cse 7315 - sw project management / module 30 - managing with earned value / measurement issues...

CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement IssuesCopyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Slide 1

CSE7315M30August 13, 2006

SMU CSE 7315Planning and Managing a

Software Project

Module 30Managing with Earned Value /

Measurement Issues

Slide # 2August 13, 2006

CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value /

Measurement IssuesCopyright © 1995-2006, Dennis J. Frailey,

All Rights ReservedCSE7315M30

Objectives of This Module• To discuss how to manage a

project using earned value measures

• To discuss some measurement issues





Managing with Earned Value





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TotalPlanEarned$ Spent

BCWS(Budgeted Cost of Work

Scheduled)• The amount of effort you had

planned to expend (i.e., the amount you budgeted)

• “How much work should have been done”

BCWS





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BCWP(Budgeted Cost of Work

Performed)• The value produced for the effort

you have actually expended• What you have earned• “How much work was actually done”

BCWP





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ACWP(Actual Cost of Work Performed)

• The amount of money you have spent so far

• The “actual” cost• “What did your work cost?”

ACWP





What Can We Tell About the Schedule

From These Three Numbers?SV - Schedule Variance

SV = BCWP - BCWS

SPI - Schedule Performance IndexSPI = BCWP / BCWS

Negative means behind schedule

Less than 1 means behind schedule





SPI Indicates Whether You are Ahead of or Behind

Schedule

0.5

0.7

0.9

1.1

1.3

1.5

J F M A M J J A S O N D

SPI Target

Ahead of Schedule

Behind Schedule





What Can We Tell About the Cost

From These Three Numbers?CV - Cost Variance

CV = BCWP - ACWP

CPI - Cost Performance Index CPI = BCWP / ACWP

Negative means over budget

Less than 1 means over budget





CPI Indicates Whether You are Under or Over Budget

0.5

0.7

0.9

1.1

1.3

1.5


CPI Target

Under Budget

Over Budget





Variances on Graph

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Schedule VarianceCost

Variance





Three Useful NumbersBAC - Budget at Completion

– The total budget for the project– BCWS at project completion (BCWSBAC)

SCHED - Schedule for the project– The total number of weeks or months

or years planned for the projectEAC - Estimate at Completion

– Your estimate of actual project cost (ACWPEAC)





EAC - Your Estimate of theFinal Cost

• This is your estimate of the final project cost, based on your insight on the project.– Perhaps you know that

performance to date is higher or lower than is likely in the future

This is a judged value





Independently Estimated Cost At Completion

IEAC - Independent estimate of the project cost at completion– The projected cost of the project, based on

performance so farIEAC = BAC / CPI

– Note that this may be different from your estimate.

This value is based on facts





How Much Over or Under?

VAC - Variance at CompletionVAC = BAC - IEAC

orVAC = BAC - EAC

Negative means over budget by this much





Schedule At CompletionISAC - Independent Schedule at Completion

– The projected schedule of the projectISAC = SCHED / SPI

SVAC - Variance at CompletionSVAC = SCHED - ISAC

Negative means behind schedule by this much





Thus You Can Tell ...• How far behind or ahead of schedule

you are• How far over or under budget you are• What your eventual schedule and cost

are likely to be

You also have an early warning of trouble that you can use to try to

fix the underlying problems





A Handy Graph of SPI and CPIIndicates Your Overall Status

Behind Schedulebut Under Budget(shortage of staff )

Ahead of Scheduleand Under Budget

Behind Scheduleand Over Budget

Ahead of Schedulebut Over Budget(staff surplus?)

SPI

CPI





Reasons for Being Behind Schedule

• If you are also Under Budget– There is not enough work being done

• Not enough people• People being used for other tasks

• If you are at or Over Budget– There is a productivity problem

• Underestimation of the effort• Excessive “non-value-added” work





You Can Set Control Limits and Thresholds for Earned

Value• Just as you can for many other quantities

• Usually based on history from previous programs– Acceptable variation is established by

the behavior of programs that did not get into trouble

This is typically done by mature organizations with good historical data. At lower levels of

maturity, you lack the data to set useful limits.





Control Limits on SPI Chart

0.5

0.7

0.9

1.1

1.3

1.5


SPI Target

Upper Control Limit

Lower Control Limit





What Are Your Chances of Meeting Your Budget?

• If CPI or SPI is outside of the control limits, it means you are under or over performing to a degree that means corrective action is necessary

• But also look at trends - they can indicate potential problems in the future





What If the Budget Changes?• Sometimes projects adjust budgets

and goals – In light of clear evidence that previous

budgets & goals cannot be met– Or due to changes in goals or

requirements– Or due to changes in commitments– Or due to changes in resources– …

• How does this effect earned value?





Responding to Budget Changes

• You can continue to track against the original plan, but show new estimates on the same graphs

• You can “replan” – Re-compute BCWS and other values

affected by the change and compute earned value against the new plan

– This is recommended if the new budget is significantly different





What If You Are Asked to Recommend The Adjusted Budget?

• Suppose, in light of clear evidence that previous budgets & goals cannot be met, you are asked to estimate the likely cost and thus the recommended new budget?

• How do you know if the change is enough?

(next slide)





“To Complete”Performance Index

Let BAC be your original budget and EAC be your estimate of actual

costThen TCPI = (BAC-BCWP) / (EAC-ACWP)(work left to do / money left to spend)• This tells you how you must perform

in order to meet your estimate (EAC)





Using TCPI (To CompletePerformance Index)

TCPI = (BAC-BCWP) / (EAC-ACWP)• If TCPI is outside the control limits

(i.e., not very close to 1.0), it indicates that, if you continue to perform as you have in the past, you are unlikely to meet the EAC estimate– So you must change the goal – Or take other corrective action





EAC or IEAC?• You can compute TCPI using either

version of EAC.• IEAC assumes your past

performance on the project is a reliable guide – generally recommended after 15-20% complete

• EAC assumes you have information that is more reliable than past performance





SummaryEarned Value Can ...

… tell you your true status… give you an effective schedule /

budget outlook… help you understand the reasons

why if you are not meeting your plan

If the estimates are developed by the workers, they are more likely to “buy in” to

the results





Summary (continued)

• Various indices can be computed to tell you things about your project, such as:– Projected cost or schedule– Performance level required to meet a

specific goal (original budget or revised budget)

CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement IssuesCopyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Slide 31

CSE7315M30August 13, 2006

Measurement Issues





Measurement Issues• Frequency• Synchronization• Updating estimates• Margin• Peak vs. average• Units• Interplay of resources





FrequencyHow Often to Measure

• Too often results in high cost, disruption of process

• Too seldom results in failure to see problems soon enough

• Frequency should depend on degree of risk and cost of measurement

0102030

1/yr 1/month 1/week 1/day 1/hour

Eff ectivenessCost





SynchronizationGetting the True Picture

Delay due to System Load

020406080

100120

8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Hour





UpdateProjections and Estimates

0

5

10

15

20

25

30

1 2 3 4 5 6 7 8 9 10

ActualForecast





MarginA Frequently Misunderstood

TermWhat does “leave 50% margin” mean?

Code

Margin66 2/3

50

100

100

Code

Margin





Peak vs. Average“Software must be able to handle

100 screens per minute”

Peak? (Worst Case)

Average over Some Interval?

How Often to Measure?





UnitsOften Subject to Misinterpretation

• Memory Size: words, bytes, bits???• Program Execution Time:

– Hours since shipped? {was it delivered?}– Hours since received by customer? {was it installed?}– Hours since installed? {was it used?}– CPU execution time since installed?

• CPU Time: cycles, instructions, MIPS, FLOPS, ?

Beware of innocent misinterpretations





Interplay of ResourcesFew Things Happen in

IsolationSometimes, system resources interact with each other, giving misleading

evidence of performance

Memory

Capacity:80 cycles

per micro-second

CPU50 MIPS

I/O Channel20 MIPS

Display40 MIPS

CPU may run at only 20 MIPS because of

memory saturation





Summary of Measurement1) Know WHAT you are measuring - attributes,

etc.2) Know WHY you are measuring - goals, risks,

etc.3) Select wisely

– Complete - something for each part of the process

– Reasonable cost of collection– High information content– Minimal organizational disruption

4) Beware of incorrect interpretations5) Beware of misuse

“Nobody believes statistics anyway.”

Adams, The Dilbert Principle





END OFMODULE 30

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