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PS0406 EVM Maturity Model - EVM3, Stratton

The document discusses the evolution and levels of earned value management systems. It describes the five levels of the Earned Value Management Maturity Model, from initial implementation at level 1 to optimizing processes at level 5. The document also maps the model levels to the categories defined by ANSI/EIA standard 748.
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0% found this document useful (0 votes)
51 views

PS0406 EVM Maturity Model - EVM3, Stratton

The document discusses the evolution and levels of earned value management systems. It describes the five levels of the Earned Value Management Maturity Model, from initial implementation at level 1 to optimizing processes at level 5. The document also maps the model levels to the categories defined by ANSI/EIA standard 748.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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The Earned Value Management Maturity

®
Model (EMV3®)

Ray W. Stratton, Management Technologies


[email protected]

CPM Spring Conference 2001


San Diego, May 2001

The Earned Value Management Maturity Model, and EVM3 are


registered trademarks of Management Technologies.

©MMI Management Technologies Ray Stratton - 1


In the beginning……..

• Cost/Schedule Control Systems Criteria (C/SCSC)


• US DoD Standard
• Validation (Are the criteria met?)
– “Good for life”
– Performed by DoD customer
– Engineering and Production separately validated
– Reviewed ‘first use’ of C/SCSC
• “Validation” a prerequisite to bid for “C/SCSC
required” work
• Subsequent Application Review (SAR, are you using
your Validated system correctly on this effort?)

©MMI Management Technologies Ray Stratton - 2


The Evolution

• Non-DoD US agencies adopt Earned Value as a


“best practice”
– Apply DoD standard to non-DoD work
• Non-US governments adopt Earned Value
– Create national standard from DoD principles
• Non-government (private industry) adopts Earned
Value
– Uses selected sections of the C/SCSC standard
• US DoD moves away from DoD unique specifications
and standards

©MMI Management Technologies Ray Stratton - 3


Today

• EIA/ANSI 748-98 , May 1998, “Earned Value


Management Systems”
• Industry use, Government use, Non-US use
• What we gained - An international standard defining
a robust, capable, Earned Value Management
System
• Integrated Baseline Review (IBR)
• What we lost - a recognized validation process
• What we never had - a methodology to grow a robust
Earned Value Management system

©MMI Management Technologies Ray Stratton - 4


The Value of a Maturity Model

• A list of tasks to meet industry standards


• A priority of tasks sorted into levels of difficulty
• A roadmap for organizations to use to improve
processes
• A process measurement tool to evaluate current
processes and prioritize improvement efforts

©MMI Management Technologies Ray Stratton - 5


Characteristics of Common
Staged Maturity Models

• Level 1 - ad hoc; limited, isolated, random success


• Level 2 - project/team usage
• Level 3 - organization-wide usage and direction
• Level 4 - quantify process performance
• Level 5 - quantitatively improve process

©MMI Management Technologies Ray Stratton - 6


The Earned Value Management
Maturity Model®

Levels provide foundations for continuous improvement of EVMS

Monitoring the efforts to improve the Level 5


Earned Value Management system Optimizing

Managing the quality Level 4


of the EVM data Managed

ANSI 748 compliant, Level 3


organization-wide ANSI 748 Compliant

Less than fully compliant Level 2


with ANSI 748, limited project use Localized

Level 1
No or limited EVM
Initial
implementation in place

©MMI Management Technologies Ray Stratton - 7


Attributes of Level 1 - INITIAL

• No or limited EVM implementation in place


• A defined starting point for an initial implementation

©MMI Management Technologies Ray Stratton - 8


Attributes of Level 2 -
LOCALIZED

• Simplified EVM implementation


• Less than fully compliant with ANSI 748
• May be sufficient for smaller projects
• May meet organizational needs
• Consistent with a modest investment in EVMS
• Provides valuable project insight

©MMI Management Technologies Ray Stratton - 9


Attributes of Level 3 - ANSI 748
COMPLIANT+

• An ANSI/EIA 748 compliant implementation


• EVMS training program
• Earned Value Process Group (EVPG)
• EVMS organization repository
• Organizational policy (System Description)

©MMI Management Technologies Ray Stratton - 10


Attributes of Level 4 -
MEASURED

• Measures the quality of EVM data


• Modulates earned value data per a technical baseline
and technical variance
• Introduces metrics for measuring EVMS health

©MMI Management Technologies Ray Stratton - 11


Attributes of Level 5 -
OPTIMIZING

• Planning and tracking improvement of the Earned


Value Management System
• Defect prevention is planned
• Defect causes are determined, prioritized,and
reduced

©MMI Management Technologies Ray Stratton - 12


The Earned Value Management
Categories

• EIA 748 defines five Categories of Earned Value


Guidelines
• Provides the implementation areas for each EVM 3®
Level
– ORGANIZATION
– PLANNING, SCHEDULING, and BUDGETING
– ACCOUNTING CONSIDERATION
– ANALYSIS and MANAGEMENT REPORTS
– REVISIONS and DATA MAINTENANCE

©MMI Management Technologies Ray Stratton - 13


Beyond ANSI 748

• EVMS Training
• Earned Value Process Group (EVPG)
• Earned Value Repository
• Earned Value Process Metrics
– measuring the organization’s Earned Value process
• Earned Value Process Improvement
– tracking the efforts to improve the process

©MMI Management Technologies Ray Stratton - 14


Mapping EIA 748 to EVM3®

• ANSI 748 Categories and EVM3 are related

LEVEL 1 2 3 4 5
ORGANIZATION X- X X X
PLANNING, SCHEDULING, BUDGETING X- X X X
ACCOUNTING X- X X X
ANALYSIS AND REPORTING X- X X X
REVISIONS AND DATA MAINTENANCE X- X X X
PROCESS METRICS X X
PROCESS IMPROVEMENT X

©MMI Management Technologies Ray Stratton - 15


Level 1 - Characteristics &
Processes

• There are no expectations at this level


• Some individuals may try EVMS
• Management does not encourage its use
• Lack of project planning may preclude meaningful
use of Earned Value

©MMI Management Technologies Ray Stratton - 16


Example of the Level 1
Organization

• Earned Value Management is applied by zealots


• Pockets of Earned Value Management deep with
projects
• No project wide roll-up
• Cost and schedule variance discussed in traditional
non-Earned Value terms
• Management is unfamiliar or unsupportive of Earned
Value

©MMI Management Technologies Ray Stratton - 17


Level 2 - Characteristics

• Use of a WBS
• Plan and schedule the Scope
• Budget cost accounts to functions or products
• Maintain a baseline (i.e., control changes)
• Monitor the project, forecast outcome

from Flemming and Koppleman “Earned Value Project


Management” 1996

©MMI Management Technologies Ray Stratton - 18


Level 2 - Processes

• Use of a WBS (2.1a) • Compute variances (2.4a)


• Who does the work (2.1b) • Analyze variances (2.4b)
• Act upon Earned Value data
• Use a time-phased budget
(2.4e)
(2.2c)
• Maintain baseline, revise as
• Use control accounts and authorized (2.5a)
work packages (2.2 d/e)
• Retain revision history (2.5b)
• Work packages add to • No unauthorized baseline
account budget (2.2f) changes (2.5d)
• Record costs like they’re • Document baseline changes
budgeted (2.3a) (2.5e)
Parentheses refer to EIA 748 sections

©MMI Management Technologies Ray Stratton - 19


Example of the Level 2
Organization

• Management supports limited implementation


• Limited investment (use of Excel vs. commercial
tools)
• Candidate projects are identified
• Selected projects and management staff are trained
on Earned Value principles
• Traditional reports continue
• Earned Value data is used in reporting and decision
making
• Financial system may not be integrated with Earned
Value (use of staff-hours versus dollars)
©MMI Management Technologies Ray Stratton - 20
Level 3 - Characteristics &
Processes

• Meets all ANSI/EIA 748 Guidelines…….


– Organization (5)
– Planning, Scheduling, Budgeting (10)
– Accounting (8, including subheadings)
– Analysis and Management Reports ( 8, includes subheadings)
– Revisions and Data Maintenance (5)
• EVMS is applied uniformly throughout the
organization via a “Systems Description” or similar
document
• Training program funded and in-place
• EVPG assisting in tailoring System Description to
project needs
• Earned Value library exists
©MMI Management Technologies Ray Stratton - 21
Example of the Level 3
Organization

• All guidelines of ANSI/EIA 748 met


• Employees receive training on Earned Value
principles and the implementation
• System Description approved, issued, used, and a
“change request” process exists
• System Description is tailored by projects, reviewed,
and approved
• EVPG addresses changes and tailoring
• Retention of best practices, lessons learned, past
project data is centralized
• Standardization of Earned Value Management tools

©MMI Management Technologies Ray Stratton - 22


Level 4 Characteristics

• Organization has process metrics


• Notional samples
– Consistency (value of work packages)
– Complexity (WBS fan-out)
– Workload (work packages per CAM, manager, etc.)
– Data latency (days from accounting to reporting)
– Baseline stability (number of replans per ……)
– Value of re-plan (significance to baseline)
– Correctness (number of retroactive accounting changes)
– Sensitivity (when EVMS data first indicated final outcome)
– Percent LOE content

©MMI Management Technologies Ray Stratton - 23


Level Of Detail

$
.
UNDER
.
REPORTING
.
GOAL
NOMINAL
VALUE .

OVER.
. .
REPORTING
0
1-5 6-10 11-15 16-20
NUMBER OF COST ACCOUNT
PACKAGES NUMBER OF WORK PACKAGES

©MMI Management Technologies Ray Stratton - 24


Accuracy And Latency

BCWP
ACWP
QUANTITY
(NOT VALUE)

30 60 90 120 150 180

ADJUSTMENT DELAY (DAYS)

©MMI Management Technologies Ray Stratton - 25


Data Latency

3
LATENCY EV REPORT
(WEEKS) 2 WP ACWP
WP BCWP
1

0
1 2 3 4 5 6 7 8 9 10

REPORT DATE OR NUMBER

©MMI Management Technologies Ray Stratton - 26


Planning Package Lead Time

NUMBER OF PLANS
PROMOTED FROM
PLANNING
PACKAGE

30 60 90 120 150 180


PLANNING PACKAGE DETAIL PLANNING
LEAD TIME (DAYS)

©MMI Management Technologies Ray Stratton - 27


Level 4 Processes

• Data on EVMS is collected periodically


• Trends are monitored
• Management is advised periodically
– positive and negative trends
– cost of EVMS
– data accuracy
– data latency
– accuracy of EVMS projections
• EVMS Improvement Plans are developed by EVPG

©MMI Management Technologies Ray Stratton - 28


Example of the Level 4
Organization

• An EVMS metrics collection effort is underway


• Independent from project or organizational Earned
Value performance data
• Periodic reports on the trends of data are provided
• Recommendations for improvement are documented
• Known problem areas are identified

©MMI Management Technologies Ray Stratton - 29


Level 5 Characteristics

• Organization has a EVMS Improvement Plan in place


• Process engineering is funded to implement
improvements in EVMS
• Improved processes are injected into new projects
• Metrics are collected
• Planned versus achieved improvements are
compared
• Improvement plans are revised as needed
• EVMS process data is continually analyzed for further
improvements

©MMI Management Technologies Ray Stratton - 30


Level 5 Processes

• Plans are published for improving their EVMS


• Projects are facilitated in using new procedures
• Budgets and schedule are defined for improvements

©MMI Management Technologies Ray Stratton - 31


Example of the Level 5
Organization

• EVMS is under constant improvement


• Improvement are uniquely budgeted and uniquely
staffed (EVPG)
• Earned Value data is made more accurate
• Earned Value data is more timely
• Less and less effort is spent in executing the EVMS
• EVMS historical data is used in estimating new work,
decision analysis parameters, simulations, etc.
• Data is used for project planning

©MMI Management Technologies Ray Stratton - 32


The Future ?

• EVM3® acceptance by industry and government


• Internal EVM3® assessments
– where are we good?
– where are we weak?
– what are the next steps?
– what is our Level?
• External formal EVM 3® evaluations
– independent EVMS process review
– contractor or teammate qualification

©MMI Management Technologies Ray Stratton - 33


Corporate and Stockholder
Value

• Higher EVM 3® should be a corporate goal


• Like ISO 9000, raises stockholder and analysts’
perception of company health
• Can increase business
• Can help manage more business with current assets

©MMI Management Technologies Ray Stratton - 34


The Goal

• Knowing how mature your organization is in


implementing EVMS
• Knowing how mature your contractors or suppliers
are in EVMS
• Being able to brag about your EVM3® Level to your
customers
The EVMS at
ACME CORP. is
performing at
EVM3® LEVEL 5!

©MMI Management Technologies Ray Stratton - 35


Obtaining the EVM3®

• Its free!
• Downloadable (pdf)
– www.mgmt-technologies.com

©MMI Management Technologies Ray Stratton - 36


Obtaining Assessments

• Self assessment
– Using the EVM3 and ANSI 798 as a checklist
– Deep knowledge of internal practices
– Lack of objectivity or benchmarks
• External Assessment (Recommended)
– Mix of external and internal assessors
– Retains depth of internal practices
– Adds objectivity and benchmark data
– Formalized report and plan of action
• Authorized assessors, lead assessors:see authors

©MMI Management Technologies Ray Stratton - 37


Legal Stuff..

• The Earned Value Management Maturity Model® and the abbreviation EVM3® are
trademarks of Management Technologies and registered in the U.S. Patent and Trademark
Office. Use of the term EVM3 shall refer to this document in its entirety.
• Special permission to use Key Practices of the Capability Maturity Model® for Software,
Version 1.1, CMU/SEI-93-TR-25, and Capability Maturity Model® for Software, Version 1.1,
CMU/SEI-93-TR-24, © 1993 by Carnegie Mellon University in The Earned Value
Management Maturity Model® is granted by the Software Engineering Institute.
• Capability Maturity Model® and CMM® are registered in the U.S. Patent and Trademark
Office.
• Management Technologies owns the exclusive right, title, and interest in and to The Earned
Value Management Maturity Model (EVM3) and any derivative works based upon the EVM3
created by any party.
• CMM, Capability Maturity Model, Capability Maturity Modeling are registered in the U.S.
Patent and Trademark Office. CMMI; CMM Integration are service marks of Carnegie Mellon
University. SW - CMM, SE - CMM, CMMI, P-CMM, and SA - CMM are trademarks and/or
service marks of the Carnegie Mellon University
• There is no teaming, licensing, contractual, or other business relationship between the
authors’ firms.

©MMI Management Technologies Ray Stratton - 38


ACRONYMS

®
• EMV3® - Earned Value Management Maturity Model
• C/SCSC - Cost/Schedule Control Systems Criteria
• SAR - Subsequent Application Review
• EIA - Electronic Industries Alliance
• ANSI - American National Standards Institute
• EVMS - Earned Value Management System
• EVPG - Earned Value Process Group
• CAM - Cost Account Manager
• IBR - Integrated Baseline Review
• LOE - Level of Effort

©MMI Management Technologies Ray Stratton - 39

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