Creating Credible Plans, Integrating Reporting and Control Systems - Part 2
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The document outlines a credible plan for executing an integrated reporting and control system focused on earned value management (EVM) for program performance. It details the learning objectives, processes for comparing technical and programmatic progress, revising schedules and risk registers, and analyzing risks through Monte Carlo simulations. Continuous assessment and adjustment of performance measures are emphasized to ensure program success.
Creating Credible Plans, Integrating Reporting and Control Systems - Part 2
- 1. Executing the Credible Plan, Using an Integrated Reporting and Control System Part 2 EVM World 2016 Glen B. Alleman Agile Program Planning and Controls Prime PM [email protected] +1 303 241 9633 Thomas Coonce Cost Analysis and Research Division Institute for Defense Analyses [email protected] +1 703 575 6634 Rick Price Project Management & Planning Operations Principal Lockheed Martin Space Systems Company [email protected] +1 303 971 1826
- 2. 2 Learning Objectives • TLO #1 – the student will learn how to produce an integrated report of the Technical progress consistent with the Programmatic progress, detect variances, and suggest corrective actions. • TLO #2 – the student will understand how to objectively measure progress and use the performance to manage the program. • Earned Value Management is part of a Technical and Programmatic control system – Integrated risk, performance, effectiveness, technical and other measures provide leading indicators of program performance.
- 3. 3 In Part 1, we talked about … • The five core processes needed to produce a credible Performance Measurement Baseline (PMB). • How to use objective measures of progress and how to inform program performance with these measures. In Part 2, you’ll see how to execute the program with this information.
- 4. 4 Part 1 ‒ Inputs and Outputs for Building the Credible Performance Measurement Baseline • Customer Capabilities • Time phased budget • Desired completion date • Available technologies • Time phased resources • Reference Class Data • Programmatic and technical risks with probabilities and impacts • Historic uncertainties • Measures of Effectiveness • Measures of Performance • Work Breakdown Structure • Integrated Master Plan • Technical Performance Management Plan • Initial Integrated Master Schedule • Time Phased Staffing Plan • Schedule Reserve (Margin) • Management Reserve • Risk Register and Mitigation Plans • Adjusted Integrated Master Schedule • Risk Burn Down Plan Inputs Outputs
- 5. 5 Part 2 ‒ Executing the Credible Performance Measurement Baseline
- 6. 6 A Readable Version The Four processes needed to execute the credible PMB ❶ Compare Technical and Programmatic Actuals to Plan ❷ Compare BCWP and Cost and Schedule Performance Data with Management Reserve (MR) and Schedule Margin (SM) balances ❸ Revise Integrated Master Schedule (IMS) and Risk Register ❹ Run or Rerun Monte Carlo Simulations
- 7. 7 ❶ COMPARE PLANNED TO ACTUAL PERFORMANCE Compare technical and programmatic performance to the planned performance. Identify variances needed to make decisions about corrective actions to Keep the Program Green.
- 8. 8 Compare Planned to Actual Performance • Physical Percent Complete – Planned – Actual • Do this at the Work Package level – Quantifiable Backup Data – Avoid averaging out the variances at the Control Account level Objectively assess accomplishments at the Work Performance Level EIA-748-C, page 1
- 9. 9 Wright Brothers’ Technical, Cost and Schedule Progress 0.80 0.85 0.90 0.95 1.00 1.05 1.10 770 780 790 800 810 820 830 840 850 860 870 15-Feb-08 15-Mar-08 15-Apr-08 15-May-08 15-Jun-08 15-Jul-08 CPI/SPI Pounds WBs' 1908 Flyer Integrated Progress (2/28/1908) Upper Limit Planned Target Achieved SPI CPI Compare side-by-side the Technical Performance (Weight) with the Programmatic performance CPI and SPI
- 10. 10 ❷ COMPARE MR AND SM BALANCES Using the performance data and the variances, the computed BCWP from measures of Physical Percent Complete. Assess planned Management Reserve and Schedule Margin with the current MR and SM and inform EAC and ETC from past performance.
- 11. 11 Compare BCWP with MR and SM • With actual BCWP assess impact on Estimate at Completion and Estimate To Complete. • Assess planned Management Reserve against actual Management Reserve • Assess planned Schedule Margin against actual Schedule Margin • Assess planned risk burn down against actual Risk Burn Down
- 12. 12 Wright Brothers’ MR Planned Use vs Actuals $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 WB 1908 Flyer Planned vs Actual MR Use (15 May 1908) MR Planned Balance MR Actual Balance
- 13. 13 Schedule Margin in Final WB’s Flyer IMS
- 14. 14 Wright Brothers’ Schedule Margin Burn Planned Use vs Actuals In May, when the schedule margin went below plan, immediate corrective action is needed to get back on Schedule Margin Plan 0 2 4 6 8 10 12 15-Feb-08 15-Mar-08 15-Apr-08 15-May-08 15-Jun-08 15-Jul-08 15-Aug-08 15-Sep-08 Days WB 1908 Flyer Planned vs Actual Schedule Margin Use (15 May 1908) Schedule Margin Plan Balance Schedule Margin Actual Balance This dip is characterized as negative slack
- 15. 15 ❸ REVISE IMS AND RISK REGISTER With this data, update the Integrated Master Schedule and Risk levels in the Risk Register for future periods of performance.
- 16. 16 Revise IMS and Risk Register • Every reporting period update the Risk Register with actual assessment of – Reduced risks – Actual margin needed for unmitigated and irreducible risks • Adjust Risk Register contents for current assessments – New risks – Retired risks – Changes in risk attributes • Update ETC, EAC, and ECD with the statused IMS and Risk Register
- 17. 17 ❹ RUN AND RERUN THE SCHEDULE RISK ANALYSIS MONTE CARLO SIMULATIONS Schedule Risk Analysis (per DI-MGMT-81861A) at periodic intervals to ensure acceptable confidence levels for the Estimate to Complete (ETC), Estimate at Completion, and the Estimated Completion Date (ECD).
- 18. 18 Run and Rerun Schedule Risk Analysis Monte Carlo Simulations • With updated Risk Register – rerun the Schedule Risk Analysis Monte Carlo Simulations • Reassess confidence levels of EAC, ETC, and ECD • Determine sensitivity indices (which elements are most likely to cause the forward plan to go awry) • If needed – Replan IMS, e.g., change logic, and/or possibly with add more schedule margin – Add resources – Adjust technical solution
- 19. 19 Summary • Cost and Schedule performance informed by Technical Performance – At IBR Technical Performance plan defines the work activities in the IMS • Build a risk adjusted PMB – Reducible and irreducible risks in the risk register, traceable to the IMS. • Budget active mitigation activities • Protect unmitigated risks with Management Reserve and Schedule Margin • Confirm programmatic data validity with Technical Performance Data • Perform these activities continually during execution to Keep the Program Green