Earned Value Management and Agile Tips for Success

Earned Value Management and Agile Tips for Success

Brent Barton, President, Agile Advantage, Inc.

!  The Problem !  An Agile Story !  Contracts vs Value !  Scrum (An Agile Project Management Framework)

!  TradiAonal Earned Value Management !  Agile Earned Value Management (AgileEVM) !  Project Case Study !  Open Discussion

*Slides available via NDIA, slideshare.net or geKngagile.com

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!  Robert Gates, the United States Secretary of Defense, in a September 2008 speech, said, “Our convenAonal modernizaAon programs seek a 99% soluAon in years. Stability and counterinsurgency missions—the wars we are in—require 75% soluAons in months.

3 ©2011 Agile Advantage, Inc. All rights reserved.

Agile Methods: Selected DoD Management and AcquisiAon Concerns, Carnegie Mellon University, October 2011, p. ix

Focus on frequent feedback cycles to determine which 75% is correct


This is the best, simplest, easiest to use applica=on we have ever go@en in both

Customer Care and the Retail Stores!

Whatever you all did, I want more of that!

Value

Cost Savings

New Revenue

Compliance

Customer SaAsfacAon

Employee SaAsfacAon

Shareholder Value

Revenue RetenAon

  Cost Savings

  Employee SaAsfacAon   Customer SaAsfacAon

  New Revenue through efficiency

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!  # Lives saved !  Simple to Use

!  Secure !  ?


Value

Scope

Schedule Cost

The primary purpose of the [EVMS] system is to support program management*

* Earned Value Management Systems ANSI/EIA-‐748-‐B-‐2007 9

!  Time and Materials (T & M) !  Fixed Price !  Cost Plus IncenAve Fee !  IDIQ/Delivery orders

•  or task orders


These are cost-‐based!

Value

Constraints (Schedule, Cost, Scope)

Quality

Source: Jim Highsmith

Strategic

Required to make good Decisions

Informs and Guides

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Focus on value delivery,

informed by constraints and

quality


We are uncovering beper ways of developing soqware by doing it and helping others do it. Through this work we have come to value:

Individuals and interacAons over processes and tools Working soqware over comprehensive documentaAon

Customer collaboraAon over contract negoAaAon Responding to change over following a plan

That is, while there is value in the items on the right, we value the items on the leq more.

13 ©2011 Agile Advantage, Inc. All rights reserved. hpp://agilemanifesto.org/

!   It is not possible to completely specify an interacAve system. Wegner’s Lemma, 1995

!  Uncertainty is inherent and inevitable in soqware development processes and products.

Ziv’s Uncertainty Principle, 1996

!   For a new soqware system the requirements will not be completely known unAl aqer the users have used it. Humphrey’s Requirements Uncertainty Principle, c. 1998

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!   Stack Ranked PrioriAzaAon based on Business Value and risk

!   Self organizing, cross-‐funcAonal teams

!   DefiniAon of Done !   PotenAally Shippable Increments

!   Velocity !   ConAnuous Improvement

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If you only touch it once, you are not

itera=ng. Be@er to make

small failures and learn rather than suffering big failures.


Management Reserve!

(PV)

Total Allocated Budget!

Time!Now!

Completion!Date!

$ PMB

EAC

Time

Planned Value

(AC) Actual Cost

Performance Management Baseline

EsAmate at Complete

(EV) Earned Value

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CPI < 1 CPI =1 CPI > 1

Over Budget On Budget Under Budget

SPI < 1 SPI =1 SPI > 1

Behind Schedule On Schedule Ahead of Schedule

Cost Performance Index (CPI=EV/AC)

Schedule Performance Index (SPI=EV/PV)

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!  Integrates cost and schedule management !  Forecasts in financial units based on units used for actual cost

!  Decades of use !  Part of PMBOK (ANSI/PMI 99-‐001-‐2008)

!  Part of EVMS (ANSI/EIA-‐748-‐B-‐2007)

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!  Typical implementaAons expect everything fully defined up front

!  No asserAon of quality !  Claiming value earned on intermediate work products

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Ugh!

!   A planning package is a holding account (within a control account) for budget for future work that it is not yet pracAcable to plan at the work package level. The planning package budget is Ame-‐phased in accordance with known schedule requirements (due dates) for resource planning, and the plans are refined as detail requirements become clearer and the Ame to begin work draws nearer. A program may elect to break the work assigned to a control account into smaller groupings of tasks, i.e., mulAple planning packages, for internal planning and control reasons.

-‐Earned Value Management Systems ANSI/EIA-‐748-‐B-‐2007

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!  There is no standard advance planning look-‐ahead period (i.e., a planning “horizon” or “window”) for conversion of planning packages into work packages that is appropriate for all programs or condiAons. Each organizaAon must determine its own policies in this regard.

-‐Earned Value Management Systems ANSI/EIA-‐748-‐B-‐2007

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Replace (un-‐learn) some company EVMS policies to support adap=ve

planning


!  MathemaAcally proven that Forecasts based on average velocity (story points)≡ esAmate at complete EAC (dollars)

!  Key AssumpAon: The raAo of (story points completed)/(total story points in a release) is a good measure of Actual Percent Complete

Sulaiman, Barton, Blackburn “AgileEVM -‐ earned value management in Scrum projects,” 2006 hpp://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=1667558

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!  Release Baseline •  Budget (BAC) •  IniAal Scope •  Start Date

!  Each IteraAon (Sprint) •  Points accepted by Product Owner

– meets DefiniAon of Done •  Points add or removed from release scope •  Actual Cost

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!  Now we can focus on Value…

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!  Because the performance measurement baseline (PMB) is expressed as “number of story points planned” rather than at the level of specific tasks, it allows course correcAons to be made without disrupAon or re-‐baselining of the PMB.

!  This addresses the criAcism expressed in the Defense AcquisiAon Reform Findings and RecommendaAons (DARFAR) report regarding the inability of tradiAonal EVMS to idenAfy issues related to “contract requirements that uperly failed to meet warfighter needs” [House Armed Services Commipee 2010].


Agile Methods: Selected DoD Management and AcquisiAon Concerns, Carnegie Mellon University, October 2011, p. 63

!  Integrated Cost and Schedule informaAon provides beper insights than schedule alone

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AgileEVM helps balance defined

plans and adap=ve

planning for delivering value


!  Focus on delivering value !  Constraints inform, not dictate outcomes

!  Quality must be part of the decision process

!  AgileEVM helps communicate by translaAng points to dollars •  Can provide alternaAves to contracAng challenges

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!   Focus on frequent feedback cycles to determine which 75% is correct

!   Focus on value delivery, informed by constraints and quality

!   If you only touch it once, you are not iteraAng. Beper to make small failures and learn rather than suffering big failures.

!   Replace (un-‐learn) some company EVMS policies to support adapAve planning

!   AgileEVM helps balance defined plans and adapAve planning for delivering value

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!   President: Agile Advantage, Inc. !   Former CTO, Development Manager, PMO Manager, Agile Coach, Mentor, CerAfied Scrum Trainer, ScrumMaster, Product Owner

!   AcAve pracAAoner delivering value using Agile and helping others do it; from small Product companies to very large organizaAons

[email protected] www.agileadvantage.com Blog: geKngagile.com Twiper: brentbarton

!   ArAcles •  “Manage Project Por�olios More EffecAvely by Including Soqware Debt in the Decision Process”, Cuper

Journal 2010 •  “AgileEVM – Earned Value Management in Scrum Projects”, IEEE 2006 •  “ImplemenAng a Professional Services OrganizaAon Using Type C Scrum”, IEEE •  “Establishing and Maintaining Top to Bopom Transparency Using the Meta-‐Scrum”, AgileJournal •  “All-‐Out OrganizaAonal Scrum as an InnovaAon Value Chain”, IEEE

Earned Value Management and Agile Tips for Success

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