The EVM Newsletter™ #64                                       January 2015
me2011

TopWelcome to 2015. I hope the year brings you all you hope for.

 

We continue on the highlights of the Integrated Program Management Workshop (IPMW) held last November. This time it's advice on how to create meaningful schedules for agile development.

 

Look for the College of Performance Measurement to soon release "A Compendium on The Application of Earned Value Management to Agile Development and The Application of Agile Development to Earned Value Management." More on the history of this document is in this Newsletter.

 

How does EVM and cash flow work together? It depends. Our article on this subject talks about several common practices.

 

Homer Simpson shares some advice on how to find common areas of interest when trying to get to know more about customers and contractors interests.

 

   

Like us on Facebook

View our profile on LinkedIn
       

Does your PM have their head in the sand? A common concern is that the PM (or customer) has assumed the ostrich position. Turns out maybe this is not so bad after all.

 

Charles Lindbergh provides us our quotable quote. Airline travel has become the safest form of mechanical transportation (accidents per seat-mile). Who would have thought that flying almost 600 mph, five miles above the earth, would be safer than all other means of mechanized travel?  Would you leave the surface of the earth if we flew planes the way we run most projects ?

 

Is agile development an excuse to avoid scheduling and EVM? Can agile development have a schedule? We share lessons learned and recommendations from 89 companies and 29 government agencies.

     

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  [email protected]  

 

 

Ray Stratton, PMP, EVP 

Editor

 

BLOCK1 

Scheduling Agile (or Agile Scheduling?)

 Often heard, "You can't schedule agile."

 

Well, yes you can. And if you can then you can apply EVM to agile. Sorry news to those who thought agile development meant they did not have to create a schedule or do EVM.

 

At last November's Integrated Program Management Workshop (IPMW) there was a practice symposium on scheduling agile projects. It was presented by the US Government Accountability Office. Karen Richey and Jennifer Leotta presented "GAO Scheduling Best Practices Applied to an Agile Setting". 

 

The framework for the presentation was the 220 page GAO Scheduling Best Practices (http://www.gao.gov/products/GAO-12-120G).  This Guide is near completion and has the input of 80 industry participants, 29 government agencies, and 4 trade groups or universities.

 

Doing agile development does not eliminate the need for schedules. The key difference is that with an agile development process the final completed scope is determined by the planned project end date (and budget). "We're out of time, we must be done." With a waterfall development approach all the planned scope is completed at some eventual project end date, whatever time it takes. "Let's keep working until everything is done." So agile defines when the product will be delivered while waterfall defines what will be delivered. In agile development re-prioritization of the currently unfinished scope makes sure that when time runs out what is completed and delivered is of most value (maximized).

 

Their presentation highlighted the contents of what will become an appendix in the Guide for use in agile development.  Key points from the GAO presentation included:

  • Schedule to the release level, not sprint level (tracking sprints is like tracking LOE, they just happen)
  • Use and track agile metrics (burn down charts, completed stories, etc.) to track progress (ed: these can be mapped to PV and EV)
  • Sprint team resources are constant and do not need to be assigned to specific activities
  • Duration of sprints is fixed
  • Releases with "must have" features make up the critical path

If you missed IPMW look for it in early November 2015. Can't wait that long? Plan to attend CPM's EVM World 2015 in New Orleans 27-29 May. ("Party on Garth.")

  

Block2EVM and Cash Flow

How do you use EVM? Does it have anything to do with cash flow?

 

I have been following a number of forums and non-profit organizations in their discussions of EVM. I find it interesting on how EVM is used. I maintain that, fundamentally, using EVM is about taking a {controlled} baselined project schedule and showing the schedule and the progress in the same economic units as the budget and the costs (dollars, Euros, staff-hours, etc.). That, to me, is the essence of EVM as discussed in the last EVM Newsletter.

 

The need for CAMs and Control Accounts is part of implementing EVM on larger projects. Not having CAMs and Control Accounts does not mean there is no EVM. A project that has four people busy for six months does not need CAMs, just a PM who understands EVM. (They should probably do weekly EVM though.)

 

ANSI 748 is a particular flavor of EVM used in US Government contracts and is likely the most demanding EVM process. Then there is PMI's Practice Standard on Earned Value Management - the most commonly used "standard" worldwide according to "Earned Value Management A Global and Cross-Industry Perspective on Current EVM Practice", by Lingguang Song, PhD. (ISBN: 978-1-935589-06-8, Pub: PMI). This research study was funded by the PMI College of Performance Management (now CPM) in 2010.

 

There are Australian and British standards too.

 

But what is done with the EVM data? In US Government contracts the monthly EVM reports are provided to the customer as metrics to monitor the project's cost and schedule performance. The focus is on variances from plan and the eventual outcomes; completion date and final cost. But invoicing and cash flow are often determined by "billing milestones" and acceptance of deliverable items. The costs recorded in EVM do not directly form the basis of payments (but should be reconcilable with the formal accounting system). However for "time and materials" contracts the ACWP might form the basis for invoicing, depending on how "estimated actuals" or accrual values are handled.

 

In EPC (engineering, procurement, construction) EVM might be used by the project internally just to monitor progress and cost or profit margins. EVM reports are not typically sent to the customer/owner. However, billing may be based on the percent of completion based upon EVM data. Here the ACWP (AC) is only of internal interest in fixed price contracts, but the invoiced amount is based upon EVM derived percent complete.

 

Regardless, EVM provides metrics about the health of projects and should provide data for active decision making. How EVM data ties into invoicing and cash flow is very project and industry specific.

 
 BLOCK5

Homer Simpson on Finding Common Ground


To help get along with customers, clients, and contractors it's useful to find some common interest outside of the project to build a more personal relationship.  According to an interview with Homer Simpson, held shortly before his "The Simpsons Movie" was released, "Try to find some common interests. My wife and I discovered that we have kids of the same age, so that gives us something to talk about during TV commercials." 


 

Find those common interests between you and your customer or contractor. It's nice not to have to talk "shop" all the time.

 

When I worked in the corporate world there was a lunch time rule. If we all went to lunch and someone brought up work - they bought everyone's lunch!

                                                                                                    
Quotable Quote
quill

"

We actually live, today, in our dreams of yesterday, and living in those dreams, we dream again.



 

 

 

   Charles Lindbergh

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.


 

^Back to top^
 

 

BLOCK4Tidbit #64, Being Like an Ostrich is Good!

Generally we think of ostriches as sticking their heads in the sand to avoid the obvious (dangers). People who exhibit "head in the sand" behaviors are not thought to be good project managers since they avoid facing the truths that their EVM data is telling them.

 

Guess what? Being like an ostrich might be a good characteristic! Here is something I learned during a tour at an ostrich farm while on vacation in Cura�ao. (Hey, it's a small, new, island nation.) It turns out that ostriches don't put their heads in the sand to ignore the obvious.

 

When an ostrich senses danger and cannot run away, it flops to the ground and remains still, with its head and neck flat on the ground in front of it. Because the head and neck are lightly colored, they blend in with the color of the soil. From a distance, it just looks like the ostrich has buried its head in the sand, because only the body is visible. (Courtesy San Diego Zoo).

 

So the ostrich is not ignoring the obvious, they are sensing their environment and making a management decision. EVM data can give you danger signals, just don't drop to the ground and give up. Use the data, take some action.  If you don't like the SPI and CPI values at the 20% complete point or later, do something. It will not get better itself.

    
 ^ Back to top ^
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
 

 

 ^ Back to top ^

 

Conferences and Events

WHAT: 54th Annual AACE Western Winter Workshop

WHEN: 5-8 Feb 2015

WHERE: Lake Tahoe, CA

WHAT:  Workshop includes two and a half days of capital management and technical presentations showcasing the very latest in project controls tools and techniques.

MORE INFO: http://www.cvent.com/d/v4qfmr

 

WHAT:  Project Governance and Controls Symposium 2015

WHEN:  6-7 May 2015

WHERE: UNSW Canberra at the Australian Defence Force Academy, Canberra

MORE INFO: http://www.pgcs.org.au/index.php.

 

WHAT:  EVM World 2015

WHEN:  27-29 May 2015

WHERE: New Orleans, LA

MORE INFO: http://evmworld.org/

   

 ^ Back to top ^

Block10

CPM to release Agile and EVM Anthology


Over the past several years I have led or presented topics on the application of EVM on agile development projects. This has brought me in touch with those who have been there and done it. At each of the two annual CPM EVM events the attendance at EVM and agile sessions was high and showed a demand for knowledge and application hints. So, in November 2013, I formed a group of experienced volunteer EVM and agile PR practitioners with the goal of creating a document of some kind to capture this knowledge. In the interest of getting these thoughts and ideas into the EVM community the idea of a cohesive document fell away and instead I simply took their contributions and made an anthology.

 

The contributors to this anthology are:

  • Luis C Contreras, AzTech International LLC (goAzTech.com)
  • Howard Zillman, Northrup Grumman
  • Eric Christoph, PMP, EVP, L-3 Communications STRATIS
  • Andrea Nibert. Leidos
  • Ron Terbush, Lockheed Martin IS&GS
  • Glen B. Alleman, Niwot Ridge, LLC.

 

This effort was begun at a CPM conference and at the time I was on their board. Therefore it seemed fitting that the document should be distributed by CPM in a manner determined by the current board.

 

According to the latest information I have from CPM the anthology will be available soon and highlighted in a special edition of their Measurable News.

 

So stay tuned, check their website, and if you are interested in this topic and you are not a member consider joining. Then you will be on their email list and will get the Measurable News when it is released.

 

 

 ^Back to top^