Downloaded 15 times
Uploaded byDr Ezzat Mansour
The Earned Value Matutity Management Model
The document introduces the Earned Value Management Maturity Model (EVM3), which defines five levels of earned value management (EVM) process maturity. Level 1 indicates an initial, ad hoc implementation, while Level 5 represents an optimizing process where improvements are continuously measured and implemented. The EVM3 provides organizations a framework to assess their current EVM process and prioritize improvements to increase maturity.
More Related Content
Similar to The Earned Value Matutity Management Model
The Earned Value Matutity Management Model
- 1. ©MMII Management Technologies TheEarned Value Management Maturity Model® (EVM3®) Ray W. Stratton Management Technologies [email protected] The Earned Value Management Maturity Model, and EVM3 are registered trademarks of Management Technologies. Integrated Project Management Conference Tysons Corner, Virginia 2002
- 2. ©MMII Management Technologies DoesThis Sound Familiar? • “Our SPI and CPI looks good, but we know we have schedule and cost problems” • “The SPI was 1.0, but we couldn’t ship the product on time!” • “I’d like to do Earned Value but I don’t know where to start.” • We’re spending a fortune on Earned Value, I just don’t see an ROI.” • “Our customer asked if our Earned Value data was good. I didn’t know what to say.”
- 3. ©MMII Management Technologies TheValue of a Maturity Model • A list of tasks to meet industry standards • A priority of tasks sorted into levels of difficulty • A roadmap for organizations to use to improve processes • A process measurement tool to evaluate current processes and prioritize improvement efforts
- 4. ©MMII Management Technologies Characteristicsof Common Staged Maturity Models • Level 1 - ad hoc; limited, isolated, random success • Level 2 – simplified project/team usage • Level 3 - organization-wide usage and direction • Level 4 - quantify process performance • Level 5 - quantitatively improve process
- 5. ©MMII Management Technologies TheEarned Value Management Maturity Model® Monitoring the efforts to improve the Earned Value Management system Managing the quality of the EVM data ANSI 748 compliant, organization-wide Less than fully compliant with ANSI 748, limited project use No or limited EVM implementation in place Levels provide foundations for continuous improvement of EVMS Level 4 Managed Level 1 Initial Level 2 Localized Level 5 Optimizing Level 3 ANSI 748 Compliant
- 6. ©MMII Management Technologies Attributesof Level 1 – INITIAL • No or limited EVM implementation in place • A defined starting point for an initial implementation
- 7. ©MMII Management Technologies Attributesof Level 2 - LOCALIZED • Simplified EVM implementation • Less than fully compliant with ANSI 748 • May be sufficient for smaller projects • May meet organizational needs • Consistent with a modest investment in EVMS • Provides valuable project insight • Gets people familiar with Earned Value concepts • Can help architect a fully integrated Earned Value system
- 8. ©MMII Management Technologies Attributesof Level 3 – ANSI 748 COMPLIANT(+) • An ANSI/EIA 748 compliant implementation • Organizational policy (System Description) • Organization wide • EVMS organizational repository • EVMS training program • Earned Value Process Group (EVPG)
- 9. ©MMII Management Technologies Attributesof Level 4 - MEASURED • Introduces metrics for measuring EVMS processes • Measures the quality of EVM data Levels 2-3 measure the project execution process Level 4 measures the Earned Value Management process • Requires a technical baseline for technical work • Adjusts Earned Value (BCWP) per a technical baseline and technical variance
- 10. ©MMII Management Technologies Attributesof Level 5 - OPTIMIZING • Planning and tracking improvement of the Earned Value Management System • Defect prevention is planned • Defect causes are determined, prioritized,and reduced
- 11. ©MMII Management Technologies Categorieswithin EVM3 • EIA 748 defines five Categories of Earned Value Guidelines • Provides the implementation areas for EVM3® Levels 2 and 3 – ORGANIZATION – PLANNING, SCHEDULING, and BUDGETING – ACCOUNTING – ANALYSIS and MANAGEMENT REPORTS – REVISIONS and DATA MAINTENANCE
- 12. ©MMII Management Technologies Level1 - Characteristics & Processes • There are no expectations at this level • Some individuals may try EVMS • Management does not encourage its use • Lack of project planning may preclude meaningful use of Earned Value
- 13. ©MMII Management Technologies Exampleof the Level 1 Organization • Earned Value Management is applied by zealots • Pockets of Earned Value Management deep with projects • No project wide roll-up • Cost and schedule variance discussed in traditional non-Earned Value terms • Management is unfamiliar or unsupportive of Earned Value
- 14. ©MMII Management Technologies Level2 - Characteristics • Use of a WBS • Plan and schedule the scope • Budget cost accounts to functions or products • Maintain a baseline (i.e., control changes) • Monitor the project, forecast outcome from Flemming and Koppleman “Earned Value Project Management” 1996
- 15. ©MMII Management Technologies Level2 - Processes • Use of a WBS (2.1a) • Who does the work (2.1b) • Use a time-phased budget (2.2c) • Use control accounts and work packages (2.2 d/e) • Work packages add to account budget (2.2f) • Record costs like they’re budgeted (2.3a) • Compute variances (2.4a) • Analyze variances (2.4b) • Act upon Earned Value data (2.4e) • Maintain baseline, revise as authorized (2.5a) • Retain revision history (2.5b) • No unauthorized baseline changes (2.5d) • Document baseline changes (2.5e) Parentheses refer to EIA 748 sections
- 16. ©MMII Management Technologies Exampleof the Level 2 Organization • Management supports limited implementation • Limited investment (use of Excel vs. commercial tools) • Selected projects and management staff are trained on Earned Value principles • Earned Value data is used in reporting and decision making • Financial system may not be integrated with Earned Value (use of staff-hours versus dollars)
- 17. ©MMII Management Technologies Level3 - Characteristics & Processes • Meets all ANSI/EIA 748 Guidelines……. – Organization (5) – Planning, Scheduling, Budgeting (10) – Accounting (8, including subheadings) – Analysis and Management Reports (8, includes subheadings) – Revisions and Data Maintenance (5) • EVMS is applied uniformly throughout the organization via a “Systems Description” or similar document • Training program funded • EVPG exists • An Earned Value library exists
- 18. ©MMII Management Technologies Exampleof the Level 3 Organization • All guidelines of ANSI/EIA 748 met • Employees receive training on Earned Value principles and its implementation • System Description approved, issued, used, and a “change request” process exists • System Description is tailored by projects, reviewed, and approved • EVPG addresses changes and tailoring • Retention of best practices, lessons learned, past project data is centralized • Standardization of Earned Value Management tools
- 19. ©MMII Management Technologies Level4 Characteristics • Organization has EVMS process metrics • Notional samples – Consistency (value of work packages) – Complexity (WBS fan-out) – Workload (work packages per CAM, manager, etc.) – Data latency (days from accounting to reporting) – Baseline stability (number of replans per ……) – Value of re-plan (significance to baseline) – Correctness (number of retroactive accounting changes) – Sensitivity (when EVMS data first indicated final outcome) – Percent LOE content
- 20. ©MMII Management Technologies LevelOf Detail Metric NUMBER OF COST ACCOUNT PACKAGES VALUE UNDER REPORTING OVER REPORTING NOMINAL $ 0 . . . . . . . . NUMBER OF WORK PACKAGES 1-5 6-10 11-15 16-20 GOAL
- 21. ©MMII Management Technologies Accuracyand Latency Metric ADJUSTMENT DELAY (DAYS) QUANTITY (NOT VALUE) 30 60 90 120 150 180 BCWP ACWP
- 22. ©MMII Management Technologies DataLatency Metric REPORT DATE OR NUMBER LATENCY (WEEKS) 0 1 2 3 4 WP BCWP WP ACWP EV REPORT 1 2 3 4 5 6 7 8 9 10
- 23. ©MMII Management Technologies PlanningPackage Lead Time Metric PLANNING PACKAGE DETAIL PLANNING LEAD TIME (DAYS) NUMBER OF PLANS PROMOTED FROM PLANNING PACKAGE 30 60 90 120 150 180
- 24. ©MMII Management Technologies Level4 Processes • Data on EVMS is collected periodically • Trends are monitored • Management is advised periodically – positive and negative trends – cost of EVMS – data accuracy – data latency – accuracy of EVMS projections • EVMS Improvement Plans are developed by EVPG
- 25. ©MMII Management Technologies Exampleof the Level 4 Organization • An EVMS metrics collection effort is underway • Independent from project Earned Value performance data • Periodic reports on the trends of data are provided • Recommendations for improvement are documented • Known problem areas are identified
- 26. ©MMII Management Technologies Level5 Characteristics • Organization has EVMS Improvement Plans in place • Process engineering is funded to implement improvements in EVMS • Improved processes are injected into new projects • Metrics are collected • Planned versus achieved improvements are compared • Improvement plans are revised as needed • EVMS process data is continually analyzed for further improvements
- 27. ©MMII Management Technologies Level5 Processes • Plans are published for improving their EVMS • Projects are facilitated in using new procedures • Budgets and schedule are defined for improvements
- 28. ©MMII Management Technologies Exampleof the Level 5 Organization • EVMS is under constant improvement • Improvement are uniquely budgeted and uniquely staffed (EVPG) • Earned Value data is made more accurate • Earned Value data is more timely • Less and less effort is spent in executing the EVMS • EVMS historical data is used in estimating new work, decision analysis parameters, simulations, etc. • Data is used for project planning
- 29. ©MMII Management Technologies MappingEIA 748 to EVM3® • ANSI 748 Categories and EVM3 are related LEVEL 1 2 3 4 5 ORGANIZATION X- X X X PLANNING, SCHEDULING, BUDGETING X- X X X ACCOUNTING X- X X X ANALYSIS AND REPORTING X- X X X REVISIONS AND DATA MAINTENANCE X- X X X PROCESS METRICS X X PROCESS IMPROVEMENT X
- 30. ©MMII Management Technologies EVM3Goes Beyond ANSI 748 • EVMS Training • Earned Value Process Group (EVPG) • Earned Value Repository • Earned Value Process Metrics • Earned Value Process Improvement
- 31. ©MMII Management Technologies TheCorporate and Stockholder Payoff • Higher EVM3® should be a corporate goal • Like ISO 9000, raises stockholder and analysts’ perception of company health • Can increase business • Can help manage more business with current assets • Good Earned Value Management data is becoming a core metric for Wall Street corporate financial statements regarding future investments and revenues
- 32. ©MMII Management Technologies NextSteps • EVM3® recognition by industry and government • Internal EVM3® assessments – where are we good? – where are we weak? – what are our next steps? • External formal EVM3® evaluations – independent EVMS process review – determination of your EVM3 Level? – contractor or teammate qualification
- 33. ©MMII Management Technologies TheGoal • Knowing how mature your organization is in implementing EVMS • Knowing how mature your contractors or suppliers are in EVMS • Being able to state your EVM3® Level to your customers EVMS measures the health of a project.. ….but what is the health of the EVMS?
- 34. ©MMII Management Technologies Assessments •Self assessment – Use the EVM3 as a checklist – Deep knowledge of internal practices – Lack of objectivity or benchmarks • External Assessment (Recommended) – Mix of external and internal assessors – Retains depth of internal practices – Adds objectivity and benchmark data – Formalized report and plan of action
- 35. ©MMII Management Technologies Obtainingthe EVM3® • It’s free! • It’s 35 pages • It’s downloadable (pdf) – www.mgmt-technologies.com
- 36. ©MMII Management Technologies LegalStuff.. • The Earned Value Management Maturity Model® and the abbreviation EVM3® are trademarks of Management Technologies and registered in the U.S. Patent and Trademark Office. Use of the term EVM3 shall refer to this document in its entirety. • Special permission to use Key Practices of the Capability Maturity Model® for Software, Version 1.1, CMU/SEI-93-TR-25, and Capability Maturity Model® for Software, Version 1.1, CMU/SEI-93-TR-24, © 1993 by Carnegie Mellon University in The Earned Value Management Maturity Model® is granted by the Software Engineering Institute. • Capability Maturity Model® and CMM® are registered in the U.S. Patent and Trademark Office. • Management Technologies owns the exclusive right, title, and interest in and to The Earned Value Management Maturity Model (EVM3) and any derivative works based upon the EVM3 created by any party. • CMM, Capability Maturity Model, Capability Maturity Modeling are registered in the U.S. Patent and Trademark Office. CMMI; CMM Integration are service marks of Carnegie Mellon University. SW - CMM, SE - CMM, CMMI, P-CMM, and SA - CMM are trademarks and/or service marks of the Carnegie Mellon University