Critical Chain Earned Value Management (CCEVM)

12 Jan 2007 - 11:30 PM under Critical Chain | Posted by PMStudent

I had a discussion tonight with my great friend Chad that got my brain spinning again about Critical Chain and EVM. My notes are not available right now for me to reference, but I wanted to throw out some of the major concepts and challenges I’ve run into thus far.

First, the question is why bother? Well, I really believe in Critical Chain and TOC concepts, but I think there’s too much entrenched thinking out there for it to be adopted by any organizations other than those who are very innovative and have a culture that embraces positive change. For instance, I’ve heard that most government contracts require EVM reporting, and many private organizations also require it. That kills a lot of possible change to CCPM right there.

I believe that most CCPM enthusiasts are trying to introduce it as necessitating the discard of existing paradigms completely and immediately. (EVM for example) Such a dramatic shift is next to impossible for any organization with a critical mass of bureaucracy, and subsequent lack of innovative capacity. I suggest that a more gradual shift for these entities is the appropriate course of action. I’m not saying it can’t be done the other way, I know of several examples where it seems to me the entity was very bureaucratic, but since I don’t have personal experience with those companies/agencies I can only speculate.

My goal is to figure out a way to use CCPM to run a project while still using EVM metrics in a useful way, without having to go back and re-baseline the schedule using a traditional critical path approach. Some software packages do exactly this, but I would argue the results of this EVM analysis are not linked to the way the project is managed. The pitfall here is that if traditional EVM is the reporting framework the project is measured on, it will become the driver of how the project is managed. My problem with that is that a project team can work on non-critical tasks when they really should be focusing on critical chain tasks instead, just so they can meet their EVM numbers and pretend they are on schedule. This directly conflicts with the whole concept of CCPM.

So, some rough requirements off the top of my head:
1. Use CCPM methods to schedule and manage the project
2. Modify CCPM methods to incorporate cost buffer management.
3. Use CCPM cost and schedule buffer utilization to formulate meaningful metrics for schedule and cost performance that are EVM in language and intent, and tied directly to Critical Path performance.
4. Ensure CCEVM reporting is useful not only for external project stakeholders, but also adds clear value for the project manager and team. It’s crucial that CCEVM makes sense for all parties.
5. CCEVM must be formulated in such a way that organizations who require EVM on projects are able to accept CCEVM metrics after a reasonable evaluation effort.

Some of the paths I can already see:
1. I’ve created some formulas to calculate feeder and project buffer sizes for schedule and cost based on some specific new information that will be required from the risk management phase.
2. I can see how adding some more statistical information to the CCEVM metrics will help make the data more useful, showing how the aggregate uncertainty decreases as a project progresses.
3. Modification of the traditional CCPM fever chart analysis to incorporate the aggregate uncertainty for various stages throughout a project.

Last but not least, I need to figure out a way to do all this without creating analysis paralysis and having to hire someone extra just to sort all this out!!!

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