Earned Value Management theory and its application on

Earned Value Management theory and its application on practice at CERN and JINR. Dmitry Kekelidze Software Engineer JINR – LIT/ CERN - GS-AIS

Agenda Ø EVMS concepts Ø NICA project Ø EVM web-based application

What is EVM? EVM is the project management tool. . . Are we there yet? How much longer before we’ve arrived? What can we do about it?

EVM is Ø performance measurement how am I doing against my baseline plan? Ø performance management what do I need to do to bring the project in on cost and schedule?

Example: making this presentation Ø Preparation • Research Topic • Decide on Structure Ø Make Slides • EVM Basics • EVM Advanced • NICA Intro • Conclusion Ø Finishing up • Trial Presentation • Implement Feedback

Project: making the presentation Research Presentation template Start slides EVM Basics EVM Advanced Agenda Conclusion NICA Intro Slides ready cost Reshuffle Dry run time

What is this mysterious Earned Value ? What is an honest measure for what is achieved?

Project: making the presentation Research Presentation template Start slides EVM Basics EVM Advanced Agenda Conclusion NICA Intro cost Slides ready Reshuffle Dry run time

EVM Concepts Main metrics : PV - Planned Value The portion of work expected to be completed at a given date, times the authorized budget allocated to carry out that work EV - Earned Value The value of completed work expressed in terms of the budget assigned to that work AC - Actual Cost The costs actually incurred and recorded in accomplishing the work performed

How is our project doing? $ Budget Planned Value Cost Actual Cost Achievement Earned Value now • Are we ahead or behind schedule? • Are you getting value for money? • Did you spend money on the right things? time

What happens? $ Planned Value Actual Cost Earned Value now Underspending but. . . time

What happens ? $ Planned Value Earned Value Actual Cost now Underspending but. . . time

EVM Concepts $ BAC: Budget At Complete PMR Project Management Reserve PV SV < 0 AC CV = EV – AC Cost Variance SV = EV – PV Schedule Variance EV project start now project end SV > 0 CV < 0 CV > 0 time

Earned Value: Cheat Sheet Schedule Variance SV = EV–PV In currency. Negative means delay Schedule Performance Index SPI = EV/PV < 1 means delay Cost Variance CV = EV-AC In currency. Negative means overcost. Cost Performance Index CPI = EV/AC < 1 means overcost Estimate At Completion EAC = BAC / CPI Forecast final cost To Complete Performance Index TCPIBAC = (BAC-EV)/(BACAC) Can we catch up?

Estimated Cost at Completion $ EAC now time

Benefits of EVM Ø Requires development of integrated baseline Results in better project definition and planning Ø Early identification of trends and problems Ø Accurate picture of project status Cost, schedule, and technical segregation of schedule and cost variances Ø Projection of final costs Ø Project control by the team Enables project manager to make informed decisions based on facts Ø Results in successful projects On time, on cost

Example: software development Requirement Architecture Design Code Testing 100 h 200 h 100 h

Example: execution plan Task Month 1 Requirements (100 h) S------F Architecture (100 h) Design (100 h) Code (200 h) Testing (100 h) Month 2 Month 3 Month 4 Month 5 Month 6 Status at end of Month 5 Complete, Spent 100 h S----PF Complete, Spent 120 h --F PS-S-PF Complete, Spent 125 h --F PS----S- 25% Complete, Spent 70 h -----PF PS---PF Not yet started

At the end of Calculation Month 5, what is? PV 100 + 200 Answer EV 100 + 50 350 h AC 100 + 125 + 70 415 h BAC CV 100 + 200 + 100 350 - 415 600 h -65 h CPI 350 / 415 84% SV 350 - 500 -150 h SPI 35, 000 / 50, 000 70% IEAC 600/0. 84 711 h TCPI (600 -350)/(600 -415) 135% 500 h

PMBOK

Terminology Ø WBS: Work Breakdown Structure, hierarchical list of all the activities to be performed to complete the project. Ø Workunits: The “Leaves” of the WBS tree. Activity small in size/duration, under responsibility of one person. Ø Workunits use Resources (money, people) to produce Deliverables

Where can EVM be Applied? EVM suitable for projects that have: • Clear definition of work scope • Project schedule range from a few months to many years • Small to very large cost

What is a large-scale project? • Technically complex and demanding, i. e. that cannot be fully specified in the frontend phase; • Long makespan: economic effects like inflation • Involving many contributors, contractors, suppliers. . . i. e. many activities that are outsourced, resultoriented.

Agenda Ø EVMS concepts Ø NICA project Ø EVM web-based application

NICA

NICA Is NICA large-scale project? Ø Work planned for period from year 2012 till 2017 Ø Estimated cost is more than 100 M $ Ø Tasks to complete: • General Infrastructure • Accelerator • MPD Detector Ø All the work have to be well coordinated

LHC Accelerator and Detectors

Project audit of 2001 § 18% overspend announcement … only § Technical Coordinator → “the project is behind schedule” § Project Administrator → “the project is under-running” § LHC Team: not is position to demonstrate that the project could be completed within allocated budget! Member States asked the LHC Project Management to set up a formal Project Control System

The key requirements §EVM-based project control system §Deliverable-oriented physical progress monitoring §Interfaced to accounting systems, to get accurate information on actual costs §Excel spreadsheets to interact with DBs §Web-based

Why a D-O EVMS? An activity of the project Activity not started Progress Activity half-wayalmost completed? done 0% Progress 50% Progress 90%! 90%-syndrome

Outcome of EVM experience… Ø Re-established trust • Cost and Schedule Review Committee: ‘world class’ • CERN management was formally congratulated by Member States • Further overruns were discussed in the context of proven project control. Ø Project culture at CERN and cost awareness of project engineers have improved.

Agenda Ø EVMS concepts Ø NICA project Ø EVM web-based application

Data Definition WBS Workunits Resources §Personnel §Material Deliverables • Web interface • Excel files

Collaborative tool Reminders for progress reporting

Dynamic Reports Ø Crosstab to drill drown through the WBS structure (or other dimension…) Ø PV, EV, AC Charts at every WBS level

Conclusion Ø Objectively measures performance of the project as it moves from project initiation through project closure. Ø Provides early warning of potential project adverse performance. Ø Shows Opportunity associated with positive schedule variance. Ø Enables the management of risk associated with underwriting or insuring against negative schedule variance. Ø Provides a means to forecast future performance based upon past performance.

Спасибо! Dmitry. Kekelidze@cern. ch Questions?