establishing the performance measurement baseline (v4)

Copyright 2011©, Niwot Ridge, L.L.C. All Rights Reserved

ESTABLISHING THE PERFORMANCE MEASUREMENT BASELINE (PMB)

AACE WORKSHOP DENVER, COLORADO APRIL 16TH, 2011

The Performance Measurement Baseline is a time–phased schedule of all the work to be performed, the budgeted cost for this work, and the organizational elements that produce the deliverables from this work.

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Credible ! Capable of being credited or believed.

Performance … Accomplishment of a given task measured against preset standards of accuracy, completeness, cost, and speed.

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Measurement … Values made meaningful by quantifying into specific units.

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Clearly defined starting point (point of departure) from where implementation begins, improvements judged, or comparison is made.

Copyright Lewis & Fowler 2011 ©, All Rights Reserved

" Construct the Performance Measurement Baseline from the Work Breakdown Structure.

" Assign performance measures to Work Packages.

" Assign probabilistic measures of performance to the network of Work Packages.

" Use this information to make decisions.

Today We Will Learn The Steps Needed To …

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The Overall Context Of Building The Performance Measurement Baseline has 4+1Major Activities.

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Identify Needed Business

Capabilities

Establish a Performance Measurement

Baseline

Execute the Performance Measurement

Baseline

Capabilities Based Plan

Business Value Stream

Earned Value Performance

Technical Performance

Measures

Business Value Stream

Technical Requirements

Establish a Requirements

Baseline

Technical Performance

Measures

4


The Performance Measurement Baseline is really 3 baselines – Technical , Schedule, and Cost.

Cost Baseline

Schedule Baseline

Technical Baseline

Perform Functional

Analysis

Determine Scope and Approach

Develop Technical

Logic

Develop Technical Baseline

Develop WBS

Define Activities

Estimate Time

Durations

Sequence Activities

Finalize Schedule

Identify Apportioned Milestones

Determine Resource

Requirements

Prepare Cost

Estimate

Resource Load

Schedule

Finalize Apportioned Milestones

Determine Funding

Constraints

Approve PMB

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The core elements of the Performance Measurement Baseline (PMB) …

… Are a collection of Work Packages, that define: ! The deliverables that fulfill the needed requirements

and project capabilities, ! The estimated duration and work effort for each Work

Package, ! The resources needed to produce these deliverables

within the needed time period, and ! Any dependencies – internal or external – needed to

start a Work Package.

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Let’s Build a BSL Level 4 Laboratory

Deliverables Based Planning Handbook for A&D, Copyright © 2008, 2009, Lewis & Fowler

Decompose the Project Scope into a product based Work Breakdown Structure (WBS), then further into Work Packages describing the production of all deliverables traceable to the requirements

Decompose Scope into Work

Packages

Assign Responsibility to Work Packages (the groupings of deliverables) for the named owner accountable for the management of resource allocation and cost baseline and technical delivery

Assign Responsibility for Deliverables

Arrange the Work Packages in a well formed network with defined deliverables, milestones, internal and external dependencies, appropriate schedule and cost margin.

Arrange Work Packages in Logical Order

Develop a Time–Phased Budgeted Cost for Work Scheduled (BCWS) from labor and material costs in each Work Package and the Project as a whole. Assure proper resource allocations can be met and budget profiles match expectations of the project sponsor

Develop BCWS for Work

Packages

Assign object Measure of Performance (MOP) and Measures of Effectiveness (MOE) for each Work Package and summarize these for the Project as a whole

Assign WP Measures of Performance

Build a time–phased network of schedule activities describing the work to be performed, the budgeted cost for this work, the organizational elements that produce the deliverables, and the performance measures showing this work is proceeding according to plan.

Establish the Performance

Measurement Baseline A Baselined Schedule that Creates the Services or Products to Meet The Requirements

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3.1

3.2

3.3

3.4

3.5

Establish a Performance Measurement Baseline (PMB) used to forecast Work Package and Project ongoing and completion cost and schedule metrics

Set Performance Measurement

Baseline

3.6

The information contained in this document is proprietary to Lewis & Fowler

7

1 Decompose Scope Into

Work Packages

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Capabilities, Requirements, WBS, and Work Packages are connected to define “Done.”

Business Capability Construct BSL Lvl-4

Bio Laboratory

1st Level BSL Lvl-4 design

basis

1st Level Bio product process

design basis

2nd Level Product storage

2nd Level Product Inventory

2nd Level Materials Handing

2nd Level Isolation processes

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3.1

Dec

ompo

se S

cope

into

WPs


Connect the WBS to Work Packages (WP), then define the Tasks for the Deliverables to produce Value.

Business Need Build and Manage the

Bio Lab

1st Level BSL Level 4 Design

Basis

1st Level Bio product process

design basis

2nd Level Product Storage

2nd Level Product Inventory

2nd Level Materials Handing

2nd Level Isolation processes

Deliverables defined in WP

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3.1

Dec

ompo

se S

cope

into

WPs

2 Assign

Responsibilities

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Assign accountability for each component of the Work Package.

#  Each Work Package has a single owner who is accountable for: ! Defining the deliverables ! Assigning resources ! Balancing the resource usage ! Defining the Earned Value measurement criteria !  Identifying any apportioned milestones ! Reporting physical percent complete

#  Name this person in the Work Package and the Master Schedule

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3.2

Ass

ign

Resp

onsib

ilitie

s


Assign The Responsibilities And Make A Single Person Accountable

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3 Arrange

Work Packages

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“Arranging” the Work Packages Is An Iterative And Incremental Process

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3.3

Arr

ange

WPs

with

Wor

k St

ream

s


Identify the Predecessors and Successors between Work Packages to sequence the work effort.

#  Give some thought about the sequence of the Work Packages, ! What deliverables come first? ! What deliverables come next?

#  The reason for this should be obvious. #  Use a Work Authorization (WA) processes to

keep the sequence of work intact.

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3.3

Arr

ange

WPs

with

Wor

k St

ream

s


Start with a “notional” arrangement of the “Chunks” of work within a Workstream

# WPs should have No intermediate connections or outcomes.

7w

7w

5w

5w

1w 3w 3w

3w 2w

7w

5w

#  Long running WPs with negative or positive lags to maintain sequencing.

# Break the WP into separate deliverables and sequence Finish to Start.

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3.3

Arr

ange

WPs

with

Wor

k St

ream

s

4 Develop Budgets

For Work Packages

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Develop a time–phased budget from the network of Work Packages based on resource loads

Duration of the Work Package

Bud

get


Bud

get


Bud

get

Duration of the Work Package B

udge

t

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3.4

Dev

elop

Bud

get f

or th

e W

ork


Balance All The Work Packages Across The Project Before Setting The Baseline

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Cost, Schedule, Technical Model†

WBS

Task 100

Task 101

Task 102

Task 103

Task 104

Task 105

Task 106

† This is a Key concept. This is the part of the process that integrates the cost and schedule risk impacts to provide the basis of a credible schedule.

Probability Density Function

"  Research the Project "  Find Analogies "  Ask Endless Questions "  Analyze the Results "  What can go wrong? "  How likely is it to go wrong? "  What is the cause? "  What is the consequence?

Monte Carlo Simulation Tool is Mandatory

1.0 .8 .6 .4 .2 0

Days, Facilities, Parts, People

Cumulative Distribution Function

Days, Facilities, Parts and People

3.4

Dev

elop

Bud

get f

or th

e W

ork

5 Assign

Performance Measures

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Identify objective measures of performance for each Work Package

#  Define the Planned Value (BCWS) for each Work Package completion or apportioned milestone within a Work Package.

#  Only Physical Percent Complete should be used to measure progress – no “opinions” of progress.

#  Answer the question, ! How are we going to recognize that progress is being

made? !  The passage of time and consumption of resources is NEVER

a measure of progress.

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3.5

Ass

ign

Perf

orm

ance

Mea

sure

s


Assign BOE data for measuring performance of the Baseline before actually building the schedule

#  The contents of the Work Packages. #  The person accountable for the Work Package. #  The Earned Value method. #  The cross plan dependencies. #  Any value stream attributes.

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3.5

Ass

ign

Perf

orm

ance

Mea

sure

s

6 Set

Performance Baseline

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Baseline the schedule to establish the planned budget spreads for each Work Package

#  Baselining the Performance Measurement Baseline (PMB) is the first step in successfully of Executing the project plan.

#  Without the baseline and the rigorous change control over the baseline, the needed credible performance predictions will be not possible.

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3.6

Set P

erfo

rman

ce B

asel

ine


"  Lack of predic-ve variance analysis.

" Un-mely and unrealis-c Latest Revised Es-mates (LRE).

" Progress not monitored in a regular and consistent manner.

"  Lack of ver-cal and horizontal traceability cost and schedule data for correc-ve ac-on.

"  Lack of internal surveillance and controls.

" Managerial ac-ons not demonstrated using Earned Value.

"  InaDen-on to budgetary responsibili-es.

" Work authoriza-ons that are not always followed

"  Issues with Budget and data reconcilia-on.

"  Lack of an integrated management system.

" Baseline fluctua-ons and frequent replanning.

" Current period and retroac-ve changes.

"  Improper use of management reserve.

"  EV techniques that do not reflect actual performance.

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Glen B. Alleman Niwot Ridge Consulting

4347 Pebble Beach Drive Niwot, Colorado 80503

303.241.9633 [email protected]

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