deltek insight 2010: earned value management is a “system of systems”

EPM-209 Earned Value Management is a “System of Systems”

Delivered by:

Kelly Meassick, PMP,Charter Performance Management Group

Copyright © 2010 Deltek, Inc. 2

Agenda

• Overview of Earned Value Management

• Processes: Project Management Using Earned Value

• Technology: Tools and Interfaces

• People: Key Roles

• EVMS Implementation: Lessons Learned

Overview of Earned Value Management


Overview of EVM

• Overview of Earned Value Management

– Overview

– ANSI /EIA 748 Earned Value Management System Standard

– EVMS is a “System of Systems”

5

Earned Value Management is…

• Earned Value Management Is a PROJECT MANAGEMENT METHODOLOGY that Uses Objective Measures that Enable Project Managers to Objectively Analyze and Report Project Performance

• EVM Is Used to Identify, Communicate and Manage the Resource Effect of Technical and Schedule Problems

• Earned Value Management Provides the Ability to Compare COST of the Work Completed with the VALUE of the Work Completed

Copyright © 2010 Deltek, Inc.

Actual costs(ACWP)

Perform

ance Measurement Baseline (P

MB)

ManagementReserve

Budget atComplete

}

$

DaysReport Date Completion date

02468

10121416182022

2 4 6 8 10 12 14 16 18 20

Estimate At Complete (EAC)

Budgeted costs

(BCWS)

Earned Value

(BCWP)

BAC

MR

Completing the Picture

6Copyright © 2010 Deltek, Inc.

7

Organization

Planning, Scheduling and Budgeting

Accounting

Analysis and Management Reports

Revisions and Data Maintenance

NDIA ANSI/EIA 748 EVMS Standard

32

Gu

idelin

es

≈1

37

Typ

ical A

ttri

bu

tes

5 Guidelines19 Typical Attributes






8

SchedulingTool

AccountingSystem

(i.e. Cost Point)

EVM Tool(i.e. Cobra)

(i.e. MS Project)

Technology

EVMS is a “System of Systems”


9

Hours by Project & Task

SchedulingTool

Schedule Dates

Work Breakdown Structure (WBS)

Scope Definition, Requirements, Key Events

Manageable Work Segments,Dependencies

EAC / ETC

Schedule Status

Reports, Analytics

Control Acct Plans (CAP)

Reports (ContractPerformance Report,

Variance Analysis Report)

PMB

Program Logs

Actual and Accrued Costs

AccountingSystem

(i.e. Cost Point)

Budgets


Charge Codes

(i.e. MS Project)

Material, ODC, Subcontractor Costs

EVM data, Metrics

Processes



10


SchedulingTool

Schedule Dates




EAC / ETC

Schedule Status

Reports, Analytics




PMB

Program Logs


Project Management

Team

Management, Stakeholders

AccountingSystem

(i.e. Cost Point)

Budgets


Charge Codes

(i.e. MS Project)


EVM data, Metrics

Technology – Processes – People

People



Processes: Project Management Using Earned Value


Processes

• Processes: Project Management Using Earned Value

– Proposal/Project Concept Phase

– Project Initiation/Baseline Establishment Phase

– Project Execution/Performance Phase

13

Project Lifecycle

• Earned Value “Work Products” Are Developed, Controlled and Maintained throughout the Project Lifecycle

Proposal / Project

Concept Phase

Project Initiation / Baseline

Establishment Phase

Execution / Performance

Phase


14

Statement of Work or Contract Mod

Outputs: SOW/WBS Matrix, WBS Index, WBS Dictionary

Assign Control Account

Responsibility

Identify Project Organizations and

Subcontractors

Develop Master Schedule; Estimate

Resources

Define Requirements, Key Events and

Deliverables

Pro

ject

Co

ntr

ols

&

Sch

ed

ulin

gR

esp

on

sib

ilitie

s

Identify Manageable Work

Segments

Prepare Initial Time-Phased

Estimates

Output: Responsibility Assignment Matrix (RAM)

Outputs: Organization Breakdown Structure (OBS)

PM

/ C

AM

R

esp

on

sib

ilitie

s

Submit Proposal

Output: Integrated Master Plan (IMP)

Identify Risks

Output: Time-phased Estimates (incl. Sub and Material estimates)

Outputs: Integrated Master Schedule (IMS), Subcontractor Schedules

Proposal Phase


15

Output: Updated Control Account Plans (CAP)

Outputs: Updated SOW/WBS Matrix,WBS Index and Dictionary

Output: Resource Allocation Notices, UB and MR

Output: Updated Integrated Master Plan (IMP)

Output Performance Measurement Baseline (PMB)

Contract Award

Authorize Project Allocate

ResourcesUpdate Scope,

Key Events, Deliverables,

Work Segments

Pro

ject

Co

ntr

ols

&

Sch

ed

ulin

gR

esp

on

sib

ilitie

s

PM

/ C

AM

R

esp

on

sib

ilitie

s

Update Risk Register

Outputs: Updated IMS& Sub Schedules

Develop Control Account

Plans Create Project Baselines Update

Schedules

Output: Contract Approval Notification

Establish Project

Charge Codes

Baseline Establishment Phase


16

1. Define The Work

2. Schedule the Work

3. Allocate Budgets100

4060

1525

30 Time

Dol

lars

Contract Budget Base

PMB

Performance Measurement Baseline



Developing the PMB

• Develop the Scope Baseline:

– Authorize the Project

– Define the Project Scope, Major Deliverables, and Milestones

– Develop Work Breakdown Structure

– Identify Responsible and Performing Organizations

– Identify Control Accounts and Assign Responsibility

• Develop the Schedule and Budget Baselines:

– Develop the Project Schedules

– Develop Control Account Plans (CAPs)

– Integrate CAPs into Detailed Project Schedules

– Approve the Performance Measurement Baseline

18

Scope Baseline Development

Statement of Work

Develop High-Level Schedules

Pro

ject

Co

ntr

ols

&

Sch

ed

ulin

gR

esp

on

sib

ilitie

s



PM

/ C

AM

R

esp

on

sib

ilitie

s

Outputs: High-Level Schedule

Output: Risk Register


PlansDevelop Detailed

Schedules

Outputs: High-Level Schedule, Integrated Master Schedule (IMS)

Develop Performance Measurement

Baseline

Output: Performance Measurement Baseline (PMB)



Responsibility

Identify Program Organizations and

SubcontractorsDefine

Requirements, Key Events and

Deliverables Identify Manageable

Work Segments


Identify Risks

Output: Control Account Plans (CAP)



Scope Baseline

• Step 1: Authorize the Project

• Step 2: Define the Project Scope, Major Deliverables, and Milestones

• Step 3: Develop the Work Breakdown Structure (WBS)

• Step 4: Identify Responsible & Performing Organizations

• Step 5: Identify Control Accounts & Assign Responsibility

20

Schedule & Budget Baseline Development

Statement of Work

Develop High-Level Schedules

Pro

ject

Co

ntr

ols

&

Sch

ed

ulin

gR

esp

on

sib

ilitie

s



PM

/ C

AM

R

esp

on

sib

ilitie

s

Outputs: High-Level Schedule

Output: Risk Register


PlansDevelop Detailed

Schedules

Outputs: High-Level Schedule, Integrated Master Schedule (IMS)

Develop Performance Measurement

Baseline

Output: Performance Measurement Baseline (PMB)



Responsibility

Identify Program Organizations and

SubcontractorsDefine

Requirements, Key Events and

Deliverables Identify Manageable

Work Segments


Identify Risks

Output: Control Account Plans (CAP)



Schedule & Budget Baselines

• Step 1: Define the IMS Framework

• Step 2: Develop Control Account Plans

• Step 3: Select an Earned Value Technique (EVT)

• Step 4: Develop the Detailed Project Schedules

• Step 5: Validate the Time-Phase Budgets

22

Mech Design

Elec Design

100% of work is planned in control accounts

Drafting

Proj

ect

Eng

Mfg

Test

Desig

nQ

uality

Work Breakdown Structure

Project

Eng Mfg Test

Design Quality

Vehicle

Transmission Frame Assembly Suspension

Frame SeatsFenders

Fender RodsFender Body

ControlAccount

ControlAccount

ControlAccount

ControlAccount

O N D J FFY 07

$ $ $ $

$ $ $ $$ $ $ $

$ $ $ $

ControlAccount$1000

Intermediate

Master

Detail

ControlAccount$2500

ControlAccount$1200

ControlAccount$4000

Control Account Planning


23

Output: Updated CAPs

Outputs: Internal Mgt Reports and CPR; Corrective Action Report

Output: Variance Analysis Report

Output: Updated Program Log

Output: Revised Estimates

Output: Updated Schedules

Outputs: Subcontractor cost and schedule status

Manage Overhead

Rates

Accumulate Costs

Work Authorizations

Measure Performance;

Forecast ETCs; Analyze EACs

Analyze Variances

Develop and Analyze

Performance Reports; Develop Corrective Action

Plans

Maintain Program

LogsStatus

Schedules

Outputs: Work Authorization Forms

Manage Subcontractors &

Inter-company Organizations

Acc

ou

ntin

g

Re

spo

nsi

bili

ties

Pro

ject

Co

ntr

ols

&

Sch

ed

ulin

gR

esp

on

sib

ilitie

s

PM

/ C

AM

Re

spo

nsi

bili

ties

Project Execution Phase


Measuring Performance

Work the Plan

Define the Work

Plan the Work

Collect Results

Measure Performance Against the Plan

Analyze Variances

Change Control

Institute Appropriate Corrective Actions

24Copyright © 2010 Deltek, Inc.


Measuring Performance

• Step 1: Status Control Account Plans and Schedules

– Update Schedules

– Update Status of Work Packages

– Update Estimates to Complete

• Step 2: Calculate Earned Value

• Step 3: Accumulate and Integrate Actual Costs

• Step 4: Calculate Variances, Indices and Estimate at Completion (EAC) Costs


EVM Analysis Objectives

• Current Status Determination

– Where are we today

• Forecast for the Future

– What is the estimated cost at completion

• Identify Trends (no surprises)

– Where are we headed

• Indications for Management Action

27

Control Account CumulativeWork Package BCWS BCWP ACWP CV SV

1.1 11100 Project Management1.1.1 Project Management and Control 82,445 82,445 65,168 17,277 0

Control Account Totals: 82,445 82,445 65,168 17,277 0

1.2.1 13100 ABC Solution Design, Development & Verification1.2.1.1 ABC System Design 198,672 198,672 146,769 51,903 01.2.1.2 ABC Solution Implementation 115,741 19,592 73,469 -53,877 -96,1491.2.1.3 System Verification 55,450 19,394 9,824 9,571 -36,0551.2.1.4 ABC User Manual Update 13,631 133 0 133 -13,4981.2.1.5 Alternative Test Scenario and Support 0 0 2,436 -2,436 0

Control Account Totals: 383,494 237,791 232,497 5,294 -145,703

1.2.2 13100 ABC System Production Deployment1.2.2.1 Deployment Preparation 4,095 464 0 464 -3,6321.2.2.2 Deployment Support 0 0 0 0 01.2.2.3 Post-Deployment Support 0 0 0 0 0

Control Account Totals: 4,095 464 0 464 -3,632

Grand Total 470,035 320,700 297,665 23,035 -149,334

EVM Report Example


28

Control AccountWork Package EVT BAC EAC VAC

1.1 11100 Project Management1.1.1 Project Management and Control LoE 110,514 66,050 63,464

Control Account Totals: 110,514 66,050 44,464

1.2.1 13100 ABC Solution Design, Development & Verification1.2.1.1 ABC System Design 50-50 198,672 146,769 51,9031.2.1.2 ABC Solution Implementation User Def 115,741 211,546 -95,8051.2.1.3 System Verification 30-70 75,276 48,441 26,8351.2.1.4 ABC User Manual Update User Def 13,631 44,277 -30,6451.2.1.5 Alternative Test Scenario and Support 50-50 0 53,105 -53,105

Control Account Totals: 403,320 504,138 -100,818

1.2.2 13100 ABC System Production Deployment1.2.2.1 Deployment Preparation % Comp. 10,238 18,618 -8,3801.2.2.2 Deployment Support % Comp. 17,103 17,103 01.2.2.3 Post-Deployment Support % Comp. 1,570 1,570 0

Control Account Totals: 28,912 37,291 -8,380

Grand Total 542,746 607,479 -64,733

EVM Report Example


Technology: Tools and Interfaces


Technology

• Technology: Tools and Interfaces

– Using Deltek’s Cobra as the EVM engine

– Integrating Cobra with Microsoft Project or Primavera P6

– Integrating Cobra with Cost Point or GCS Premier

– Enhancing analysis and reporting with wInsight

Accomplisments

Events

Criteria

Integrated Master Plan (IMP)

Work Packages

Control Accounts

Tasks

Integrated Master Schedule (IMS)

WBS


EVM Tool /Performance Management

System (Cobra)Responsibility Assignment Matrix

(RAM)

Organization Breakdown Structure

(OBS)

Cross - referenced

Statement of WorkCross - referenced

Iterative Risk Assessments

Risk Mitigation Action Plans

Supplemental Schedule

Relationship Between Work Products


32


SchedulingTool

Schedule Dates




EAC / ETC

Schedule Status

Reports, Analytics




PMB

Program Logs


Project Management

Team

Management, Stakeholders

AccountingSystem

(i.e. Cost Point)

Budgets


Charge Codes

(i.e. MS Project)


EVM data, Metrics

Technology – Processes – People

Integrating Technology


33

Detail Project Schedule


34

Time-phased Budget


35

SchedulingTool

Schedule Dates





PMB

Budgets


(i.e. MS Project)

Schedule Integration into Cobra


36

SchedulingTool

Schedule Dates





PMB

Budgets


(i.e. MS Project)

Schedule Integration into Cobra

Schedule Status


37

Actual Cost Integration into Cobra


SchedulingTool

Schedule Dates




EAC / ETC

Schedule Status PMB

Program Logs


AccountingSystem

(i.e. Cost Point)

Budgets


Charge Codes

(i.e. MS Project)



38

wInsight Enhancement


SchedulingTool

Schedule Dates




EAC / ETC

Schedule Status PMB

Program Logs


AccountingSystem

(i.e. Cost Point)

Budgets


Charge Codes

(i.e. MS Project)


Reports, Analytics

wInsight

EVM data, Metrics


39

Project Data in Cobra


People: Key Roles


People

• People: Key Roles

– The Control Account Manager’s Role

– The Project Manager’s Role

– The Project Control Analyst’s Role

42

Responsible and accountable for planning and executing the scope of the control accounts assigned within the designated schedule and budget

Detail plans the scope into discrete work packages, level of effort and planning packages that support the schedule

Subdivides the allocated budget to the work packages so that it is time-phased and reflects the way in which actual costs are expected to be incurred

Identifies and obtains specific resources required to perform the work

Assigns an performance measurement technique to each work package that supports the performance goals (time-phased budget)

Responsible and accountable for planning and executing

the scope of the control accounts assigned within the

designated schedule and budget

Detail plans the scope into discrete work packages, level

of effort and planning packages that support the

schedule

Subdivides the allocated budget to the work packages so that it is time-phased and

reflects the way in which actual costs are expected to

be incurred

Identifies and obtains specific resources required to perform

the work

Assigns an earned value method to each work package that supports the performance

goals (time-phased budget)

The CAM is the

PROJECT MANAGER

for his assigned

scope, schedule and cost

Company

Eng Mfg Test

Design Quality

Control Account Manager


Project Manager

• Review Internal Monthly Performance Reports

• Review All Variance Analysis Reports (VARS) with CAMS and Program Analysts

– Determine if performance trends for any control account warrant a VAR

– Determine if any activities’ cost, schedule or technical performance risk warrant a VAR even though the threshold for the control account may not have been exceeded

• Review and Approve Corrective Action Plans Initiated by CAMS with Follow-up to Closure

• Review of the Run-out Efficiency snd Performance Efficiency Changes Required to Meet the Current ETC Plan


Project Control Analyst

• Work with the CAMs to status schedule activities terms

• Facilitate the transfer of schedule status from the scheduling system to the EVM system

• Facilitate the transfer of actual costs from the accounting system to Cobra

• Work with CAMs to assess the status and trends for technical, schedule, and cost performance

• Support the CAMs in performing Variance Analysis

• Maintain Contract Budget Base, Management Reserve, and Undistributed Budget logs


EVMS Documentation

• The Backbone of the EVMS Is the Company’s EVM System Description and the Associated Policies, Procedures, Templates, Desktop Instructions

Policies, Procedures and Templates

Earned Value Management System Description Program Baseline Control & Maintenance P & P EVMS Roles and Responsibilities Guidelines Program Status Updates P & P Program Integration P & P Material Management P & P Program Directives Guidelines Indirect Cost Management P & P Work Breakdown Structure (WBS) P & P Performance Analysis and Reporting P & P Organization Breakdown Structure (OBS) P & P Integrated Master Plan (IMP) P & P Responsibility Assignment Matrix (RAM) P & P Subcontractor Management P & P Program Scheduling P & P Material Management P & P Control Account Planning P & P EVMS Surveillance P & P Rates P & P EVMS Surveillance Plan Fiscal Calendar P & P Undistributed Budget P & P Subcontractor Management P & P Management Reserve P & P Performance Measurement Techniques P & P Actual Cost Accumulation P & P Work Authorization P & P


EVMS Documentation (cont.)

• Sample Desktop Work Instructions:

Desktop Work Instructions

Program Scheduling Work Instructions Control Account Plan Work Instructions Program Baseline Control and Maintenance Work Instructions Program Status Updates Work Instructions Performance Analysis and Reporting Work Instructions Rates Work Instructions Fiscal Calendar Configuration in Cobra Work Instructions


EVMS Training Modules

• Sample Training Modules:

EVMS Training Modules

Work Breakdown Structure (WBS) Subcontractor Management Organization Breakdown Structure (OBS) Undistributed Budget Responsibility Assignment Matrix (RAM) Actual Cost Accumulation Control Account Planning EVMS Surveillance Fiscal Calendar Indirect Cost Management Integrated Master Plan (IMP) Labor Recording Management Reserve Material Management Performance Measurement Techniques Performance Analysis and Reporting Program Integration Program Baseline Control & Maintenance Program Scheduling Program Directives Guidelines Program Status Updates Work Authorization Performance Measurement Baseline Development

Control Account Manager (CAM) Certification Training

EVMS Implementation: Lessons Learned


Lessons Learned

• Potholes to Avoid:Procrastination Delaying the EVMS implementation or

making it dependant on the award of a contract

Complacency Not being current on EVM requirements

Unrealistic Expectations Underestimating the time and resources needed to implement an ANSI-compliant EVMS

Wandering Aimlessly Not having clear EVMS goals and implementation roadmap

Underestimating Cultural Impact Not planning for the organizational change impact that the EVMS will have

Lack of Discipline Not following up the EVMS implementation with a formal surveillance program

Business as Usual Not managing the EVMS relationship with your customer


Questions

• Kelly Meassick, PMP

– (256) 755-0449

– [email protected]

deltek insight 2010: earned value management is a “system of systems”

Business

value management processes

earned value technology

guidelines management

earned valuebudget

project managementmethodology

project managementusing

project li

ms project evm data