Agile Earned Value Project Management
…dogs and cats living together… MASS HYSTERIA! – Dr. Peter Venkman
No, it’s true! Earned Value Management techniques can work with non-traditional project management methodologies, including Agile, Critical Chain, and Lean PM.
Today at a Sioux Empire PMI Chapter meeting here in Sioux Falls, SD I mentioned to the group that I had written a post on using EVM with Agile, linkinng to a great white paper on the topic. Well, I tried to find it, and I couldn’t. Now where did I put that blog post…I know it’s around here somewhere!
At any rate, here’s a new post with the link I promised (just for you Kurt!). This is the best paper I’ve seen on using Earned Value Management in conjunction with Agile Project Management. If you are looking for a killer Agile Project Management blog, check out Mike’s Leading Answers blog. It’s also in the links on the pmStudent.com home page.
This paper is very short and sweet, right to the point. It does a great job of relaying the concepts with a good dash of visuals thrown in. After you’ve finished reviewing it, post a comment here and let’s discuss!
Agile and Earned Value Reporting, Anthony Cabri, and Mike Griffiths of Quadrus Development Inc.
Update: Be sure to check out Glen’s comment, where he links us to another great whitepaper, Making Agile Development Work in a Government Contracting Environment. Thanks a ton Glen!
Related posts:
{ 16 comments… read them below or add one }
I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts.
I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts.
Thanks Sue, I appreciate it!
Thanks Sue, I appreciate it!
Josh,
While it is true you *can* use Earned Value Management techniques with agile projects, the real question is, why would you want to? Earned Value Management has nothing to do with earning value. It is more appropriately named Incurred Cost Management. Why do I make a big deal about the name, because it is measuring the wrong thing. Agile teams (well, teams in general actually) should be more concerned about outcome – how much business value have we delivered to the organization – as opposed to output – which is what EVM techniques measure.
The only place where using EVM would not be a total waste of time is when the organization in which you are working requires it – in which case you ask the people requesting it to indicate its importance against everything else the project team has to do, and then try to find out why they want EVM, and see if there is a more appropriate way to provide that information.
Josh,
While it is true you *can* use Earned Value Management techniques with agile projects, the real question is, why would you want to? Earned Value Management has nothing to do with earning value. It is more appropriately named Incurred Cost Management. Why do I make a big deal about the name, because it is measuring the wrong thing. Agile teams (well, teams in general actually) should be more concerned about outcome – how much business value have we delivered to the organization – as opposed to output – which is what EVM techniques measure.
The only place where using EVM would not be a total waste of time is when the organization in which you are working requires it – in which case you ask the people requesting it to indicate its importance against everything else the project team has to do, and then try to find out why they want EVM, and see if there is a more appropriate way to provide that information.
Thanks for the comment Kent! On my project, EVM is a requirement levied by the federal government for our contract, which is precisely why I would want to find a way to use Agile with EVM.
I’ve written on some of my criticisms of EVM before, such as its blindness to the critical path. That said, it does have the ability to highlight issues where scheduled work is not being done on time or is costing more or less than originally estimated. Some of the practices built in to EVM force rigor into understanding why estimates were wrong, and some good tools for forecasting costs based on current performance. I think a particular strength is the ability to roll up data from multiple project levels. We have 3 levels of contractors working for one government agency working for another government agency, and it seems to be a decent way to roll up total project costs on something so huge.
If I didn’t have to use EVM as a requirement, I would probably elect to use some of the techniques I’ve learned because they are good for any project, even small ones. I agree, however, that the bulk of formal processes might be better served using other techniques, especially if you are working on a project that is only a few years in duration and less than a hundred people working for different companies and agencies.
If you can convince NASA or the USGS of a better way, I wouldn’t be against it if it works well!
Thanks for the comment Kent! On my project, EVM is a requirement levied by the federal government for our contract, which is precisely why I would want to find a way to use Agile with EVM.
I’ve written on some of my criticisms of EVM before, such as its blindness to the critical path. That said, it does have the ability to highlight issues where scheduled work is not being done on time or is costing more or less than originally estimated. Some of the practices built in to EVM force rigor into understanding why estimates were wrong, and some good tools for forecasting costs based on current performance. I think a particular strength is the ability to roll up data from multiple project levels. We have 3 levels of contractors working for one government agency working for another government agency, and it seems to be a decent way to roll up total project costs on something so huge.
If I didn’t have to use EVM as a requirement, I would probably elect to use some of the techniques I’ve learned because they are good for any project, even small ones. I agree, however, that the bulk of formal processes might be better served using other techniques, especially if you are working on a project that is only a few years in duration and less than a hundred people working for different companies and agencies.
If you can convince NASA or the USGS of a better way, I wouldn’t be against it if it works well!
Josh,
Here’s a paper on EV and XP-like processes
http://www.niwotridge.com/PDFs/ADC%20Final.pdf
This is the approach we used in a large Department of Energy program, where “agile” in the form of adapted XP was embedded in a full 748B EV system for the entire program.
Kent McDonald’s comments miss he mark by a long distance.
1. EV does in fact measure “value” delivered. Please see the current book and articles on Performance Based Earned Value http://www.pb-ev.com. Here in defense the BCWP aspects of the produced deliverables from each workpackage are dollarized measures of the incresing maturity of the products – in this case manned spacecraft avionics systems.
2. The very notion that EV shodl be used only when mandated smells of inexperience or lack of understanding, or possibly both. Our multi-billion program down to several 100,000 program all benefit from measuring physical percent compplete as a function of the cost of producing that physical percent complete against the planned cost for the same – at the time of assesment. No agile method ansers the question – at what effeciency are the deliverables being produced. This is a fundamental failing of the “burn down” charts of agile.
3. When Kent mentions outcomes, at what sunk cost versus what planned cost was that outcome produced. That’s called BCWP.
Kepp up the good work.
Glen B. Alleman
VP, Program Planning and Controls
Denver, Colorado
Josh,
Here’s a paper on EV and XP-like processes
http://www.niwotridge.com/PDFs/ADC%20Final.pdf
This is the approach we used in a large Department of Energy program, where “agile” in the form of adapted XP was embedded in a full 748B EV system for the entire program.
Kent McDonald’s comments miss he mark by a long distance.
1. EV does in fact measure “value” delivered. Please see the current book and articles on Performance Based Earned Value http://www.pb-ev.com. Here in defense the BCWP aspects of the produced deliverables from each workpackage are dollarized measures of the incresing maturity of the products – in this case manned spacecraft avionics systems.
2. The very notion that EV shodl be used only when mandated smells of inexperience or lack of understanding, or possibly both. Our multi-billion program down to several 100,000 program all benefit from measuring physical percent compplete as a function of the cost of producing that physical percent complete against the planned cost for the same – at the time of assesment. No agile method ansers the question – at what effeciency are the deliverables being produced. This is a fundamental failing of the “burn down” charts of agile.
3. When Kent mentions outcomes, at what sunk cost versus what planned cost was that outcome produced. That’s called BCWP.
Kepp up the good work.
Glen B. Alleman
VP, Program Planning and Controls
Denver, Colorado
Thanks Glen! I updated the post with your link. I have a few individuals working in government contracts right now just like I am, and I am going to forward this to them because I know they’ll find it useful.
Thanks again!
Thanks Glen! I updated the post with your link. I have a few individuals working in government contracts right now just like I am, and I am going to forward this to them because I know they’ll find it useful.
Thanks again!
Dan Rawsthorne has good information on Agile EVM and Scrum. Here are the articles:
http://danube.com/whitepaper/calculating_earned_business_value_scrum_agile
http://danube.com/whitepaper/agile_scrum_EarnedValueMetrics
Tamara also has a good white paper on this stuff that builds off of Dans stuff here:
http://www.agilejournal.com/index2.php?option=com_content&do_pdf=1&id=210
Dan Rawsthorne has good information on Agile EVM and Scrum. Here are the articles:
http://danube.com/whitepaper/calculating_earned_business_value_scrum_agile
http://danube.com/whitepaper/agile_scrum_EarnedValueMetrics
Tamara also has a good white paper on this stuff that builds off of Dans stuff here:
http://www.agilejournal.com/index2.php?option=com_content&do_pdf=1&id=210
Hi Josh et al,
Not sure if Anthony and Mike are contractors but I have yet to see ANY contractor who doesn’t use some form of Earned Value (“value for money”) as a core part of their billing process.
The problem illustrated by Kent’s comments is that EVM is perceived to be a cost management tool. This is only partly true. Used correctly and appropriately, (especially from the contractors perspective, but also the owner as well), it is a CASH FLOW MANAGEMENT tool- linking expenses to revenues. (in the case of the contractor) and linking expenses to funding (in the case of the owner)
AACE, in their Skills and Knowledge of Cost Engineering, 5th Edition, https://www.aacei.org/PortalTools/Shopper/ProductDetail.cfm?ProdCompanyPassed=1&ProdCdPassed=1-1545-02 has published several different approaches to monitoring Earned Value under conditions of uncertainty. (Chapters 14-16)
Bottom line- IF we can move beyond looking at EVM as a cost and time monitoring tool and start to look at it in terms of a cash flow management tool, it becomes a whole lot less BUREAUCRATIC BURDEN and a lot more of a practicle tool we use on a daily basis to make management decisions.
BR,
Dr. PDG, in Boston
http://www.getpmcertified.com
Hi Josh et al,
Not sure if Anthony and Mike are contractors but I have yet to see ANY contractor who doesn’t use some form of Earned Value (“value for money”) as a core part of their billing process.
The problem illustrated by Kent’s comments is that EVM is perceived to be a cost management tool. This is only partly true. Used correctly and appropriately, (especially from the contractors perspective, but also the owner as well), it is a CASH FLOW MANAGEMENT tool- linking expenses to revenues. (in the case of the contractor) and linking expenses to funding (in the case of the owner)
AACE, in their Skills and Knowledge of Cost Engineering, 5th Edition, https://www.aacei.org/PortalTools/Shopper/ProductDetail.cfm?ProdCompanyPassed=1&ProdCdPassed=1-1545-02 has published several different approaches to monitoring Earned Value under conditions of uncertainty. (Chapters 14-16)
Bottom line- IF we can move beyond looking at EVM as a cost and time monitoring tool and start to look at it in terms of a cash flow management tool, it becomes a whole lot less BUREAUCRATIC BURDEN and a lot more of a practicle tool we use on a daily basis to make management decisions.
BR,
Dr. PDG, in Boston
http://www.getpmcertified.com