Assessing the general health of a project and establishing an early warning system for unexpected problems, starts by measuring the Physical Percent Complete of the project’s deliverables.

1. Assessing the general health of a project and establishing an early warning system for unexpected
problems, starts by measuring the Physical Percent Complete of the project’s deliverables .
In most Commercial ITprojects, comparingplanversus actualcosts is the approach
to measuringprogress. Thisfinancial accounting approachfails to consider the
technical acheivement as a measure. Withthis approacg verylarge costs canbe
incurredwithlittleor no tangible evidence of progress.
Using EarnedValue measurements of Cost andSchedule, combined withTechnical
Performance Measures results ina correlated measure of PhysicalPercent
Complete of the program’s work activities.
Managingprojects inthis waystarts bycollectingphysical deliverables inWork
Packages defined ina WorkBreakdownStructure (WBS). Assigning PlannedValue
(PV)(BCWS) to the deliverablesfrom each Work Package is the foundation for measuringPhysical Percent Complete. Using this measure and
the Cost and Schedulevariances a forecast of future project performance canbe built.
Using Earned Value to Increase the Probability of Success for Commercial IT Projects
For EarnedValue to be successful, the fundamentals ofproject management must first be in place:
1. A properlyformed WorkBreakdown Structure, with product structures not functional structure – describingalltechnical workneededto
complete the project.
2. An Accountability Matrix for all Work Packages deliverables identified with a named manager and withsenior management commitment
to provide neededresources.
3. Willingnessof the WorkPackage Managers to adhere to the principlesof EarnedValue andDeliverables BasedPlanning.
4. An IntegratedProject Reportingsystemto capture the performance of the work describedinthe Master Schedule.
With the EarnedValue capabilities in place, the project team can start managingthe project usingthe activitiesin Table 1.These are not all
the neededactivities for success, but are the foundation ofmeasuringphysical percent complete.
Element Activity Outcome Benefit
Work
Breakdown
Structure
 Establisha structure that identifies the
deliverable products from the work efforts.
 Assignthe PlannedValue (PV) for each
Work Package that produces these
deliverables.
 Connections betweenplanned
cost, schedule, andTechnical
Performance Parameters for
each keydeliverable are
documentedina single location.
 Metrics comparedfor the cost,
schedule andtechnical performance
of the program’s deliverables to
assure physicalpercent complete
mappedto product deliverables.
Work Package
Deliverables
Plan
 Assure the WorkPackagescapture the
entire scope of the program’s technical
work and the activities neededto produce
the deliverable.
 Identifyrisks, their mitigation or retirement,
and assure these are represented inthe
Master Schedule.
 Verificationthat eachkey
deliverable has all work
identified, TPMandTPPmetrics
defined.
 Programmatic andtechnical risk
mitigationandretirement
identified in a single location.
 A Performance Measurement Baseline
contains all workand measuresof
physical percent complete.
 A logic sequence ofwork efforts with
predefined
Earned Value
Project
Rhythm
 IdentifykeyTechnical Performance
Parameters for each project Work Package
and track PhysicalPercent Complete toward
the meetingthe project’s requirements.
 EarnedValue reporting to trackcost and
schedule progress against the planned
baseline.
 Measures of physicalpercent
complete definedfor each Work
Package prior to Work
Authorization release.
 Technical Performance Measuresand
EarnedValue Metrics are combined to
detect andunderstandthe emerging
programmatic andtechnical risk.
 Visibilityis provided to management
and project stakeholders about risk,
project performance andfuture cost
and scheduleimpacts
Table 1 -When Requirements Performance Measures are combinedwith Earned Valuemetrics, measures of physicalpercentcomplete result.This approach replaces the
subjectiveassessmentof progress withcredible,tangible and verifiablemeasures of physicalprogress againstplannedprogress.
Earned Value for Commercial Projects
Measuring Physical Percent Complete is the Foundation for Success
for Commercial IT Projects
 EarnedValue integrates Cost, Schedule andthe
Technical Performance of a project into a single
method.
 From this, objective measuresof project
performance are available, including variancesin
cost andschedule andadherence to the planned
product requirements.
 Identifyingphysical deliverables and assigning
them “EarnedValue” is the starting point for
success inIT projects.
Copyright© 2008, Niwot Ridge LLC
Measuring progress as the passage of time and consumption of resources leads to project failure.
Integrating Cost, Schedule, and Physical Percent complete ofthe requirements provides predictive performance analysis for the Project Manager.