7-9 November 2014

WHERE: San Diego Hilton Bayfront, USA

MORE INFO: www.aace-scs.com

 

AACE International Conference

WHEN: 12-13 November 2014 (Yes 2014)

WHERE: Bangkok Thailand

MORE INFO: AACE


PMO Symposium

WHEN:16-19 November 2014

WHERE: Miami, Florida, USA

MORE INFO:  TBD

 

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Block10
EVM and Agile Presentation

As in the past two years the topic of EVM and Agile development will be a track at the Integrated Program Management Conference/Workshop in Bethesda MD. agile

 

A year ago I formed a volunteer group to produce a body of knowledge on applying EVM to Agile development and Agile Development to EVM. The group has worked hard and at this conference I will be presenting a Practice Symposium on the key content of our 45+ page document. Please plan to attend the IPMC and stop by if this subject interests you. See you Monday November 3rd at 2:30.


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BLOCK9

An IPMR Puzzle

 

The following appeared in a draft RFP containing a requirement for delivery of IPMR (Integrated Program Management Report). 

Question Mark

 

"Variance analysis is required for the following variances in Format 1: (a) top five current period cost and schedule variances; (b) top five cumulative cost and schedule variances; (c) top five variances at completion; and (d) other significant variances that are causing or are likely to cause significant cost or schedule overruns (contractor determined). The variance analysis thresholds are: (a) $50K and 10% for current period cost or schedule variances; (b) $100K and 10% for cumulative cost or schedule variances; (c) $250K and 5% for at-complete variances."

 

So when are variances required? Is it the top five (largest by dollar value, percent?), or 10% variance, or the top five exceeding 10%, or?

 

 

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Copyright 2014, Management Technologies 

 

The EVM Newsletter, EVPrep, The Earned Value Management Maturity Model, EVM3, EzEVM, 
The CAM^Exam, and The Earned Value Experience are trademarks of Management Technologies.

 

The Earned Value Professional, EVP, and the AEP logo
 are marks of the Association for the Advancement of Cost Engineering, International. (AACEŽ).

 

 

EVM World is a 
registered trademark of the College of Performance Management, Inc.

 

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