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Earned value, XP and government contracts
- 1. © 2003 CH2M HILL Communications Group
Page 1
Earned Value, XP and Government Contracts
Can XP live in an Earned Value
reporting government contracting
environment?
- 2. © 2002 CH2M HILL Communications Group
Data contained on this sheet is proprietary; use or
disclosure is prohibited. Page 2
BD02005 A 08/29/02
What’s the Issue Here?
Earned Value Management is the standard reporting method for many
government and large infrastructure projects.
EV has little exposure in commercial software development
Agile software development methods are entering this business domain.
Just now being understood in government contracting
Merging the two “cultures” would seem to be undesirable by both parties
In fact both cultures have much to offer each other
To quote Kent Beck
“Optimism is an occupational hazard of software development, feedback is the
cure.”
Earned Value is the feedback in “units of analysis” understood by the funding
agency.
- 3. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Basic EV versus Agile Processes
Earned Value Agile Development
A Big Picture of the project from a
starting baseline.
Continuous production of useable
software at fine grained iteration
boundaries
Accurate estimates at completion
as early as 15% from the start
using “earned” value for each
deliverable.
Prediction of the next iterations
effort, with a fixed duration using
“yesterday’s” weather as a
measure of tomorrow’s progress
End–to–end value production
tracking using variable units of
production and measure.
Iteration–to–Iteration productivity
tracking using fixed units of
production and measure.
- 4. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Earned Value in a Single Slide
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BD02005 A 08/29/02
Some Fundamental Concepts of Earned Value
Never relate what was planned to be spent (BCWS) to the actual amount spent
(ACWP).
This tells us nothing of value
It can even warp our thinking into attempting to under–spend our allowed amount
to report favorable numbers.
Cost Performance (CV) must focus on what has been accomplished (BCWP)
versus what was invested to accomplish that work (ACWP)
- 6. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
The Realities of Government Contracting
Traditionally a “linear” development process rooted in CMM
Many of the linear aspects are critical to the success of the project.
Nuclear work processes, mission critical support, fault–tolerant applications
High–ceremony work artifacts
Department of Energy is the customer
They get to say what artifacts are needed
Formal “project controls” and “program management”
EAI–748A defines the earned value deliverables
This is “baked” into the contract
More importantly, it’s how we get paid – by reporting “earned value” to plan.
- 7. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Our Formal Project Delivery System
XP–like development process
“Like” since we don’t perform all 12 practices
“Like” since we don’t call it XP, but we do call it “agile”
Balanced Scorecard strategy and objectives
This is an IT governance process widely used in large organizations
It is supportive of teams, projectizaiton, and agile processes
Project Portfolio Management
Traditional PPM, with weekly reporting of progress to plan
PPM management team defines projects and marshals the “customer”
Team Based delivery systems
Teams are everything
Projects are the deliverables from teams
- 8. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Our Challenge and Opportunity
Most experience with Earned Value is on large projects.
>$100M
Newer experiences on “smaller” projects – “micro EV” is the term used in the
industry.
CMMi Level 3 or 4 is the “norm”
Our mission is to provide applications and infrastructure for an $11,000,000,000
de–construction project of critical importance to the nation.
Evidentiary materials are still in three–ring binders for assessment and certification
Introducing agile methods into this environment is a challenge
Not because of the processes
But because of the financial reporting requirements, CMM compliance, and
operational security requirements
- 9. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
XP Practices Deployed at RFETS
XP Practice Our Deployment
Planning Game Biweekly planning session
Small releases Biweekly iteration releases with full integration with Configuration
Management, SQA, and IV&V
Metaphor Not used
Simple Design Forced on team by “time boxed” schedules
Test First Design No test fixtures yet, but 100% UT is our goal
Refactoring Not a major impact yet, since system are early in lifecycle
Pair Programming Not usually allowed because of code access security requirements. Some
PP in small groups
Collective
Ownership
Not usually allowed due to Configuration Management and Cyber Security
requirements
Continuous
Integration
Heavy investment in tools appears to be needed, but some progress for
daily builds
40 Hour Week Mandated by contract, actually 80 hours in two weeks
On Site Customer Customer Relationship Manager (CRM) with detailed process knowledge
Coding Standards Inherited from CMM
- 10. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Project Profiles
Nextel secure voice provisioning system
Inventory control
Phonebook management
Order management
Billing distribution
IT Department Portal development
.net based system
Integration of legacy and new systems
User supplied connections of other sites and applications
- 11. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Drivers for Agility
Continuously changing regulations and agency orders
Changing customer representatives
Limited funding sources
Fluid workforce with multi-project assignments
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BD02005 A 08/29/02
EVMS at the Iteration Level
BCWS – from Work Authorization, linear spread or manual by period
ACWP – from ETS (time cards)
BCWP – from “testable requirements”
Start Month 1 Month 2 Month 3 Month 4 End
Week 1 Week 4.3Week 4Week 3Week 2
Month 5
BCWS – Linear distribution from WA budget
BCWS – User defined over duration of the WA
ACWP from ETS
BCWP from “testable requirements”
Iteration Iteration Iteration
Stories = BCWS
Tasks = BCWS in more detail
Assignments = ACWP
Velocity = BCWP
Testable Requirements = 0%/100% BCWP
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BD02005 A 08/29/02
EVMS at the Iteration Level
Integration of Earned Value Management and XP takes place at the iteration
boundaries
Each iteration forms a min-EVMS cycle
BCWS is the estimate of the effort for the iteration
BCWP is the “value” of the testable requirements
ACWP is the actual effort to deliver the testable requirements
The challenge is to define the BCWP as a percentage of a large set of
deliverables
“Re-baselining” is major challenge since a “fixed” baseline is normal for EVMS
Dividing the project into major sections is the approach to “stabilizing” the baseline
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BD02005 A 08/29/02
Three Critical Success Factors
The quality of the baseline
Iteration boundaries need to have good estimates of effort
Macro level estimates of project variables – cost and schedule
The performance against the baseline
Capture actual labor hours against budget
Accurate estimates of “value” (BCWP) from testable requirements
Management’s determination to influence the results given performance indices
Full by-in of processes and outcomes
Willingness to “let the process evolve”
Incorporation of agile processes with CMMI Level 4 framework
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BD02005 A 08/29/02
Our current approach
Replace XP’s velocity with Earned Value metrics.
Create fine–grained measures of BCWP using “testable requirements.”
Establish the BCWS baseline at the beginning of each iteration.
Capture ACWP through a time keeping system.
Compute Cost Variance, Schedule Variance from the three base earned value
metrics
Compute Estimate at Completion (EAC) and Estimate to Completion (ETC)
from these base metrics as well.
- 16. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Embedding XP in a Large Context
Much of the “noise” in XP is how to position these practices in a larger context.
We take the position
XP is about writing code
Providing supporting processes for writing code
Delivering code to the customer
There are other activities in the software business though
Project management
Funding management
Regulatory and Order compliance
SV&V
Cyber Security
SQA
- 17. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Embedding XP in a Large Context
XP Delivery
Solution
Architecture
Delivery Management
Solution Architecture – is business focused
XP Delivery – is code focused
Delivery Management – is cost and schedule focused
Schedule management –
creation and maintenance of
top level schedules
Budget and Finance
management – financial plans
and reporting to the funding
agency
Scope management –
interactions with external
dependencies
Change control and integration
disposition
- 18. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
Our Current Problems with This Approach
Dedicated customer
Customer with consistent vision of the outcome
Middle management resistance
Culture of “agile” versus “command and control”
Integrating EV tools with XP practices
De-programming senior management of the term “extreme”
Multiplexing team resources to higher priority projects
Moving from maintenance and operations to process improvement
- 19. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
What We’ll Do Different in the Next Round
Dedicated resources – no shared anything
Our current environment multiplexes development resources
“Single Voice” customer – too many good opinions of an outcome
All “voices” have validity
Single “chartered” outcome prior to XP project start
Simple project – pick a “no brainer” project
Too much “discovery” as well as process deployment
Clearly define outcome – pre-defined requirements
“Pre packaged” requirements
Much higher visibility with middle management
Continuous training effort
- 20. © 2002 CH2M HILL Communications Group
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BD02005 A 08/29/02
What’s Next
Increase UT tools
Roll out EVMS to all software projects
Produce a “working example” for everyone to see
Education of modern processes and their value to our contract
Incorporating agile practices in CMMI Level 4 framework