EVM is more than people, processes, and tools. It's an integrated service that provides actionable information to the decision makers. Webinar, EcoSys, October 22, 2014.

1. +
Earned Value Management Essentials
Earned Value Management is more than people, processes, and tools.
It is an integrated service that provides actionable information to the
decision makers

2. + The Six Business Systems Needed
for Project Success
2
Accounting
Material
Management
Estimating
Property
Management
Earned Value
Management
Procurement

3. + The Core Systems Needed for
Earned Value Management
3
Accounting
Material
Management
Estimating
Property
Management
Earned Value
Management
Procurement

4. +
Z
44 Data Elements of a Baseline
Earned Value Management System
1. Contract scope
2. Contract Modifications
3. WBS and CWBS Dictionary
4. Work Authorization
5. Summary Level Planning Packages
6. Control Account Performance Reports
7. RESERVED
8. Integrated Master Plan
9. Organization Charts
10. Organizational Breakdown Structure
11. Responsibility Assignment Matrix
12. Integrated Master Schedule
13. Intermediate Schedule
14. Detailed Schedule(s)
15. Proposal Basis of Estimates
16. Schedule Update Forms
17. Resource Plan
18. EAC Updates
19. EV Update Form
20. Subcontractor / Vendor IMS
21. Material Schedules
22. Staffing performance Reports
23. Material Labor
24. Baseline Change Report
25. Bill of Materials
26. OBS / WBS Performance Report
27. Material Status
28. Material Data
29. Subcontractor Data
30. Estimated Actuals
31. Indirect Performance Reports
32. Accounting System Data
33. Summary Performance Reports
34. Earned Value Metrics
35. Variance Reports
36. External Performance Reports
37. RESERVED
38. Corrective Action Plans
39. Risk Management Reports
40. Technical Performance Reports
41. Baseline Change Request
42. Contract Change Requests
43. Change Logs
44. Budget Logs
4

5. + Activities That Use This Data
5
§ Define
the
work
§ Assign
responsibili3es
§ Define
indirect
procedures
§ Establish
proper
management
controls
§ Schedule
all
work
§ Authorize
all
work
§ Time-­‐phase
the
work
§ Develop
cost
accounts
§ Material
costs
§ Unit/lot
costs
§ Cost
summariza3on
§ Understand
contract
status
§ Use
data
for
decision-­‐making
Assignments
made
to
responsible
organiza3ons
Maintenance
of
budget,
work,
and
schedule
rela3onships
Do
not
modify
past
budget
or
actuals
(w/
o
permission)
All
documents
properly
maintained
Planning
Scheduling
and
Budge3ng
Organiza3on
Analysis
and
Management
Reports
Accoun3ng
Considera3ons
Revisions

6. + 11 of the 32 EIA-748-C Guidelines
Critical to Program Success
6
1. Define a Work
Breakdown Structure
2. Identify the
Organizations
doing the work
5. Integrate WBS
and OBS into a RAM
6. Schedule all
Planned Work
7. Identify Products
and Milestones
8.Time Phase the
Budget
16. Record all
Direct Costs
23. Determine all
Variances
25. Sum These
Variances
26. Manage Action
Plans
28. Incorporate Changes

7. + Performance Indicators Derived
from EVMS Data and Processes
7

8. + These Indicators …
… must reveal root causes of performance shortfall.
8
Unrealistic Performance
Expectations missing Measures of
Effectiveness and Performance
Unrealistic Cost and Schedule
estimates based on inadequate risk
adjusted growth models
Inadequate assessment of risk and
unmitigated exposure to these risks
without proper handling plans
Unanticipated Technical issues
without alternative plans and
solutions to maintain effectiveness
Cost and
Schedule
Impacts
TheLensofthe
PerformanceIndicators
“Borrowed” from Gary Bliss,
Director, Performance Assessments
and Root Cause Analyses (PARCA),
Office of Assistant Secretary of
Defense for Acquisition.

9. + 10 Critical Success Factors for
Deploying an EVMS
9
1. If a project has a scope, schedule
and budget, EVM can be an
effective project management
tool.
2. EVM's principles are reliable
predictors of project success.
3. Expert planning is required to use
EVM effectively.
– This expertise can be learned
through coaching, mentoring, and
external advice
4. EVM works best in collaborative
organizations where teamwork
and frequent communications are
present.
5. EVM complements other project
management techniques.
6. VM metrics are reliable,
consistent, and trustworthy.
7. Contract type doesn't influence
EVM's benefit.
8. Retrofitting EVM after a project
is under way is a bad idea.
– This is exactly what happens, so
we’ll just have to deal with it
9. EVM's mechanics can be
emphasized individually for
maximum benefit.
10. Active, top-down support is
required to increase EVM
acceptance.

10. + The Integrated Program
Management System …
n Budget processes – assign, authorize, and record
n Fully Integrated cost and schedule – all work has
budget
n Status reporting – expenditures of time and budget
with resulting technical progress
n Change management – to maintain the integrity of the
baseline
n Earned Value performance techniques – that
Objectively assesses accomplishments at the work
performance level.
… must address each principal of success with
data,processes and actionable information
10

11. +
Connecting the Dots
Between Cost, Schedule and
Objective Assessment of
Technical Performance
The role of the Earned Value Management System (EVMS) is to
connect the dots between budget (BCWS), performance (BCWP) –
informed by technical performance, schedule, risk reduction
activities, and estimates to complete
11

12. + Sources of Objective Technical
Measures of Technical Performance
Risk
SOW
Cost
WBS
IMP/IMS
TPM
PMB
GA
12

13. + The Dots and Their Connections
Each data element and its connection increases the visibility
to the program’s performance assessment
13
WBS
TPMs
EVM
ETC
EAC
Irreducible
uncertainty
in
reference
classes
Reducible
uncertainty
held
in
Risk
Register
Schedule
Margin
in
DI-­‐MGMT-­‐81861
Cost
Con3ngency
†
Risk
re3rement
in
PMB
Management
Reserve
covers
unmi3gated
risk
MOE
MOP
Physical
%
Complete
PE
SA
AC
JROC
KPP
IMP
IMS
WP
KPPs

14. + Technical Performance Informs
Earned Value
Critical Success of Program Management means connecting
the dots of Cost,Schedule,and Technical Performance
Integrate
cost
and
schedule
performance
with
objec7ve
technical
measures
of
performance
Objec3ve
Technical
Measures
Cost
Performance
Schedule
Performance
Conven3onal
Earned
Value
+
=
Basis
of
Es3mate
developed
from
scope
of
work
and
historical
performance,
and
risk
adjusted
for
all
classes
of
cost,
to
produce
a
resource
loaded
PMB
with
MR
established
in
the
EVMS.
The
ETC
and
EAC
updated
as
the
program
progresses
using
objec3ve
technical
measures
of
performance.
Cost
Measures
of
Effec3veness
(MOE),
Measures
of
Performance
(MOP),
Technical
Performance
Measures
(TPM),
Key
Performance
Parameters
(KPP),
and,
other
…ili7es
of
the
technical
aspects
of
the
program
performance
inform
the
Physical
Percent
Complete
used
to
Inform
BCWP.
Objec3ve
Technical
Measures
Determinis3c
IMS
derived
from
the
IMP
/
Statement
of
Work
(SOW),
showing
how
all
deliverables
defined
in
the
WBS
will
be
produced
and
reducible
risks
mi3gated
with
Re7rement
Plans,
and
Irreducible
risks
mi3gated
with
schedule
margin
and
Management
Reserve,
to
establish
the
Credible
PMB.
Schedule
GA
14

15. +Assembly the moving parts
into a successful EVMS
People, processes, and tools are the start. For real
sustainable success more is needed
15

16. +To be successful in this assembly …
16
We need the ability to install,
train,mentor,coach,surveil,
operate,and sustain a program’s
Program Planning and Controls
functions to provide actionable
information to the decision
makers

17. +Tools
n Ready for market DOD, DOE, NASA, OMB Circular
A-11, Part 7 compliant Earned Value Management
System
n All IPMR formats
n Integrated risk management for Schedule Risk Analysis and
Technical Risk Management
n Cost Accounting integration for PMB management
n EVM in a Box notion
n Ready to use version
n Requires only WBS, Control Account, and Work Package
structures
n Charge Numbers
n Contains data elements associated with EVM
17

18. +Processes
n Earned Value Management System Description
n EVMS Guidelines tailored to program need
n Work Instructions for baseline processes
n Tailored sections for integrated systems
n Control Account Manager resources
n Training
n Coaching
n Check list cards
n Forms
n Program Manager resources
n Reports
n Forecasting tools
n Variance analysis tools
18

19. +People
n Subject Matter Experts – in EVMS, Program Planning
and Controls, Risk Management and Integrated
Master Planning and Scheduling.
n System Integration people and processes – capable
of connecting data and process between the six
business systems.
n DCMA / DCAA validation experience and processes
– based on DAU 262 and DCMA training and
processes.
n Broad federal government agency and commercial
experience in EVMS and Program Performance
Management.
19

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