Eviap Conference Lisbon Portugal 2011

EVM Practice
Business Solutions & Lessons Learned

Mohan Kondur
BE(Honors), PGDIE (Ind Engg), MBA, PMP, PgMP

EVIAP Project Control & EVM Conference Lisbon, Portugal
November, 15th & 16th 2011 © 2011 All Rights Reserved

EVM Practice - AGENDA
Business Solutions & Lessons Learned
2

Introduction
45 Min
Approach
Lessons Learned
Tool Artifacts

Q&A
15
Min Demo

12/29/20 EVIAP Project Control & EVM Conference Lisbon, Portugal
11 November, 15th & 16th 2011 © 2011 All Rights Reserved

Who is Mohan Kondur- BS, MS, MBA, PMP, PgMP
3
• Program Manager (Delivery , EPMO )
• EVM Customer &
• NOT an EVM Insider
 Diverse Industry Sector Engagements
 Health Sector : United Health Group, Detroit Medical Center, BCBSM
 Auto / Manufacturing Sector: GM, Ford, Chrysler ,Delphi, GE, HMT (India)
 Finance / Banking Sector: Ford Credit, Comerica Bank , Allay Bank ( former GMAC)

 35+ years in the field
 Program /Project Management, Business Management & Marketing, Industrial Engineering

 EVM Publication PMI CPM’s Quarterly News Letter “Measurable News” Summer 07
 http://www.pmi-cpm.org/members/library/KondurFINAL.pdf


Presentation Objective ( Share Lessons Learned / Best Practices)

Share
 Lessons Learned
 EVM Practice Guidelines
Model Enhancements (Thought Starters)
Earned Schedule (Emerging Practice)
DEMO (time permitting)

Organizational Transformation
Internalize EVM into Project Management

EVM Transformation
Partir Confiança
Parar !!
4

Who is Prj Mgr? Executes EVM or Executed By EVM?
5

Executes?

Executed?

Key Differentiator.. EV Process Quality & Reliability

Project Management Process Quality – An Imperative for EVM Practice

6

Ensure end-to-end QUALITY
Closing
Initiating

Initiating Processes
Planning Processes
Executing Processes
Monitoring &
Controlling Processes
Closing Processes
From To
Project Cradle Project Grave


Hitting EV Bulls Eye
7

No Pain No Gain

SPI / CPI &
Earned Schedule
TRACKING DUE DILIGENCE

QUALITY IMPLEMENTATION
& PROCESS COMPLIANCE
Pain Killers Available

SPI & CPI - 101
8

 Status indicators of Schedule & Cost

 Binary by Definition. Either
 You are On-Track (SPI & CPI = 1.0)
 Or You are NOT
 Precision Metrics by Nature
Current Used to be
SPI EV / PV BCWP / BCWS
CPI EV / AC BCWP / ACWP
Common Thread (or Handicap?) - Cost-Based Model

Cost Model SPI/CPI – 3 Showstopper Issues
9
Issue # 1
Financials & WBS are rarely integrated.
Budgets are usually managed:
 At a Contract / Engagement Level
 Rarely at a WBS Deliverable Level
Issue # 2
Billing Rates: NOT internalized in WBS. Usually
managed external to WBS
Competition Sensitive Data
Artificially Blended Rates
Issue # 3
Typical PM Behavior / Mindset
Focus on Schedule, NOT Cost


Model Workaround
10

Cost Model Hours Model

1 BCWS or PV Baseline Effort Hours

2 ACWP or AC Actual Effort Hours

Determining EV
Options to
Calculate
3 BCWP or EV Earned Hours


EV – Calculation – PMI Status Quo
11

Remark
Option Method EV Rule
s
= 100% of baseline if Task Completed
1 0 - 100 % Same as
= 0% of baseline for any other Status
in
= 100% of baseline if Task has Completed PMBOK
0 – 50 -100%
2 = 50% of baseline if Task has Started
(aka 50-50)
= 0% if Task has NOT Started

3 % Complete = % Work Complete * Baseline
Thought
Starters
4 ETC Forecast = Baseline – Remaining Work

All Options are Tool Supported; To Illustrate Option-4


Option-4 ETC Forecast Method - Example
12

Determining Earned Value Hours
PV - Baseline Work, say
EV Critical 100
AC - Actual Work, say
CPI Critical 50
ETC - Remaining Work, say
SPI Critical 70
EVA Critical EV - Earned Value
30
= 100 - 70

Schedule Driver “What is Remaining” to Complete


EV Risks Corrected Model - Thought Starter
13

EV Risks
linked to

EVA Reliability
WBS

WBS Quality SPI/CPI

WBS Quality


Risks Corrected EVA = Standard EVA * WBS Quality
14

Triple
Constraint
Risks

1. Scope Risk

2. Schedule Risk 3. Cost Risk
Overall WBS Risk Quality = Average of Scope, Cost , Schedule
Let us review WBS quality index an example

WBS Quality Index – EV Risks Measurement Example

%
Quality How Measured Tasks Quality
Risk Source Weight (Count # of Tasks) in WBS Score

Scope 1/3 All 10 Tasks Base-Lined 100% 33%
Schedule 1/3 Only 9 Tasks Estimated 90% 30%
Cost 1/3 Only 6 Tasks Resource-Assigned 60% 20%

Overall WBS % Quality ( = Risk) 83%15

Interpreting Risk Adjusted EVA
16
Standard SPI / CPI
Green SPI = 1.05 => Ahead of Schedule

Schedule Quality 90%
Scope Quality 100%

Cost Quality 60%
Risk Adjusted SPI
0.87 = 1.05 * 83%
Overall WBS Quality = 83%
Behind Schedule

 Schedule is Really at Risk or
 87% Confidence about an 1.05 SPI

EVA Custom Tool - MS Project Add-on – Just a Mouse Click

EVA Knowledge (or Mechanics)- Least Important
PM Delivery Maturity & WBS Quality More Important

Project
Generate

SPI / CPI
Consolidate Tool
Consolidate & Rollup
Program
17

EVA Tool Artifacts Project SPI / CPI - Spreadsheets)
18

EVA Demo : Earned Value SPI / CPI vs. Baseline
(All Tasks ) (Hours Based) - As of 2/9/2007
Quality : Overall (83%) Scope (71%), Schedule (100%) Cost(78%)

1.40

1.20

SPI
1.00 CPI
CPI
CPI SPI
Risk SPI
0.80 Risk CPI Risk CPI
SPI CPI
Risk Risk SPI

Risk SPI
0.60

0.40

0.20

0.00
1/28/2007 2/4/2007 2/11/2007
SPI CPI Risk SPI Risk CPI


Program Roll up - EVMs (SP/CPI)
19
Consolidated Demo Project : Schedule Performance Index (SPI)
(Hours Based) - As of 4/29/2005

Component Project-3 SPI Component Project-1 SPI
1.40

1.20

1.00

0.80

0.60

0.40

0.20

0.00
02/05/05 02/12/05 02/19/05 02/26/05 03/05/05 03/12/05 03/19/05 03/26/05 04/02/05 04/09/05 04/16/05 04/23/05 04/30/05

Demo_Project 1 - ba seline d Demo_Project 2 Demo_Project 3

Program Rollup EV Status Date SPI CPI
Project - 1 08/04/06 0.92 0.78

Project - 3 08/04/06 1.15 0.99


EVM Implementation Lessons Learned
20

 Fortune 100 Implementation
 Not Just Theory

EVM Lessons Learned – Environment
21

• Multi-Year Strategic Program
• Multi-Supplier Autonomous Projects
• Program Governance Framework
• Outsourced Project Management / PMO


EVM Practice - Lessons Learned
22

1. Milestone Mindset - PM & Org Culture Block
2. Project Level Ownership Lack of Ownership
3. EV Reliability - WBS Quality GIGO
4. EVM Initiative Sustenance Keep it simple
5. Doctored WBS – Evergreen WYG WYA
6. Higher Band Risks Too good to be true
7. Program / Portfolio Rollup Not Actionable
8. Schedule / Cost Tracking EV Practice Critical


Lesson # 1: Milestone / Date Mindset-PM / Organizational Culture Block

23

SPI / CPI fails whenever Projects communicate only
through Milestones & Dates
Resolutions:
 Ensure Deliverables-Oriented WBS
 Track Level of Effort (LoE) Hours
 Train, Educate & Mentor Project Managers


Lesson # 2 Project Level PM Ownership & Accountability
24

PM Ownership is Crucial
Resolution:
 Project PM generates & owns SPI / CPI
 Resist temptation to generate EV Metrics by
central PMO or a Project Coordinator


Lesson # 3 EV Reliability – WBS Quality
GIGO ( Garbage in Garbage Out)
25

Standard SPI / CPI does not
factor in WBS Quality

Mitigation Approach:
 Risk-Adjusted SPI/CPI Model


Lesson # 4 EVM Sustenance
26

Sustained EVM initiative requires
Continuous Accommodation &
Collaboration, especially in a
Multi-Supplier Outsourced
Projects & Stakeholders
Environment
Mitigation Approach:
 Keep it Simple & be Flexible

Lesson # 5 Doctored WBS - WYGWYA
27

3% 4% 91% 2%
700
649

600
Standard SPI
500
Goal 1.0
Frequency

400 Risk-Adjusted
300
SPI 265

200

100
37 40
3 0 1 0 0 3 5 8 14 13 4 0 3 2 1 2 1 1
0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0

>1000 Data Points; > 40 Projects SPI

WYGWYA .. What You Get is Whatever You Ask


Lesson # 6 Higher Band Lesson
28
Track being Ahead. But be Suspicious. Too Good to be True !!

Higher Band? Ahead ??
1.10
Way Ahead
1.00
Goal Goal
On Track
0.95
At Risk 0.90
Way Behind
0.80

0.70

0.60
Wk1 Wk2 Wk3 Wk4

Lesson # 7 Program Rollup EVM
29

Program Rollup
• Practically Useless. NOT ACTIONABLE
• Usually Great for Boardroom Color Management
Project Level Analysis, Ownership & Accountability is Crucial
Project AND / OR Program / Portfolio
SPI / CPI
Structure Structure
Single SPI-Rollup
WBS

SPI-1 SPI-2 SPI-3

Lesson # 8 Schedule / Cost Tracking is EVM Critical
30

 Heavy Cost .. Enterprise Technology
 Low Cost .. Project / Excel Macros
 Choose whatever means ..
 EVMetrics does not Care
 EVM Practice Cares
 Just Ensure Quality Tracking Process

TRACKING
FOUNDATIONAL
PILLAR


Tracking Mandatory to Mitigate Project Schedule / Cost Obsolescence Risks

Requires
Tight Rope
Quality Walk

Any Project Plan becomes obsolete the moment
finalized Unless Tracked

31

Project Schedule / Cost Tracking: Top Challenges
32

HOW TO:
 Track Without High Costs?
 Maximize Team Collaboration?
 Support Organizational Metrics Initiatives?
 Minimize ADMIN Drudgery?
 Avoid System Choke (Month End, Week End)?
 Simplify Technology and Be User Friendly?


Market Scan: Tracking Solutions State
33

 Many Options - Windows, WEB, Others. Typical Outcomes :
 High Cost ($$ / ) , Hidden / Training Costs, HighTech
 Gold-Plated / Over-Featured
 Unproven. Yet to see evidence of effective implementation

Typical Rollout Experiences ( MS Project Server , Planview)
• Never-ending Mega Projects in themselves
• Hardly Meet Business Expectations
• Significant time wasted on chasing tool issues &
diverted away from managing / resolving Core Delivery
& Project Issues


LoE Project Tracking – EV Practice Critical
34

Estimates To Complete (ETC) - Schedule Critical
Actual Effort - Cost Critical
Periodic Tracking (ETC & Actual) - EV Practice Critical
TOOL SUPPORT (MS Project Platform)

Electronic LoE Timesheets Tool Periodic LoE Tracking Cycle

Create Validate

Apply


Tracking is EV critical
35

 Logistics & How Tracked:
 EVM Does NOT Care about Tracking Logistics

 EVM Does Require Quality Tracking Due diligence

 Tracking Solutions Cost Impact:
 Heavy Cost: Enterprise Technology Solutions

 Low Cost: Project Centric Solutions (MSP / Excel Macros)


Conclusion ( Conclusao )
36

Priorities for Successful EVM Practice
1. Project Management (PM) Domain
Ensure : Quality Planning Process Backbone
Internalize : EVM into Project Control Practices

2. EVM Domain
EVM Implementation / Adoption / internalized in PM HIGH PRIORITY
EVM ISO Stds LOW PRIORITY. May follow after PMI releases PM ISO Stds for PM

•PM Delivery Maturity & Magic is MORE Crucial
•Tracking is a MUST


Thank You, Obrigados !!
37

 Q&A
 Tool DEMO
 On-line now, if time permits
 Off-line later, if required


Eviap Conference Lisbon Portugal 2011

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