Applying Earned Value Management to Software Intensive Programs Part 3

April 17, 2009 · Filed Under General  - 0 Comment(s)

For paper with figures see Applying Earned Value Management To Software Intensive Programs Final

 

Applying Performance-Based Earned Value (PBEV)

 

Performance-Based Earned Value® (PBEV) is an enhancement to the Earned Value Management Systems (EVMS) standard[1]. PBEV overcomes the standard’s shortcomings with regard to measuring technical performance and quality (quality gap). PBEV  is based on standards and models for systems engineering, software engineering, and project management that emphasize quality. The distinguishing feature of PBEV is its focus on the customer requirements. PBEV provides principles and guidance for cost effective processes that specify the most effective measures of cost, schedule, and product quality performance.

 

Program managers expect accurate reporting of integrated cost, schedule, and technical performance when the supplier’s EVMS procedure complies with the EVMS Standard.  However, EVM data will be reliable and accurate only if the following occurs:

·         The indicated quality of the evolving product is measured.

·         The right base measures of technical performance are selected.

·         Progress is objectively assessed.

 

Using EVM also incurs significant costs. However, if you are measuring the wrong things or not measuring the right way, than EVM may be more costly to administer and may provide less management value[2]. 

 

Because of the  quality gap in the EVMS standard,  there is no assurance the reported earned value (EV) is based on product metrics and on the evolving product quality.  First, the EVMS standard states that

EV is a measurement of the quantity of work accomplished and that the quality and technical content of work performed are controlled by other processes. A software manager should ensure that EV is also a measurement of the product quality and technical maturity of the evolving work products instead of just the quantity of work accomplished.  Second, the EVMS principles address only the project work scope. EVMS ignores the product scope and product requirements.  Third, the EVMS standard does not require precise, quantifiable measures of progress. It states that objective EV methods are preferred but it also states that management assessment (subjective) may be used. In contrast, other standards specify objective measurement. Fourth, EVM is perceived to be a risk management tool. However, EVMS was not designed to manage risk and provides no guidance on the subject. 

 

PBEV is a set of principles and guidelines that specify the most effective measures of cost, schedule, and product quality performance. It has several characteristics that distinguish it from traditional EVMS:

·         Plan is driven by product quality requirements.

·         Focuses on technical maturity and quality, in addition to work.

·         Focuses on progress toward meeting success criteria of technical reviews.

·         Adheres to standards and models for systems engineering, software engineering, and project management.

·         Provides smart work package planning.

·         Enables insightful variance analysis.

·         Ensures a lean and cost-effective approach.

·         Enables scalable scope and complexity depending on risk.

·         Integrates risk management activities with the performance measurement baseline.

·         Integrates risk management outcomes with the Estimate at Completion.

 

PBEV augments EVMS with four additional principles and 16 additional guidelines.

 

The following are PBEV principles that set it apart from EVMS:

1.      Product Scope and Quality. Integrate product scope and quality requirements into the performance measurement baseline.

2.      Product Quality Requirements.  Specify performance toward satisfying product quality requirements as a base measure of earned value.

3.      Measuring Quality. Integrate risk management with EVM.

4.      Evolutionary Acquisition. Tailor the application of PBEV according to the risk.

 

Figure 4, EVMS and PBEV Flow Chart, overlays the “Performance- Based” process flow on the traditional “Earned Value” process flow.[3]

 

PBEV supplements traditional EVMS with the best practices.  Its principles and guidelines enable true integration of project cost, schedule, and technical performance.  The distinguishing feature of PBEV is its focus on the customer requirements.  Measures of product scope and product quality are incorporated into the project plan. Progress is measured against a plan to fulfill all customer requirements. Measuring the wrong things does not dilute management attention. Consequently, management is able to take rapid corrective actions on deviations that threaten customer satisfaction and business enterprise objectives.

 

 

Figure 4, EVMS and PBEV Flow Chart

 

[1] American National Standards Institute. “Earned Value Management Systems.” (ANSI)/EIA-748-A-1998. Apr. 1998. Reaffirmed 28 Aug. 2002.

[2] Solomon, Paul J. “Integrating Systems Engineering With Earned Value Management.” PMI Measurable News, Fall, 2008 and Defense AT&L May/June 2004:42  Links at www.PB-EV.com, Advanced EV:PBEV tab..

[3]  Page 17, Solomon, Paul and Young, Ralph, “Performance-Based Earned Value®“,,Hoboken, NJ:Wiley & Sons, 2007.

This article was originally published in the Software Tech News, Volume 12, No. 1, April 2009.  The web site for more information about this publication is www.softwaretechnews.com


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