13/30/98 11:39

SPMNDr. Norm Brown

Susie Meyer - MITREDr. Norm Brown - Software Program Managers Network (SPMN)

Cost Schedule

Technical

SWEE `98

Earned Value Management (EVM) andSoftware Development

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SPMNDr. Norm Brown

Outline

● EVM introduction

● Practical example

● Effective use in software development

Cost Schedule

Technical

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SPMNDr. Norm Brown

EVM = Integrated Management

Earned Value Management (EVM)

Cost Schedule

Technical

� EVM is a management technique that integrates cost,schedule , and technical performance measurement and goals

� Instead of simply comparing cost incurred to a spend planEVM incorporates actual work accomplished

� EVM should be integrated with risk management and otherprogram metrics for effective project management

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SPMNDr. Norm Brown

❶ Plan all work sco pe for the pro ject to com pletion.

❷ Integrate pro ject work scope, schedule, and costob jectives into a baseline plan against whichaccom plishments ma y be measured.

❸ Objectively assess accomplishments at the workperformance level.

❹ Analyze significant variances from the plan andforecast impacts .

❺ Summarize data to hi gher levels for mana gementdecision makin g and for im plementin g correctiveaction when necessar y.

Basic Concepts of EVM

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SPMNDr. Norm Brown

Work Breakdown Structure - The Key toIntegrated Management

WBSWBS

TECHNICALProgress Plan

COST SCHEDULE

RISKRisk Profile

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SPMNDr. Norm Brown

Purpose of Earned Value: Effective Management

* Source: GAO Report May 97

Contract: 4 miles of railroad track in 4 months for $4 million.Status: After 3 months, onl y $2 million has been s pent.

PLANNED WORK

$ 3M

$ 1M

$ 1M

$ 1M

COST OFWORK$ 2M

$ 1M

$ 1M

Question: How are you doin g (and how do you know )? *

EARNEDVALUE

$ 1M

$ 1M

SCHEDULEVARIANCE

$1M - $3M = ($2M) (66% behind )

COSTVARIANCE

$1M - $2M = ($1M) (100% overrun )

Estimate at Com pletion: $8M and 8 months late

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SPMNDr. Norm Brown

An EVM Example: A graphic view

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

Dec-97 Jan-98 Feb-98 Mar-98 Apr-98

$$ M

illio

ns

Total Budget

$3M

$2M

Work Scheduled

Cost Incurred

Time Now

Earned Value

$1M

} Sch Var($2M)

{Cost Var($1M)

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SPMNDr. Norm Brown

Ma

y-9

8

Jun

-98

Jul-

98

Au

g-9

8

Sep

-98

Oct

-98

No

v-9

8

De

c-9

8

Ap

r-9

8

$5

$6

$7

$8

Data Date

$0

$1

$2

$3

$4

De

c-9

7

Jan

-98

Feb

-98

Ma

r-9

8

$$ M

illio

ns

Budge

t

Actual Cost

Earned Value

EstimateRevised

($8M)

($4M)Budget

Estimate to Complete

(ETC)

CostOverrunof $4M

<----------- Schedule Sli ppage = 8 Months ----------->

An EVM Example: A graphic view (concluded)

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SPMNDr. Norm Brown

EVM & Integrated Planning

● EVM must be used to MANAGE, not just re port● Schedules should be well thou ght out with detailed

dependenc y networks- Incor porate all inte grated product teams (IPTs) in the

develo pment of the schedule● Develo p schedule activities in term of quantifiable tar gets or

metrics- Make those same metrics the basic buildin g blocks of the

EVMS- Metrics then become the plannin g and resource allocation

inte gration link● This link makes EV status ob jective and quantifiable

- Can be inde pendentl y evaluated and statused

CT

S

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SPMNDr. Norm Brown

Reference

● Software Pro gram Mana gers Network home page- htt p://www.s pmn.com

● Earned Value home page- htt p://www.ac q.osd.mil/ pm/- Includes several links such as

● Polic y● DIDs (CPR and CSSR)● Papers and presentations

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SPMNDr. Norm Brown

A thought!

“The reall y nice thin g aboutnot plannin g is that failurecomes as a com plete sur priseand is not preceded b y lon gperiods of worr y anddepression!”

Micro Plannin g International

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