steve wake earned value sets you free
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Steve WakeEarned Value Sets You Free
maybe.
What do we all want our projects to do?
SUCCEED!
How many projects failin the uk?
What is a project failure?
Who has the influence?
Politics is the art of the possible.And so is project management.Focus on what you can influence.
14
StakeholdersEnablersDisablers
Who is?
SponsorCompetitionCustomerProject ManagerChampionHealth and SafetyRival team
Remember this from PMI Portugal 2003?
What can we do?
Pay attentionThis is the only slide with any practical
advice!
Project Management nearly always appears on the WBS.It is normally shown as level of effort (NVA)
RENAME that WBS box “COMMUNICATIONS”.Define them as with any other deliverable.Place these communications on the schedule.And Project Manage them.The reason we communicate poorly is because it’s not in
the plan!
Can I go home now?
What makes a successful project?
Widespread agreement that it is a success
What is the reality of Consensus?
What is success for us?
Realisation of the benefits.Financial and/or Social.Commonly agreed.Even if you are not a beneficiary.
How do we do this with projects?
We clearly define the benefits.
primeiro
segundoWe Program the changes requiredto achieve the benefits.
terceiroWe clearly define the projects needed to achieve the changes.
What have I just described?
The Problem with P3
• We just don’t do it!(properly).• Projects are created without reference to
benefit.• Portfolios do not retain their dynamic links with
the projects they created.• The Board and senior management just look at
the Portfolio and assume the links with the project are there.
The Result is project failure
Lots of effort. No result.
Portfolios today are generally houses built on sand,and that is why projects continue to fail.
We live in a world where we accept this as normal behaviour
We lie or cheat to win business
We have to decide who we are
or
We must become Professional
In English Professional can mean ,Someone who acts with integrity.Someone who is mercenary and cynical.
Integrity 1
Integrity 2
Integrity 3
Interestingly for leaders
We have to become trusted for the accuracy and reliability of the data under our control.ThenManagement can manage.
But always remember…
there are some you can never trust!
What is Project Management?
Cost Time ScopeQualityTo Budget
What is the best project management
can do?
Status
•It tells us where we are•How much we’ve done
How do we work out where we are?
What if we can’t?
•Build a plan•Freeze the plan•Measure progress
1. DEFINE THE WORK SCOPE
2. SCHEDULE THE WORK
3. ALLOCATE BUDGETS TO SCHEDULE
EVM: Performance Measurement Baseline
100
40
60
80
PMB
PMB
TIME
£
CONTRACT BUDGET BASE
MR
0
500
1000
1500
2000
2500
3000
J F M A M J J A S O N D J F M A M J J A S O N D J F
Actual Costs
Budget (Plan) Reporting Cut-off Date
Where are we?
?
Total Project Budget
•Build a plan and baseline it.
•Calculate physical progress
Physical progress
•How much do I want to spend?•How much have I spent?•What have I got to show for it?
0
500
1000
1500
2000
2500
3000
J F M A M J J A S O N D J F M A M J J A S O N D J F
Work Performed (Earned Value)
Actual Costs
Budget (Plan)Reporting Cut-off Date
Cost Variance
Schedule Variance(Currency)
What does this tell us?
Total Project Budget
• I planned to spend £1300• I spent £1500• I’ve achieved £1100• I am completing 73p of work for every £1 planned.• It is costing me £1.36 to earn £1of work.
The Earned Value line
• Is an additional line• Tracks physical completeness. What has been done.• It should not be treated as a discretionary add-on.• It is not possible to manage a project well without it.• And yet some project managers say they don’t need
earned value.
Earned Value is the best way to determine the status of a project.And yet….
If you don’t know where you are.
How do you manage?
If a portfolio manager does not know the true status of the projects which drive the portfolio.
Is this OK?
Earned Value sets you free
Because• With poor status data your job is to fix and defend the
data.• With good status data you and your stakeholders can
make good solid management decisions.• Earned value is not a miracle but it does make good
managers better.
EVOr notEV?
Conclusion
• If project managers focus on becoming professionals with integrity they will always be part of the solution.
• Earned Value status provides the firm foundations portfolios need for effective delivery of benefits.
• If project managers remain ‘pragmatic’ then projects will continue to fail at 73%. And project managers along with their stakeholders will continue to perpetuate the mess this planet and its macro economy is in now and for the foreseeable future.
May 2014
swprojects@blueyonder.co.uk
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