A Business Case for EVM Process Discipline ...€¦ · Raytheon Australia RLM Systems Rockwell International Rockwell Systems Australia Rolls Royce, UK Rust Construction Services

www.mtca.uk.com

shaping innovative enterprise solutions

A Business Case for EVM Process Discipline A Presentation to

The Romanian PMI Chapter February 2005

By

Lloyd L Carter Managing Director

About MTCA Ltd

MTCA is a United Kingdom company specialising in Performance Management Consulting, Project Management Staffing and related Training Services for United Kingdom and European clients. Our vision is to be recognised leaders in the furtherance of the performance management discipline, a customer’s first choice for the provision of performance management system solutions and to continually improve through the professional growth and active involvement of our people. Employing only specialist staff with extensive project based experience, MTCA’s primary aim is to assist organisations to plan, establish and control their project, program, portfolio and strategic enterprise level endeavours. We identify the performance objectives at each level and then focus on the value, timeliness, integrity and analysis of relevant measurement data. We ensure that an enduring performance management system results by addressing the leadership, technique and cultural changes required within the organisation. We provide advice on governance and teaming structures to meet various contracting scenarios, help to identify key performance indicators and to develop integrated performance reporting systems that assist the various management levels to better comprehend their project and business performance. MTCA offers consultants and staff who are uniquely acquainted with international commercial and government practices and requirements. Project work in both Government and Industry sectors includes experience in telecommunications, shipbuilding, construction, electronics, aircraft, space, military, energy and transportation, many with a software intensive focus. It is affiliated with the Carter Management Group, which provides international services in Performance Management. Current organisations under the Carter Group brand operate in the United Kingdom as MTCA Limited, the United States as EMTCo LLC and Australia as MTC AustralAsia Pty Ltd. The skills, intellectual property and personnel of each of the cooperating entities in the Group are available to all of the other members of the Group.

MTCA Services

1. Performance Management Consulting

MTCA assists government and commercial organisations in the use of best practice performance management systems that provide timely, reliable and meaningful management information to facilitate decision making. Our objective is to implement and maintain systems that meet the requirements of both our clients and their stakeholders to bring organisational endeavours in on time and within budget. For effective business operation an organisation’s project management system should be appropriately coupled with the financial, procurement, time recording and reporting systems. We can assist in the integration of existing business systems and ensure that efficient, timely and accurate performance and other management data is reported. This function is greatly enhanced by the use of wInsight, the tool of choice for integrated performance management assessment and reporting around the world.

MTCA can also assist with tender development and evaluations, business case reviews and in-project performance evaluations. We perform a detailed analysis of project data, interview key personnel to identify cost, schedule and technical risks and forecast the likely final cost and schedule. EVM Assurance Services. For those companies requiring an independent assessment of the maturity of their earned value based project performance management system, MTCA can perform such an assessment against any chosen Standard. It is also possible to arrange for a Formal Certification Audit at any location globally, through our association with SAI Global, assessing compliance against any recognised national or industry based earned value Standard.

2. wInsight Performance Data Analysis System

MTCA is the sole United Kingdom distributor of the wInsight family of software which has become the tool of choice for integrated performance management assessment and reporting around the world. Amongst a myriad of other functions, wInsight has the capability of aggregating data from disparate sources such as several organizational elements and presenting it in a normalized, real time manner. It can connect to the leading commercially available earned value management and/or scheduling software. Such functionality is unrivalled and provides considerable advantage to an organisation attempting to manage its internal management and external supplier performance regardless of the geographical location of the source data. This can be achieved via industry standard X12 data transfer, xml or for more progressive organisations via wIsight web.

3. Training Services

MTCA provides tailored training services in association with its consultancies and staff placements. In addition we are able to offer stand-alone courses in acquisition management, project management, project planning and project accounting. MTCA staff have been providing training in Earned Value Management techniques for over a decade in the USA and Australia and more recently in the UK and other European countries. In addition, MTCA can perform a training needs analysis across your organisation, identifying critical tasks and associated organisational and staff proficiency. We are able to structure a training program to meet your proficiency needs and later re-assess staff proficiencies to measure effectiveness. We also offer ongoing coaching and mentoring programs.

Range of Services

wInsight Products

wInsight

wInsight Adminstrator

CS Glue

CS Glue Viewer

wInsight Connect

wInsight Web

Briefing Wizard

Risk+ for MS Project

Training Services

Training Courses

Project Management

Earned Value Management

Performance Based Contracting

Performance Management

Scheduling

Training Programs

Training Needs Analysis

Proficiency Profiling

Coaching and Mentoring

Performance Management Consulting Performance Management Techniques


Integrated Management Systems

Integrated Reporting Systems

Management System Documentation

Project Initiation and Planning

Integrated Baseline Reviews

Project Performance Evaluations

Governance and Teaming Structures

wInsight Implementation, Training and Technical Support

Business Case Reviews

Tender Preparation

Tender Response Evaluation

Experience

MTCA has extensive experience assisting organisations to develop, implement, document and support management control systems throughout the world. Our staff have between 10 and 35 years experience in both Defence and commercial industry working in a diverse range of projects and environments.

The following is a partial list of the organisations that our staff have assisted. European organisations are highlighted in bold print. ACT Electricity and Water Aerojet General AirServices Australia ATT Atlantic Research Corporation Augusta Westland Australia Graduate School of Engineering Innovation Australian Defence Industries Ltd Australian High Commission - London AWADI BAE Systems-UK Bell Helicopter Boeing Company Boeing Australia Borg-Warner Automotive Bureau of Meteorology Business Excellence Australia CelsiusTech Australia Pty Ltd Australian Department of Defence Department of Infrastructure (Victoria) Department of Workplace Relations Djimindi Alliance Eaton Corporation Fairchild Republic Ford Aerospace and Communications Corp. Ford Motor Co General Dynamics Corporation General Electric Company Gould, Incorporated GTE-Sylvania Harris Corporation Helitech Hercules, Inc Honeywell, Inc. Honeywell Ltd - Space & Aviation Division Hughes Aircraft Corp. ITT Litton Industries Lockheed Corporation M/A-COM Linkabit Corporation Martin Marietta Marconi GEC McDonnell Douglas Corporation

Ministry of Defence - United Kingdom Monsanto Motorola, Inc National Aeronautics & Space Administration Northrop Corporation NQEA Pty Ltd NSW RTA Pacific Access Perth Water Philips MEL Raytheon Australia RLM Systems Rockwell International Rockwell Systems Australia Rolls Royce, UK Rust Construction Services SAI-Global Science Applications International Corp Singer, Inc. Sperry Univac Stanilite Pty Ltd Storage Technology Corporation Strahan & Henshaw-UK Telecom, ATS Telstar, Pty Ltd Telstra, IS Telstra, Retail Telstra, IBU Telstra, CPO Tenix Defence Systems Thales Sensors – UK Thales Underwater Systems The Magnavox Company Transfield Amecon United States Air Force United States Army United States Defense Systems Management College United States Department of Energy United States Department of Transportation United States Navy VT Shipbuilding Westinghouse Electric Corporation Williams International Wormald

Contact Details:

MTCA Limited 1 Henbury Road

Westbury-on-Trym Bristol BSO 3HQ United Kingdom

Tel: +44 (0) 117 310 1266 Fax: +44 (0) 117 310 1267 Email: [email protected]

Web: www.mtca.uk.com

1

Slide 1Copyright MTCA 2005

A BUSINESS CASE FOR EVM PROCESSDISCIPLINE

Project Performance Management Using Earned ValueRomania PMI Chapter-February 2005


Learning Outcomes

Comprehension of the

principles of Earned

Value Management and

its application in Project

Performance Measurement and


(for reliable and objective

project analysis)

2


The Carter Management GroupLloyd Carter

Chairman

EMTCUS

Tom McCannChief Executive Officer

MTC AustralAsiaAsia

Stuart WilsonManaging Director

(Acting)

MTCAEurope

Lloyd CarterManaging Director


Who’s Here Today

• Experience in Project Management? • Current knowledge of

Earned Value?

3


Growth of EVMS

• Genesis in the US DOD Cost/ Schedule Control Systems Criteria requirements

• Evolved over the years to applications both government and commercial, in the US as well as internationally.

• Successfully applied to a wide range of size and project domains (e.g. communications, construction, mining, finance etc)

• ‘Best practice’ for project performance management incorporated into the PMI Project Management Body of Knowledge (PMBOK).

• Many companies have implemented EVM as a basic discipline of their project performance management process.


Project Performance Project Performance Measurement Using EVMeasurement Using EV

12

16

20

$24

2 4 6 8 10 12 14 16 18

4

8

TIME AXIS20

Planned Value

TIMENOW

SCHEDULE VARIANCE ($)

COST VARIANCE

22PLANNED

END

CO

ST A

XIS

Actual Cost Earned Value

CURRENTSCHEDULE

SLIP

1. WORK SCOPE

100

4060

1525

3030

2. SCHEDULE

3. BUDGET

4


QUESTION METRIC ACRONYM

How much work was PLANNED VALUE PVplanned for in the budget? (Budgeted Cost of (BCWS or S)

Work Scheduled)

How much work has been EARNED VALUE EVdone to date? (Budgeted Cost of (BCWP or P)

Work Performed)

How much has been spent ACTUAL COST ACto get the work done? (Actual Cost of (ACWP or A)

Work Performed)

What was the total job’s BUDGET AT COMPLETION BAC budgeted cost?

What’s the expected cost ESTIMATE AT COMPLETION EACof the total job now?

5 Basic Performance Metrics


Widget Example

• Task:– Build 10 widgets– Unit Planned Cost=$1,000– Budget at Completion=$10,000– Scheduled Rate=1 widget/month

5


Widget Project Progress, 5th Month

• Task:– Build 10 widgets

– Unit Planned Cost=$1,000

– Budget at Completion=$10,000

– Scheduled Rate=1 widget/month

• Performance Data– Budget=$5,000

– Actual cost=$4,000

– How are they doing?


Widget Project Progress, 5th MonthNow with Physical Progress








• Three widgets have been completed, none are in progress

6










• Three widgets have been completed, none are in progress

– Earned value = 3 widgets x the budgeted cost=$3,000








– Earned Value=$3,000


Schedule Variance= -$2,000

Cost Variance= -$1,000

7


BLISSFUL IGNORANCE, UNTIL ITS TOO LATE!

12

16

20

$24

2 4 6 8 10 12 14 16 18

4

8

TIME AXIS20

Planned Value

TIMENOW

22PLANNED

END

CO

ST

AX

IS

Actual Cost

I’m savinga fortune!

Without EV Data


INSIGHT, PROMPTING EARLY ACTION

12

16

20

$24

2 4 6 8 10 12 14 16 18

4

8

TIME AXIS20

Planned Value

TIMENOW

SCHEDULE VARIANCE ($)

COST VARIANCE

22PLANNED

END

CO

ST

AX

IS

Actual Cost Earned Value

CURRENTSCHEDULE

SLIP

I need todo something

about this!

With EV Data

8


COST VARIANCE = Earned Value – Actual Cost = $15k - $16k = -$1k

12

16

20

$24

2 4 6 8 10 12 14 16 18

4

8

TIME AXIS20

TIMENOW

COST VARIANCE

22PLANNED

END

CO

ST

AX

IS

Actual Cost $16kEarned Value $15k

I’m actuallyoverspent by $1k

Using EV - How is the Cost?


SCHEDULE VARIANCE = Earned Value – Planned Value = $15k - $18.5k = -$3.5k

Using EV - How is the Schedule?

12

16

20

$24

2 4 6 8 10 12 14 16 18

4

8

TIME AXIS20

Planned Value $18.5k

TIMENOW

SCHEDULE VARIANCE (-$3.5k)

22PLANNED

END

CO

ST

AX

IS

Earned Value $15k

CURRENTSCHEDULE

SLIP

I should havedone a lot more

}

9


Identification of Cost & Schedule Variances

PlannedValue

Earned Value

Actual Cost

TIME

svcv

$

schedule variance = EV - PV = negative numbercost variance = EV - AC = negative number

behind schedule,over cost

Earned Value


USING THE DATA TO FORECAST FORWARD PERFORMANCE

Predicting the Future

10


WHAT INFORMATION DO WE HAVE TO SUPPORT THIS?

12

16

20

$24

2 4 6 8 10 12 14 16 18

4

8

TIME AXIS20

Planned Value

TIMENOW

PM’sFORECAST

22PLANNED

END

CO

ST

AX

IS

Actual CostEarned Value

I’ve goteverything

under control

Given the current progress, when will we finish?

Forecasting-Project Manager Estimate


WHAT INFORMATION DO WE HAVE TO SUPPORT THIS?

12

16

20

$24

2 4 6 8 10 12 14 16 18

4

8

TIME AXIS20

Planned Value

TIMENOW

PM’sFORECAST

22PLANNED

END

CO

ST

AX

IS

Actual CostEarned Value Does Anybody

have this under control?

Given the current progress, when will we finish?

Forecasting-Independent Estimate

11


PHASES:CONCEPT DEFINITION IMPLEMENTATION CLOSE

OUTConstructiveOpportunity

DestructiveIntervention

AccomplishPlanPROJECT LIFE CYCLE

TIME

OPPORTUNITY

DECREASING

COST

INCREASING

Opportunityto

add

valuecost to

change

THE LATER YOU FIND OUT, THE MORE IT COSTS TO FIX!

You Need Early Warning


Early Stages!

• over 800 military programs show that ......

no program has ever improved performance better than the following EAC calculation

EAC = BACCPI

at 15% complete point in program

no one pays enough attention in the

USA Survey says…..

12


The EVM Lifecycle

Accounting, Analysing, Reporting, Acting, Revising and Maintaining

EXECUTING

Organising, Planning, Scheduling, Resourcing, Budgeting and Baselining

PLANNING

Set LifecycleAnd EstimateSet LifecycleAnd Estimate

• Incremental program

• 500 Function Points

• 10,000 Person Hours

• 12 Months

Effort, Mat, EVTfor each WP

Effort, Mat, EVTfor each WP

WP 1.1 Analysis

WP 1.2 Design

WP 1.3 Code & Test

Perform WorkClaim EV

Perform WorkClaim EV

MaintainPMB

MaintainPMB

Contract changes

Convert PPs to WPs

Distribute UB

Create WBS,OBS & RAM

Create WBS,OBS & RAM

WBS

OBS $$

$$

$$$$

$$$$$$

DevelopSchedulesDevelop

Schedules

1.1

1.2

1.3

Set thePMB

Set thePMB

121216162020

$24$24

22 44 66 88 1010 1212 1414 1616 18184488

TIMETIME2020

PV, EV, AC

Time

Dol

lars

Accum ActualsReport Perf

Accum ActualsReport Perf

TakeActionTake

Action

Reassign work

Prioritise resource

Address risk

AnalysePerformance

AnalysePerformance

1.0.9

1.1

“GO

OD

”“B

AD

”

1.2

.8

CPI

SPI

TIME

1.1

1.2

1.3

60%

Forecasts


SCOPE MANAGEMENTCOST MANAGEMENTSCHEDULE MANAGEMENT RISK MANAGEMENT HUMAN RESOURCE MANAGEMENTCOMMUNICATIONS MANAGEMENT

Interdisciplinary Relationship of Processes Initiatives

CONTRACT MANAGEMENTPOLITICAL MANAGEMENTRESOURCE ACQUISITION ++QUALITY MANAGEMENT

PROJECTMANAGEMENT (EVM)

TRAINING SUPPORTMAINTENANCE SUPPORTSUPPLY SUPPORTTRANSPORTATIONPHST

INTEGRATEDLOGISTICSSUPPORT

RELIABILITYAVAILABITYMAINTAINABILITYSUPPORTABILITYENGINEERING SUPPORT

REQUIREMENTS ENGINEERING SYSTEM ANALYSIS AND SYNTHESIS SYSTEM VERIFICATION AND VALIDATION CONFIGURATION MANAGEMENT EXTERNAL INTERFACE MANAGEMENT SPECIALITY ENGINEERING

(SAFETY, SECURITY, HUMAN ENGINEERING, EMC/EMI, TESTABILITY, PRODUCEABILTY)

SYSTEMSENGINEERING

++ RESOURCE ACQUISITION- Acquisition Planning & Management- Supplier Evaluation & Selection - Transition to Support

13


• ‘Non-recurring costs to implement a criteria-compliant system for the first time range from 2.5 to 4.0% (of the contract cost)’

• ‘The cost of EMS ranked third among the top ten cost drivers, and was estimated to be about 0.9 percent of the value added costs’

• ‘EVMS costs were in the areas of engineering/program management (65%) and finance (35%)’

• DOD working group estimated that EVMS cost can be reduced to 0.6percent of the value added costs (eg excessive documentation, excessive detail in the WBS, overuse of written variance analysis reports)

David S Christensen, The Costs and Benefits of the Earned Value Management Process, Acquisition Review Quarterly, Fall 1998

0.6% OF VALUE ADDED COSTS PER PROJECT


How much does it cost to implement?

2/13/2005Slide 26Copyright MTCA 2005

Process Improvement Business Case

• Benefits of Continuous Process Improvement– Improved understanding of how the organization develops

and delivers software-intensive systems– Increased control of costs, schedule & product quality

• Reduced development cycle time by reducing rework• Reduced schedule variance• Increased predictability and control of software and product quality• Enhanced risk management decisions based on quantitative data

– Improved environment for management and workforce• Ability to make cost-benefit tradeoffs of applicable technologies/processes• More time available to spend on problems requiring creative energy• People feel more empowered to propose process improvements for

organization-wide benefit

– More competitive organization– Satisfied customers

14


Source: Presentation by Joe Jarzombek, Lt Col, US Air Force Director, Embedded Computer Resources Support Improvement Program, Ogden Air Logistics Center, Hill AFB, Utah 17 Nov 99

Process Improvement Business Case

• Software Process Improvement (SPI)• Based on USAF AFMC ALCs’ Experience• SPI efforts quantifiably justify funding (based on several projects)

– Demonstrated Return on Investment of 4:1 - 19:1– Earlier detection of software defects from 22% - 90%– Reduction in post-release defects from 39% - 84%– Reduction in schedule time from 19% - 23%– Reduction in projected schedule variance down to 2%– Increased productivity (less rework) of 35% - 75%– Reduced sustainment costs by 30% - 55%

• Several programs have improved their capabilities based on the Software Capability Maturity Model (CMM);

– Enabled effective communication between separate business units;– Reporting improved customer satisfaction


Business Case for Process Improvement

• US Data & Analysis Center for Software (DACS) State-of-the-Art Report• Report Title - “A Business Case for Software Process Improvement -

Revised: Measuring Return on Investment (ROI) from Software Engineering and Management,” 30 Sep 99

• Internet URL for PDF copy - http://www.dacs.dtic.mil/techs/roispi2/• Report documents that many organisations have reported a 7:1 ROI• Report demonstrates that sound application of software engineering

methods provides a competitive edge and increases profitability:– Reduces development and maintenance costs– Reduces post-deployment defects; thus improves customer satisfaction – Reduces schedule cycle time by 30% - 40%– Increases products sales through higher quality software– Increases repeat business– Improves professional staff morale and retention (less overtime, less crisis, less

employee turnover with less need for retraining)

15


.

0 %

140%

-140%

....

.

..

. ...

..

. .

. . . .

.. . .

. .

.

.

. . . .. .. . . . . .... . . .. ..

. .. ..

.

..

. .. .. ...... . .. . ... . .. . .. ..

Without Historical Data With Historical DataVariance between + 20% to - 145% Variance between - 20% to + 20%

(Efforts = Labor Hours)

(Mostly Level 1 & 2) (Level 3)

Ove

r/Und

er P

erce

ntag

e

.

(Based on 120 projects in Boeing Information Systems)

.. . .

.

.. .

...

. .

. ..

.. .

..

.. .. . .. . . . . .. . . . . .. .

... . .. . . . . . .. . . .. . . . .

. . . . .. . . . .. . . . . .. . . . .. . . . . .

. . . . . .. . . . . . . .

. . .. . . . .

. . . . . . . . .

. . . . . .. . . . . .

. . . . . .

John Vu, Boeing, keynote talk at SEPG ‘97, “Software Process Improvement Journey (From Level 1 to Level 5)”

Software Estimates


15

10

5

0Ave

rage

Num

ber o

f Def

ects

/Klo

c

Level 1 Level 2 level 3


TimeJohn Vu, Boeing, keynote talk at SEPG ‘97, “Software Process Improvement Journey (From Level 1 to Level 5)”

Post-release Defects

16


Level 1 Level 2 level 3


Time

100

80

60

40

20

0

Ave

rage

Num

ber o

f Hou

rs

36% Faster

John Vu, Boeing, keynote talk at SEPG ‘97, “Software Process Improvement Journey (From Level 1 to Level 5)”

Cycle Time


100

75

50

25

0

1992 1993 1994 1995 1996

- 26%

- 38%

- 62%


- 12%

Reduced Staff Support per System = Increased Productivity

Increased Productivity

Perc

ent o

f Sta

ff Su

ppor

t per

Sys

tem

Level 1 Level 2 Level 3John Vu, Boeing, keynote talk at SEPG ‘97, “Software Process Improvement Journey (From Level 1 to Level 5)”

Productivity

17


But what about project cost growth?


1978 GAO REPORT ON USA WEAPONS

SYSTEM COST GROWTH

INFLATION

EST ERRORS

CHANGINGRQMTS

CHANGING REQUIREMENTS

49%

INFLATION31%

ESTIMATINGERRORS

20%

TOTAL COST GROWTH 47% (39% LESS INFLATION)

18


COST GROWTH TRENDS1978 - 1999 LESS INFLATION

• 1978 -147 MAJOR PROGRAMS

• 1991 - 183 MAJOR PROGRAMS

• 1999 - ALL MAJOR PROGRAMS

0%5%

10%15%20%25%30%35%40%

1978 1991 1999

LESSINFLATION


Perceived Need

Technology Software

Performance Management Framework

Technology

Leadership

Cultural Change

Product

Process Management(Progress)

TPMPSM

CMMsEVM

CPMPERT

BalancedScorecard

SixSigma FPA

RiskMgmt

ImplementationLeadership

DecisionLeadership

TechnologyLeadership

User Friendly

Training& Support

Change Mgmt

Value Added

Mgmt Involvement

PM3

Acceptability

Forecast & Feedback

Knowledge Rqmts

Process Disciplines&

Information Infrastructures

19


Track Record

• No statistics on success• Empirical Observations

– Any given implementation-• Substantial schedule delays• Substantial cost overruns• Fails to give management the kind of knowledge

they need or want– But, overall-dramatic organisational

improvements over time


Track Record- Common Reasons for Failure

• Failure to ascertain management information needs

• Lack of management support• Complexity• Failure to recognise cultural change issues

20


Lack of Management Support

• Lack of direction/unclear goals as in an emerging organisation

• "Get-on-with-it-itis”-it is simply viewed as unnecessary

• Management ego-technical superiority is all that is necessary (Heros)

• Lack of Skilled Resources or people with the desire to do it.

• Reactive management culture• Short term perspective rather than long term

investment


Track Record-Consequences of Failure

• Perpetuation of “business as usual”• Projects for which the systems are

designed continue to fall short of expectations

21


Earned Value Management Systems

• EVMS is Project Management with an Attitude!!!!!!

• Implementation has a measurable end point!!!!


The End Point

• Valid, reliable, timely data is being produced by the system

• The system becomes background management infrastructure

• Management uses the data

22



• Supply Chain– Performance Based Contracting Approach– Scalable Supplier Performance Management

Systems– 3rd Party Certification– wInsight


Seven Steps to Performance-Based Contracting*

*Reference: www.acqnet.gov/Library/OFPP/BestPractices/pbsc

23


Benefits of Performance-Based Acquisition

• Increased likelihood of meeting mission needs• Focus on intended results, not process• Better value and enhanced performance• Less performance risk• No detailed specification or process description needed• Contractor flexibility in proposing solution• Better competition: not just contractors, but solutions• Contractor buy-in and shared interests• Shared incentives permit innovation and cost effectiveness• Less likelihood of a successful protest• Surveillance: less frequent, more meaningful• Variety of solutions from which to choose


What is it?

• A collective responsibility that involves representatives from budget, technical, contracting, logistics, legal, and project offices.

• Involves a clear answer to three questions: – what do I need, – when do I need it, and – how do I know it's good when I get it?

• The challenge is to shift the paradigm from traditional "acquisition think" into:– collaborative performance-oriented teamwork– focus on program performance and improvement, – not simply contract compliance

24


Comprised of seven simple steps

1. Establish an integrated solutions team2. Describe the problem that needs solving3. Examine available solutions4. Develop a performance work statement (PWS) or

statement of objectives (SOO)5. Decide how to measure and manage

performance6. Select the right contractor7. Manage performance


Performance Based Contracting-A Different Mind Set

• Experience can result in a narrow view point

• The “right way” is the way we have always done it

• Results in a closed mind set• Open your mind to new ideas!

25


A Mind Test

• Count the "F”s in the following text:

–FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF YEARS


A Mind Test

• Count the "F”s in the following text:–1?–2?–3?–4?–5?–6?–7?

26


A Mind Test

• Count the "F”s in the following text: –FINISHED FILES ARE THE RESULT OF

YEARS OF SCIENTIFIC STUDY COMBINED

WITH THE EXPERIENCE OF YEARS


Scalable Performance Mgmt!Scalable Performance Mgmt!

CLOSE

REVISIONS AND DATA MAINTENANCEMaintain the Baseline

Take Management ActionANALYSIS AND MANAGEMENT REPORTS

Analyse Project Performance Data

Accumulate and Report Performance Data

CONTROL

ACCOUNTING CONSIDERATIONSAuthorise and Perform the WorkEXECUTE

Set the Performance Management Baseline

Assign Objective Measures of Performance

Develop Time-Phased BudgetPLANNING, SCHEDULING AND BUDGETING

Schedule the Work

Assign ResponsibilityORGANISATION

Decompose the Project Scope

PLAN

INITIATE

(32 Guidelines)(54 Requirements)(9 Knowledge Areas)5 Categories11 Steps5 Process Groups

ANSI/EIA 748&APM EVM GuidelinesAS4817-2003PMBOK 2000

27


The better business people

International EVMS International EVMS Assurance ServicesAssurance Services

(Project Performance Management program)


EVM Assurance Services

• Project Performance Management – using Earned Value principles

• The Standards - PMBOK, AS4817 and ANSI/EIA 748

• The benefits of compliance with EVM standards

• The introduction of independent assessment and certification services

28


PMI PMBOK RECOGNISES EVM AS ‘BEST PRACTICE’


•• Establishes a means to formally assess conformityEstablishes a means to formally assess conformity•• Provides the incentive to Provides the incentive to ‘‘take it seriouslytake it seriously’’ –– achieve a defined achieve a defined

outcomeoutcome•• Enables an organisation to declare its performance Enables an organisation to declare its performance

management competencymanagement competency•• Signifies management commitment to potential customers Signifies management commitment to potential customers •• Provides customers with greater confidence in project reportingProvides customers with greater confidence in project reporting•• An enabler for more open customerAn enabler for more open customer--client relationship (client relationship (egeg risk risk

share)share)•• Includes continuing surveillance to ensure enduring applicationIncludes continuing surveillance to ensure enduring application•• Provides a far greater probability of Provides a far greater probability of realisationrealisation of the benefitsof the benefits

Certification leads to enduring, realised benefits.A positive return for the investment!

Benefits of EVM certification

29


wInsight

Tool of choice for integrated performance management assessment and reporting around the would.

Aggregates data from disparate sources and locations

Interfaces with the vast majority of leading project management tools

Provides analysis in a normalised, real time manner


wInsight Product Range

wInsight Briefing Wizard

wIsight Administration Risk Plus

wInsight Web C/S Glue

wInsight Connect

30


• Where• United States (97.5%)• United Kingdom (.5%)• Australia (1.0%)• Other (1.0%)

• Who

• Industry

• Government

wInsight Users

• Numbers• Hundreds of Sites• Over 40,000 current

users• Types of Users

• Government (30%)• Aerospace Industry

(55%)• Other (15%)


Current European Clients

31


Earned Value Metrics


BaselineSchedule

CurrentSchedule

Drop-Dead Date

ConsecutiveSlips

32



Summary and Questions

• There are lessons to be learned out there ….

• There is growing evidence to support initiatives….

33


Any Questions ?

Thank You

Documents

A Business Case for EVM Process Discipline ...€¦ · Raytheon Australia RLM Systems Rockwell International Rockwell Systems Australia Rolls Royce, UK Rust Construction Services