1 Getting Value out of Earned Value (EV) Presented by Tom Arnez, PMP

2 What You Will Learn How to choose the right parts of EV to keep it manageable. How to ensure EV doesn’t overwhelm your scheduler and team. How to set-up the EV construct in an Excel spreadsheet that is easily update from your existing MS Project data. How to present EV data to management that makes sense to them.

3 How is the Project Doing? Discussion Point How would you rate the current condition of the project from 5- Terrific to 1- Dismal? Why? What other things does this chart reveal about the project? What does the Schedule Variance (SV) of ($64K - $344K = -$280K) tell us? What does the Schedule Performance Index (SPI) of $64K/$344K = 0.19 tell us?

4 How Does The Future of the Project Look? Discussion Point How would you rate the future prospect of the project from 5- Terrific to 1- Bleak? Why? If the project performs as it has in the past (SPI = 0.19), when will the project end? If the project can return to the pace of the Baseline (SPI= 1.0) when will the project end? What would you expect the PM to talk about to help you believe the “Planned” line is possible? Today

5 It All Starts with Defining What You Want!

6 Define What You Care About- The Traditional Work Breakdown Structure (WBS) Discussion Points Phases are typically incorporated into each of the lower WBS elements. Easy to keep Management, Technical, and Contract elements sorted out. Each WBS tier mostly overlaps throughout the project’s life cycle. More challenging to wrap your arms around the things that really matter?

7 Define What You Care About (The Macro View of building value into the WBS) Discussion Points: The WBS is developed in a phased approach, almost like multiple mini projects. Because WBS elements are stand-alone products, they can be paid for upon completion. Thus the term Pay Point. Value is determined in terms of benefit, not just a pile of documents (e.g. PP1 is an operational project office with all the tools, processes, plans, and staffing needed to embark on building and deploying a successful solution) There is some overlap between Pay Points but it is minimized. Project Office Infrastructure Solution Delivery Contract Closure Overall Project Value Pay Point 1Pay Point 2 Pay Point 3

8 Establishing Value for the Project Discussion Point Apart from the actual cost of producing each WBS element, how would you expect value be assessed between each of the pay point elements? Why? –33% -> 33% -> 33% –25% -> 50% -> 25% –15% -> 75% -> 10% –10% -> 85% -> 5% Project Office Infrastructure Solution Delivery Contract Closure Overall Project Value Pay Point 1 (PP1)Pay Point 2 (PP2)Pay Point 3 (PP3)

9 For Example Suppose We Assess Value at 15% - 75% - 10% Discussion Point –Do you agree or disagree that value does not always equate to Labor or dollars? –Do you agree or disagree that value can be based on tangibles or intangibles? –Why is it possible that your client’s values are not what you value? –The challenge is to agree on the basis for establishing “Value” before implementing Earned Value methodologies. Project Office Infrastructure Solution Delivery Contract Closure Overall Project Value Pay Point 1 (PP1) = $147,090 Pay Point 2 (PP2) = $735,450 Pay Point 3 (PP3) = $98,060 $980,600 (15 Months)

10 Define What You Care About (The Micro View of Value) Discussion Point If the Pay Point establishes the macro value, what establishes value at the lower elements? What would be the basis for establishing “value” of deliverables? When would the use of partial value on deliverables make sense? Project Office Infrastructure Solution Delivery Contract Closure Overall Project Value Pay Point 1Pay Point 2 Pay Point 3

11 Custom Gantt Chart Views/Tables The Creation Custom Pick Lists The Design Entry View Baseline View EV Tracking View Labor/ Cost View EV Milestone?DeliverablePay Point Custom Excel Spreadsheet Deliverable List Worksheet Value Worksheet Dates Worksheet Tracking Worksheet Pivot Worksheet Chart Worksheet Baseline Create the WBS Build the Schedule Resource the tasks $ Time EV Summary Value Decision The Maintaining Re-schedule tasks Progress tasks Add new tasks SOW Deliverables List

12 Build Good Processes Discussion Point How do you handle repetitive/recurring deliverables like Meetings? Can you still use the “Submitted” / “Approved” value weighting? Don’t Forget Assign a deliverable to every task from the “Deliverable” pick list (that you created) Assign a Pay Point to every task from the “Pay Point” pick list (that you created) Designate the “Submitted” and “Approved” Milestones with a “Yes” from the “EV Milestone?” pick list (which you created) Make sure that Pay Point elements don’t overlap too much. Think of Pay Points as mini-projects that run in series. Tip: Filter on deliverables that cross Pay Points…it will help in preventing overlapping.

13 Capture Milestone dates for EV Tracking Cut and Paste From…MS Project..to MS Excel Discussion Point: This step takes place weekly and is used to update the “planned” and “actual” completion of EV Milestones.

14 Before Graphing Data, Create an EV Lookup Table Discussion Point: This table is necessary to relate earned value to the designated EV milestones as they are scheduled over time. It’s literally a lookup table to give the right amount of credit when it is actually earned. PP1 PP2 PP3

15 Create EV Pivot Tables

16 Generating the EV Charts

17 Parting Thoughts Build consensus on how “value” is defined. Build the WBS around this “value” construct. Keep it simple. Start with schedule metrics. The “actual cost” data is time consuming to capture. Don’t pick too many EV Milestones…there is a price to pay in collecting good metrics. Think of easy ways to port data from MS Project with simple cut- and-paste techniques and creative MS Project Views/Tables Automate the generation of the EV Charts by adding the power of pivot tables to your PM arsenal. A good picture say a thousand words- even more when your talking about money! Management wants to know: “How’s the Project Doing?” and “How does the Future of the Project Look?” EV will back up your words with credibility and not mere PM lip service.