An introduction to an effective earned value management system (EVMS) webinar series part 1, 29 September 2020
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The document introduces earned value management (EVM) as a collective process system that assists with informed decision-making in project management. It outlines common misconceptions about EVM, the importance of the performance measurement baseline, and distinguishes between project controls, EVM systems, and earned value analysis. The content is structured across three webinars aimed at clarifying EVM principles and practices, along with necessary attributes for effective implementation.
An introduction to an effective earned value management system (EVMS) webinar series part 1, 29 September 2020
- 1. An Introduction to an Effective Earned Value Management System By Scot Butcher & Martin Eveleigh 1
- 2. Webinar 1 of 3: Earned Value Building Blocks 2 Objectives. Introduce the concept that Earned Value Management is a ‘system of collective processes’ and That the metrics it provides are simply mathematical outputs to help support informed decisions
- 3. Introductions • Scot Butcher • 30 years working in defence acquisition and support • Started out life as a mechanical engineer but quickly moved to management of projects • Last 18 years have been spent in and around project controls • First experience of EVM was in 2003 • Experienced IBR participant and chair • Martin Eveleigh • 40+ years working in the Defence Sector both in the UK and USA • Mechanical/Electrical Engineer, but moved to Programme Management in 1993 • Author of a US DoD Validated Earned Value Management System Description (EVMSD) • Holds an MSc in Programme & Project Management • Experience in enabling and leading IBRs 3
- 4. Why these webinars? • There is clear confusion between Project Controls, Earned Value Management and Earned Value Analysis. • There is an acknowledged and widespread obsession with Earned Value metrics and its analysis without a firm understanding of the system required to underpin it. • There is a false belief that if you are planning discrete activities, that you can/are performing EVM • Therefore, these webinars are aimed at dispelling myths and advising what it takes to establish an appropriate, pragmatic Earned Value Management System 4SB
- 5. Content of the 3 webinars 1. Basics and myth busting: • Incessant ‘false focus’ - the Earned Value Management ‘Iceberg’. • The relationship between Project Controls (PC), Earned Value Management System (EVMS) and Earned Value Analysis (EVA). • The understanding and importance of the Performance Measurement Baseline (PMB). 2. What’s needed……..and importantly what’s not!: • Explain the attributes of an effective EVMS with/without compliance to EIA748. • Discuss were Earned Value Analysis is beneficial and where not! 3. Assurance reviews: • System Demonstration Review (SDR) • Surveillance Review (SR) • Integrated Baseline Review (IBR) • Annual Estimate at Completion Review (AEAC) 5SB
- 6. The Earned Value Iceberg 6SB • Incessant ‘false focus’ - the Earned Value Management ‘Iceberg’. • The relationship between Project Controls (PC), Earned Value Management System (EVMS) and Earned Value Analysis (EVA). • The understanding and importance of the Performance Measurement Baseline (PMB).
- 7. The Visible Iceberg Schedule Performance Index (SPI) Cost Performance Index (CPI) 7SB
- 8. The Invisible Iceberg! SPI CPI SV CV 1. You need to: Set up and continuously operate an effective Earned Value Management System 2. In order to: Enable accurate collection, correct interpretation and effectively use the data EAC BAC CPR TCPI ETC IEAC ACWP(AC) RAM EVT BCWP(EV) BCWS(PV) Obj%Complete WBS OBS PMB MR WP CA IBR CAM LoE 0/100 SDR Organisation Planning & Budgeting Accounting Revisions Analysis SB
- 9. Myth #1 Earned Value Management is all about calculating CPI & SPI 9SB
- 10. The biggest Myth of all! 10 ‘Project Controls and Earned Value Management are different’ ME • Incessant ‘false focus’ - the Earned Value Management ‘Iceberg’. • The relationship between Project Controls (PC), Earned Value Management System (EVMS) and Earned Value Analysis (EVA). • The understanding and importance of the Performance Measurement Baseline (PMB).
- 11. How does EVM/EVA reconcile with Project Controls? 11 Project Control System (PCS) Earned Value Management System (EVMS) Earned Value Analysis (EVA) People Process Data Tools Organisation Planning, Resourcing & Budgeting Change Control Analysis & Reporting Assurance Organisation Planning & Budgeting Accounting Analysis Revisions Material & Subcontract Mngt Surveillance Substantiating & Reporting Performance to-date Performance Prediction & Focus on Estimate to/at Complete Models, Guides & Advice Project Control System Description (PCSD) Earned Value Mngt System Description (EVMSD) ME
- 12. It’s all in the ‘Rules’! 12 Project Control System (PCS) Earned Value Management System (EVMS) • Common Elements/Processes • Common Role Players • Common Data Sets • Common Training • Common Tools • Common Assurance • Specific Compliance ME
- 13. Myth #2 Project Controls and Earned Value Management are different 13ME
- 14. Myth #3 An effective EVMS, by definition, needs to be 100% compliant with an industry standard* * Often EIA748 or APM Guidance 14ME
- 15. The Performance Measurement Baseline (PMB) 15SB • Incessant ‘false focus’ - the Earned Value Management ‘Iceberg’. • The relationship between Project Controls (PC), Earned Value Management System (EVMS) and Earned Value Analysis (EVA). • The understanding and importance of the Performance Measurement Baseline (PMB).
- 16. APM Definition of a Baseline 16SB The project baseline (often referred to as the performance measurement baseline or PMB) is an approved plan for the project, against which project performance is measured to facilitate management decision making and action. The setting of the baseline cannot be achieved until the scope is defined and agreed, as the baseline must encompass the entire project scope, schedule and cost. APM: Planning, Scheduling, Monitoring & Control Edition 1, 2015
- 17. APM Definition of a Baseline 17SB The project baseline (often referred to as the performance measurement baseline or PMB) is an approved plan for the project, against which project performance is measured to facilitate management decision making and action. The setting of the baseline cannot be achieved until the scope is defined and agreed, as the baseline must encompass the entire project scope, schedule and cost. APM: Planning, Scheduling, Monitoring & Control Edition 1, 2015
- 18. The Performance Measurement Baseline (PMB) • Aligned to Requirements • Estimated • Time-phased • Resourced • Substantiated • Agreed • Baselined • Change Controlled • Forecasted 18SB Project Control System (PCS) Earned Value Management System (EVMS) Earned Value Analysis (EVA) People Process Data Tools Organisation Planning, Resourcing& Budgeting Change Control Analysis & Reporting Assurance Organisation Planning & Budgeting Accounting Analysis Revisions Material & Subcontract Mngt Surveillance Substantiating & Reporting Performance to-date Performance Prediction & Focus on Estimate to/at Complete £100K £200K £300K £400K 1 2 3 4 5 6 7 8 9 10 11 12 BAC BCWS BCWP ACWP PMB
- 19. The Performance Measurement Baseline (PMB) Work Packages Planning Packages Control Account Budgets Distributed Budget (DB) Undistributed Budget (UB) Performance Measurement Baseline (PMB) Management Reserve (MR) Contract Budgeted Baseline (CBB) Profit Contract Price 19 Business Owned Project Owned Integrated Master Schedule (IMS) Cost & Schedule Alignment SB
- 20. Myth #4 Because I have a discrete schedule I am doing EVM 20SB
- 21. Myth #5 EVM will save my project…and any other project I deploy it on 21SB