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EVMS Fundamentals

v.7.0 (Part 1 of 2)

Slides and Notes

Course Outline

Introduction to EVMS Fundamentals01A. Basic EVMS Definitions01B. EVMS Concepts

Organizations02A. Organizational Planning02B. Functional Organizations02C. Project Organizations02D. Matrix Organizations02E. Organizational Responsibilities

Work Breakdown Structure03A. WBS Concepts03B. Control Accounts03C. WBS Development

Baseline Development04A. Budget Development04B. The Performance Measurement Baseline

Project Schedules05A. The EVMS Schedule05B. Project Scheduling and EVMS05C. Integrated Master Plan, Integrated Master Schedule

Cost and Schedule Integration06A. Data Integration Requirements06B. Consequences of Poor Data Integration06C. Integrating Cost and Schedule Data

EVMS Fundamentals v.7.0 (Part 1)

Copyright 2013 The CBT Workshop, All Rights Reserved 1

Introduction to EVMSBasic EVMS Definitions (1A)

Course Objectives

• This course represents a basic introduction to EVMS (Earned Value Management Systems) fundamentals.

What is EVMS?

• EVMS is a collection of tools, policies, and procedures that work together to help the project team manage complex projects.

• A project is temporary, unique and generates a product or service.

EVMS l b d t th l l A i• EVMS can also be used at the program level. A program is a group of interrelated projects.



What is EVMS?

• EVMS includes three key concepts:- Actual Costs (ACWP)

- Earned Value (BCWP)

- Planned Value (BCWS)( )

• ACWP, BCWP and BCWS are used to generate:

- BCWP/BCWS = SPI e.g.: 80/100 = 0.8

- BCWP/ACWP = CPI e.g.: 80/160= 0.5

• CPI and SPI are some of the tools used to manage cost and schedule on a project.

Basic EVMS Definitions

• You have just completed the topic on Basic EVMS Definitions.

Introduction to EVMSEVMS Concepts (1B)



Why Use EVMS?

• EVMS is project management applied in a disciplined manner.

• Integrates cost, schedule and technical aspects of a project.

• Provides accurate monthly or weekly status reports.

• Provides early warning of project problems.

The EVMS Concept

This Course

• This course is comprised of 32 topics that are key to the understanding of EVMS.



Topic Conclusion

• You have just completed the EVMS Concepts topic.

OrganizationsOrganizational Planning (2A)

Organizational Roles in Program Management

• Before a project can start, the performing organization needs to organize to complete the project.

• The performing organization must assign a project manager, who is accountable for the success of the project.p j



Organizational Roles in Program Management

• The Project Manager selects project team members.

• Team members are usually experts in the areas of engineering, operations, manufacturing, quality, finance, scheduling and logistics.g

Types of Organizations

• Functional Organizations.

• Projectized Organizations.

• Matrix Organizations.

Organizational Planning

• You have just completed the Organizational Planning topic.



OrganizationsFunctional Organizations (2B)

Typical Functional Organization

Functional Organizations

• Advantages of adopting a functional organization.– Familiarity of the team.

– Established administrative system.

– Staff availability.y

– Scheduling efficiency.

– Clear authority.




• Disadvantages of functional organizations.– Project isolation.

– Limited resources.

– Bureaucratic procedures.p

– Lack of project focus.

– Department orientation.

– Duplication of effort.


• You have just completed the topic on Functional Organizations.

OrganizationsProject Organizations (2C)



Typical Project Organization

Project Oriented Organizations

• Advantages of project oriented organizations.– Clear project authority.

– Simplified project communications.

– Access to special expertise.p p

– Project focus and priority.


• Disadvantages of project oriented organizations.– Duplication of efforts.

– Unclear loyalties and motivations.

– Intra-company rivalry.p y y

– Uncertain reintegration of resources.




• Disadvantages of project oriented organizations.– Duplication of efforts.

– Unclear loyalties and motivations.

– Intra-company rivalry.p y y

– Uncertain reintegration of resources.

– Difficulty in retaining functional expertise.


• You have just completed the topic on Project Organizations.

OrganizationsMatrix Organizations (2D)



Typical Matrix Organization

Matrix Organizations

• Advantages of matrix organizations.– Clear project focus.

– Flexible staffing.

– Adaptability to management needs and skills.p y g

– Staff development opportunities.


• Potential disadvantages of matrix organizations.– Built in conflicts.

– Complex command and authority relationships.

– Complex employee recognition systems.p p y g y




• You have just completed the topic on Matrix Organizations.

OrganizationsOrganizational Responsibilities (2E)

Organizational Responsibilities

• Managers throughout the organization are held responsible for specified work on each program.

• The nature of this relationship is often depicted on a responsibility assignment matrix grid.g g

• This matrix fuses the company/project organization with a project’s work breakdown structure to ensure that all required work is assigned to a responsible manager.



Organizational Responsibilities

• You have just completed the Organizational Responsibilities topic.

Work Breakdown StructureWBS Concepts (3A)

• The Work Breakdown Structure (WBS) and other tools allow the project manager to manage the scope of a project.

• The Organizational Breakdown structure (OBS) prepares an organization to manage projects.

Work Breakdown Structure

g g p j



Work Breakdown Structure

• WBS is a deliverable oriented picture of project components.

• Defines what is, and what is not, within the scope of the project.

• The WBS is used to communicate with the customer.

WBS for Aircraft System

WBS Concepts

• You have just completed the topic on WBS Concepts.



Work Breakdown StructureControl Accounts (3B)

Control Accounts

• The Department of Defense uses a number of standard, three level WBS structures.

• The CWBS often extends the WBS three or four levels of additional detail.

• Usually, more levels of detail are required to manage a complex project.

• “Control Accounts” represent the level of the CWBS at which work is planned, monitored, and controlled.

• A WBS Dictionary contains descriptions of the nature of work for each WBS element.

Work Breakdown Structure and Control Accounts



Control Accounts

• Every Control Account is assigned to a Control Account Manager (CAM).

W k P k d Pl i• Work Packages and Planning Packages are subsets of Control Accounts.

Control Accounts

• You have just completed the topic on Control Accounts.

Work Breakdown StructureWBS Development (3C)



• Work Packages are established by the Control Account Manager (CAM) and are typically segregated by performing organization.

• Work Packages typically represent “near term” effort, and are either measurable or level of effort.

Work Packages

Planning Packages

• Planning Packages represent “far term” effort.

• Eventually all Planning Packages are planned in detail and become Work Packages.

Control Accounts



• The WBS is a method by which the program work content can be broken down into meaningful segments/levels.

• The broadest work scope starts at the top (Level One) and tiers down to the lowest level of work scope detail (Level 5 or 6 in most


p (cases).

• Each level may share a common function (ie. Program Phase, Major Deliverables or Components, etc.)

• The WBS should extend as far as necessary to manage the project.


p j

Responsibility Assignment Matrix

The Responsibility Assignment Matrix (RAM), forges the relationship between the WBS and Organizational Breakdown Structure (OBS).



Summary

• The WBS is a graphic portrayal of the project.

• Each lower level WBS element represents an increasingly detailed description of the project elements.

• “Control Accounts” ensure that all of the work is planned,Control Accounts ensure that all of the work is planned, monitored, and controlled.

• The RAM links the project WBS and the organization structure.

WBS Development

• You have just completed the topic on WBS Development.

Baseline DevelopmentBudget Development (4A)



Budget Development

• The Performance Measurement Baseline (PMB).

• Each CAM will receive a budget that is part of the total budget.

• There are many components to a total project budget, including direct and indirect costs.direct and indirect costs.

Budget Development

Budgeting Requirements

• The Project Manager develops the Project Directive (PD) and asks the CAMs to develop a Control Account Plan (CAP) for each of their control accounts.

• The Project Manager will then review and approve the CAPs.j g pp

• Control Account Plans become the basis for control accounts.

• Control Accounts must contain a discrete statement of work, a schedule, and an authorized budget.



Budget Development

• You have just completed the Budget Development topic.

Baseline DevelopmentThe Performance Measurement Baseline (4B)

• Basis upon which to measure performance.PMB = Distributed Budget + Undistributed Budget

• Control accounts contain all Distributed Budgets.

The Performance Measurement Baseline (PMB)



Baseline Planning

• Control Account Plans (CAPs) contain a list of work packages.

• Develop work packages for work scope beginning in one to several months.

• Establish separate work packages for each cost element (e.g.Establish separate work packages for each cost element (e.g. Labor, Material, Subcontract).

• Align tasks and milestones with project schedules.

• Assign the earned value method which best suits the work scope.

Baseline Planning

• Budget “far term” work scope in planning packages.

• Not practical to define budget, schedule, and all detail tasks at the beginning of the contract.

• Rolling Wave Planning is the continuous process of converting long-term planning into detailed near-term planning.

Rolling Wave Planning

Total Program

Major Milestones

Control Acct / Work Pkg.

Control Acct / Work Pkg.

Control Acct / Planning Pkg.





Modifying the PMB

• Several reasons for changing the PMB.External

– Contract Modifications.

Internal

– Convert Undistributed Budget to Distributed.

– Apply Management Reserve.

– Replanning.

– Convert Planning Package to Work Package(s)

Contract Changes

Internal Replanning



Management Reserve

Program Logs

• Program Logs document all changes to Distributed Budget, Management Reserve, and Undistributed Budget.

• Distributed Budget changes are tracked at the Control Account level.

Summary

• The process of baseline development provides a “yardstick” from which performance against plan may be measured.

• Control accounts must contain a discrete statement of work, a schedule, and an authorized budget.g

• Rolling Wave planning facilitates baseline development.

• Changes to the Baseline must be documented in a Baseline Change Log.



The PMB

• You have just completed the Performance Measurement Baseline topic.

Project SchedulesThe EVMS Schedule (5A)

The EVMS Schedule

• Project schedule overview – Integrated Master Schedule (IMS).

• Identify program milestones, summary, and detail tasks.

• Schedules represent a graphic depiction of sequential work flow.

• Duration is typically associated with tasks• Duration is typically associated with tasks.



The EVMS Schedule

• Develop the schedule.

• Schedules determine critical and near-critical tasks and activities..

• Required resources may be applied to tasks.

Project Schedules (IMS) vs. WBS

• Project Schedules are not a substitute for managing by WBS.

• Unique attributes of a WBS.

Project Schedules (IMS) vs. WBS

• Unique attributes of project schedules:– Define precedence of tasks and activities.

– Determine critical path and near-critical path(s) and associated tasks. .

– Provide revised completion date estimates based on statusing of work p gin process.

– Allow for a process called “resource leveling”.



The EVMS Schedule

• You have just completed the topic on The EVMS Schedule.

Project SchedulesProject Scheduling and EVMS (5B)

• Project schedules displayed as Gantt charts.

• Tasks are represented by bars, while milestones are typically represented by triangles or diamonds.

• The diagram below depicts three tasks, ordered by precedence

Graphic Depiction of Schedules

g p , y pwith “finish to start” relationships.

Task A

Task C

Task B



• Sometimes dependencies incorporate “Lag”.

T k A

5 DayLag


Task A

Task B

Task C

• Project schedules displayed as Network diagrams.

• Tasks are represented by boxes, while dependencies between tasks are represented by lines or arrows.

• The diagram below depicts three tasks, ordered by precedence


The diagram below depicts three tasks, ordered by precedence with “finish to start” relationships.

• A network diagram may have hundreds or thousands of “paths”. The longest path (depicted in red) is the critical path.

• The critical path impacts the project completion date.

• The critical path has no “float”, whereas non-critical paths have


p , pfloat or additional non-critical time, and do not impact the project completion date.



Project Scheduling & EVMS

• Specific project scheduling requirements are imposed within earned value management systems.

• Typically, three levels of detail with respect to schedules are required:q– Master Schedules.

– Intermediate Schedules.

– Detail Schedules.

• Both horizontal and vertical traceability within and between schedules must be demonstrated.

Project Scheduling & EVMS

• Identify key program milestones on the master schedule.

• The intermediate schedule is the link between the master schedule and the control account.

• Detail schedules are used by CAMs to manage their controlDetail schedules are used by CAMs to manage their control accounts and work packages.

Project Scheduling Summary

• Project schedules serve a different purpose from work breakdown structures.

• Key benefits of project schedules:– Identification of critical path.p

– Precedence based depiction of tasks.

– Resource leveling capability.

– Revised completion date estimates based on status.

• The use of project schedules in an EVMS environment is not an option.



Project Scheduling and EVMS

• You have just completed the topic on Project Scheduling and EVMS.

Project SchedulesIntegrated Master Plan & Integrated Master Schedule (5C)

IMP & IMS

• Event based management method.

• Used during the entire acquisition process.

• Documents and communicates the key events in a program.



Integrated Master Plan (IMP)

• Event based plan.

• Documents significant accomplishments required to complete the work.

• Defines required accomplishments in a hierarchical structureDefines required accomplishments in a hierarchical structure leading to higher level events.

• Ties each accomplishment to a key program event.

IMP Purpose

• Provides a systematic approach to planning, scheduling and execution.

• During Source Selection, used to evaluate:– Proposed approach.p pp

– Offeror’s management/planning capability.

– Assess risk of offeror’s approach.

• After Contract Award, used to:– Baseline key events.

– Assess and control ongoing progress.

– As the basis for incentives.

IMP Application

• Request requires an Integrated Master Plan.

• Offeror proposes a complete IMP.

• Proposed IMP becomes part of contract at award:– IMP has sufficient detail to manage programIMP has sufficient detail to manage program.

– Level of detail linked to risk assessments.

• IMP is managed contractually after award:– Details below contractual level are managed by the contractor.

• Review IMP/IMS as regular part of program management.



IMP Features

• The IMP is the foundation for the IMS.

• Key Events – Accomplishments to meet technical and contract requirements:– Initiation and conclusion of major program activities.j p g

– Decision-points relating system maturity with continued system development & Key Interface points.

• Significant Accomplishment:– A specified result/event that indicates a level of design maturity.

– A discrete step in a planned development.

– Demonstrates that the design and production of products are proceeding.

• The contractor’s IMP integrates with the subcontractor’s IMP.

IMP Outline

• Introduction:– Program Overview.

– Assumptions and ground rules.

– Program Organization discussion.g g

• Events, Accomplishments, Criteria:– Numbering system used.

– Event definition with accomplishment completion criteria.

– Cross reference to WBS.

IMP Outline (cont’d)

• Narratives:– An optional section.

– Task or process narrative.

– Risk discussion.

• Glossary:– An action verb dictionary.



Integrated Master Schedule (IMS)

• IMS is an integrated, logically driven network-based schedule that is vertically and horizontally traceable.

• IMS shall be traceable to the:– IMP events and accomplishments and supports each accomplishment p pp p

closure criteria.

– Organizational Breakdown Structure (OBS).

– WBS and Statement of Work (SOW).

– Control Accounts.

Integrated Master Schedule (IMS)

• WBS in the IMS shall be consistent with the Format 1 WBS as applicable.

• IMS shall contain contractual milestones and display summary, intermediate and detailed schedules.

• IMS shall include fields and data that enable access to the information by product and organizational lines.

• IMS shall contain all calendars that define working and nonworking time periods.

IMS Purpose

• Provides details behind program planning:– Used in source selection evaluation.

– Used for tracking and statusing during program execution.

• Tool used to demonstrate progress:Tool used to demonstrate progress:– Linked to WBS, control accounts, work packages, and incentives.

– Performance oriented.



IMS Highlights

• Requires use of a computerized scheduling tool.

• Calendar based, to track task progression.

• IMS tasks detail the required effort to achieve each IMP event.

N t k h d l h t i t d iti l th• Network schedule shows constraints and critical path.

Single Numbering System

• Integrates the IMP and the IMS.

• Cross-referenced to the WBS and SOW.

• All tools reference the same work tasks.

• Cross-references the management tools and parts of contract• Cross-references the management tools and parts of contract.

Advantages of the IMP & IMS

• This approach provides a consistent method to integrate scheduling with EVM.

• The IMP/IMS causes an event driven, performance based scheduling approach.g pp

• The IMP/IMS and EVM provide an integrated performance based management toolset.



IMP & IMS Conclusion

You have just completed the topic on Integrated Master Plan & Integrated Master Schedule.

Cost and Schedule IntegrationData Integration Requirements (6A)

The Requirement

• The EVMS guidelines requires the integration of the following systems:– Scheduling.

– WBS based Budgeting, Earned Value and Actual Costs.

• Data must be consistent between all software applications that comprise an EVMS toolkit.



• Identify cost impact of schedule changes.

• Maintain realistic manpower profiles.

• Synchronize a program’s ETC with updated project schedules.

• Consistent management reporting data

The Benefits of Cost & Schedule Integration

• Consistent management reporting data.

• Allows for the full capabilities of EVMS.

Cost & Schedule Data Integration

• You have just completed the topic on Data Integration Requirements.

Cost and Schedule IntegrationConsequences of Poor Data Integration (6B)



• Difficult integrated baseline review (IBR).

• Incorrect or unsupported ETC/EAC values.

• Inconsistent management reporting data.

• Inefficiencies in material and subcontract management

Consequences For Lack of Cost and Schedule Integration

• Inefficiencies in material and subcontract management.

• Leaves the program with no single tool for program control.

The Requirements

• A set of policies, procedures, and tools that support EVMS.• Integrated tools:

– Scheduling.– Accounting.– Cost Management (Budget, Earned Value, Actual).– Procurement.– Estimating.– Data Transition utilities as needed.

The Requirement

• You have just completed the topic on Consequences of Poor Data Integration.



Cost and Schedule IntegrationIntegrating Cost and Schedule Data (6C)

Integrating Data Between Tools

Establishing a Strategy

• Which tools need to be integrated.

• Identifying data to be integrated.

• Maintaining data integrity on a continual basis.

• Assigning responsible personnel• Assigning responsible personnel.



Methods For Integrating Cost and Schedule Data

Summary

• The EVMS guidelines require the integration of the WBS, and accounting, scheduling, budgeting, and procurement systems.

• Allows for the full capabilities of EVMS.

• Difficult IBR’s may result if no integration exists.Difficult IBR s may result if no integration exists.

• Challenges:– The lack of a single off the shelf tool.

– The integration of data from multiple tools.

Integrating Data

• You have just completed the topic on Integrating Cost and Schedule Data.