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Product Based Earned Value

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WILLCOXDJ

This document introduces a simple approach to earned value management for product-based planners. It discusses measuring work completed, time taken, and costs incurred to determine if a project is on track. The document outlines steps to modify an existing product-based plan to include a weighted planned value and earned value calculation for each product. This provides a percentage completion measure over time for reporting progress to stakeholders.

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Earned Value A simple approach for Product Based Planners David Willcox Senior Consultant IT Project Manager 息 PlanIT 2TCQ Ltd 1 http://www.planit2tcq.co.uk/
Are you a fan or a sceptic? Earned Value is an advanced Project progress monitoring approach where you measure the work complete, the time taken and the costs incurred to see if a project is on track In terms of usefulness it has divided option, some believe it should always be used because it is the only true way of measuring overall progress; some believe that the effort necessary to measure properly outweighs the benefits gained I have never used it fully myself or seen it fully implemented despite being involved in some major programmes over the last 20 years However, I suggest that good product based planners can gain some of the key benefits for little extra work I have been testing the concept on a recent project and it seems to offer benefits including Project Board communication as people prefer a graph to a dry set of milestones (although I have used both in progress packs) 息 PlanIT 2TCQ Ltd 2 http://www.planit2tcq.co.uk/
Are you a Product Based Planner? Identifying the Products to be delivered is a cornerstone of methods such as PRINCE2 It is an excellent planning approach which I always use Even on its own, it is a way of measuring project progress However, for a little extra effort, it can be used to measure a simplified Earned Value representation and give an even better view of progress I will take you through step by step on a sample project and you can see the benefits 息 PlanIT 2TCQ Ltd 3 http://www.planit2tcq.co.uk/
Step 1 Normal Product Based Planning Identify the products, their flow etc. Estimate the effort to produce and quality assure Build your plan Produce a Product Inventory in Excel Do not forget to include nondocumentproducts For documents, you record your baseline dates for production of a draft and for the document to be baselined following full quality review / signoff For non documents I have still included a draft date approximately around 50% through the production cycle 息 PlanIT 2TCQ Ltd 4 http://www.planit2tcq.co.uk/
Step 2 Add weighted Planned Value Add 3 columns to your spreadsheet (you will an example in a moment) PV = Valuation of each product (relative factor) EV% = % of the value of the product earned EV = PV * EV% PV needs a bit of thought, for simplicity I use a relative value of each product. It is a judgement call but I have used 1 when in doubt Reduced for some management products (but increased for PID as this is important) Bigger values for important design docs, software to be used etc 息 PlanIT 2TCQ Ltd 5 http://www.planit2tcq.co.uk/
Step 3 How much value by Product Status? My Product Inventory tracks the following statuses and my suggested relative value Not Started = 0% Being Drafted = 20% Draft Issued = 50% Partially Approved = 70% Approved = 100% Some simple VLOOKUPS & you have an Earned Value for each product to be produced 100% of ALL products approved is the total value of the project 息 PlanIT 2TCQ Ltd 6 http://www.planit2tcq.co.uk/
The Project Products Inventory Project xxxxxx - Key Product Status as at 29/06/2012 33.9 11.4 Draft Draft Draft Fully Fully Fully Issued Issued Issued Approve Approve Approve # Gate Name Status Base Fore Actual Base Fore Actual PV EV% EV 1 1Q A-B Feasibility Delivery Approach Approved 15/05/12 15/05/12 16/05/12 16/05/12 1.0 100% 1.0 2 1Q A-B Gate B Investment Case Approved 25/05/12 25/05/12 31/05/12 08/06/12 0.5 100% 0.5 3 1Q A-B High Level Architecture Partially Approved 18/05/12 18/05/12 01/06/12 02/07/12 0.5 70% 0.4 Aligne Book / Trade 4 3D B-C Descriptions Design Approved 01/06/12 01/06/12 15/06/12 22/06/12 3.0 100% 3.0 5 3D B-C Detailed Requirements Draft Issued 12/06/12 21/06/12 22/06/12 05/07/12 1.5 50% 0.8 6 3D B-C Process Map Partially Approved 12/06/12 15/06/12 22/06/12 03/07/12 1.5 70% 1.1 7 3D B-C Inventory of Build Items Partially Approved 15/06/12 22/06/12totals at top02/07/12 See 22/06/12 1.5 70% 1.1 Inventory of Process / 8 3D B-C Procedures to amend Partially Approved 15/06/12 Product relative value of 22/06/12 22/06/12 02/07/12 1.0 70% 0.7 9 3D B-C Business Readiness Plan Partially Approved 15/06/12 3, it is fully approved so 15/06/12 22/06/12 29/06/12 0.5 70% 0.4 10 3D B-C Gate C Investment Case Partially Approved 21/06/12 21/06/12 100% of 3 = 3 EV is 26/06/12 06/07/12 0.5 70% 0.4 11 3D B-C Technical Architecture Design Draft Issued 15/06/12 27/06/12 27/06/12 09/07/12 0.5 50% 0.3 12 3D B-C Project Initiation Document Draft Issued 21/06/12 21/06/12 29/06/12 09/07/12 2.0 50% 1.0 13 4B C-D Test Plan Not Started 06/07/12 20/07/12 1.5 0% 0.0 Reports, Models all built & unit 14 3D B-C tested Being Drafted 20/07/12 27/07/12 5.0 20% 1.0 Processes / Procedures all 15 3D B-C updated & reviewed Not Started 27/07/12 03/08/12 2.0 0% 0.0 16 4B C-D Test Scripts Not Started 20/07/12 03/08/12 2.0 0% 0.0 17 5T C-D Go/No Go Checklist Not Started 20/08/12 28/08/12 1.0 0% 0.0 18 5T C-D Storm Plan Not Started 28/08/12 11/09/12 1.0 0% 0.0 19 5T C-D End of Test Report Not Started 11/09/12 14/09/12 3.0 0% 0.0 Implemented Reports, Models 20 6I C-D etc Not Started 14/09/12 14/09/12 4.0 0% 0.0 21 7H C-D End of Project Report Not Started 05/11/12 12/11/12 0.2 0% 0.0 22 7H C-D Lessons Learnt Report Not Started 05/11/12 12/11/12 0.2 0% 0.0 息 PlanIT 2TCQ Ltd 7 http://www.planit2tcq.co.uk/
Step 4 Add Sheet with some running totals Sort the Inventory by baseline FA Bas Date Tot PV% Tot EV% 16/05/12 2.9% 2.9% product approved date 31/05/12 4.4% 01/06/12 Use the relative factors to show in 15/06/12 5.9% 14.7% a table % of PV over time leading 22/06/12 19.2% 22/06/12 to 100% 22/06/12 23.6% 28.0% Spreadsheet calculates the 22/06/12 31.0% 22/06/12 32.4% 29.5% totalto date EVas a by-product 26/06/12 33.9% of updating milestones for 27/06/12 35.4% 29/06/12 41.3% 33.5% tracking purposes as below and 20/07/12 45.7% while you are updating product 27/07/12 60.5% 03/08/12 66.4% status & forecasts, you enter the 03/08/12 72.3% EV% in the table for the date 28/08/12 75.2% 11/09/12 78.2% 14/09/12 87.0% Total EV showing at the moment is 11.35 for date 29/06/2012 14/09/12 98.8% which represents a percentage of 33.5% 12/11/12 99.4% 12/11/12 100.0% 息 PlanIT 2TCQ Ltd 8 http://www.planit2tcq.co.uk/
The EV chart for use in reporting Project xxxx - Earned Value via Products 120.0% As at 29/6 EV% for project is 33%. Planned to be 41%. Reason - struggling to get full approval of 100.0% some products produced as large number of approvers 80.0% % of Value Tot PV% 60.0% A lot of planned value when have implemented - only a little added Tot EV% during post implementation to 40.0% project closedown 33.5% 29.5% 20.0% 2.9% 0.0% 12 12 12 12 12 12 12 12 12 12 12 12 12 20 20 20 20 20 20 20 20 20 20 20 20 20 5/ 6/ 7/ 8/ 8/ 0/ 0/ 6/ 7/ 9/ 9/ 0/ 5/ /0 /0 /1 /0 /0 /0 /0 /1 /0 /0 /0 /0 /1 16 11 25 05 19 03 31 30 13 27 08 22 17 息 PlanIT 2TCQ Ltd 9 http://www.planit2tcq.co.uk/

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Product Based Earned Value

  • 1. Earned Value A simple approach for Product Based Planners David Willcox Senior Consultant IT Project Manager 息 PlanIT 2TCQ Ltd 1 http://www.planit2tcq.co.uk/
  • 2. Are you a fan or a sceptic? Earned Value is an advanced Project progress monitoring approach where you measure the work complete, the time taken and the costs incurred to see if a project is on track In terms of usefulness it has divided option, some believe it should always be used because it is the only true way of measuring overall progress; some believe that the effort necessary to measure properly outweighs the benefits gained I have never used it fully myself or seen it fully implemented despite being involved in some major programmes over the last 20 years However, I suggest that good product based planners can gain some of the key benefits for little extra work I have been testing the concept on a recent project and it seems to offer benefits including Project Board communication as people prefer a graph to a dry set of milestones (although I have used both in progress packs) 息 PlanIT 2TCQ Ltd 2 http://www.planit2tcq.co.uk/
  • 3. Are you a Product Based Planner? Identifying the Products to be delivered is a cornerstone of methods such as PRINCE2 It is an excellent planning approach which I always use Even on its own, it is a way of measuring project progress However, for a little extra effort, it can be used to measure a simplified Earned Value representation and give an even better view of progress I will take you through step by step on a sample project and you can see the benefits 息 PlanIT 2TCQ Ltd 3 http://www.planit2tcq.co.uk/
  • 4. Step 1 Normal Product Based Planning Identify the products, their flow etc. Estimate the effort to produce and quality assure Build your plan Produce a Product Inventory in Excel Do not forget to include nondocumentproducts For documents, you record your baseline dates for production of a draft and for the document to be baselined following full quality review / signoff For non documents I have still included a draft date approximately around 50% through the production cycle 息 PlanIT 2TCQ Ltd 4 http://www.planit2tcq.co.uk/
  • 5. Step 2 Add weighted Planned Value Add 3 columns to your spreadsheet (you will an example in a moment) PV = Valuation of each product (relative factor) EV% = % of the value of the product earned EV = PV * EV% PV needs a bit of thought, for simplicity I use a relative value of each product. It is a judgement call but I have used 1 when in doubt Reduced for some management products (but increased for PID as this is important) Bigger values for important design docs, software to be used etc 息 PlanIT 2TCQ Ltd 5 http://www.planit2tcq.co.uk/
  • 6. Step 3 How much value by Product Status? My Product Inventory tracks the following statuses and my suggested relative value Not Started = 0% Being Drafted = 20% Draft Issued = 50% Partially Approved = 70% Approved = 100% Some simple VLOOKUPS & you have an Earned Value for each product to be produced 100% of ALL products approved is the total value of the project 息 PlanIT 2TCQ Ltd 6 http://www.planit2tcq.co.uk/
  • 7. The Project Products Inventory Project xxxxxx - Key Product Status as at 29/06/2012 33.9 11.4 Draft Draft Draft Fully Fully Fully Issued Issued Issued Approve Approve Approve # Gate Name Status Base Fore Actual Base Fore Actual PV EV% EV 1 1Q A-B Feasibility Delivery Approach Approved 15/05/12 15/05/12 16/05/12 16/05/12 1.0 100% 1.0 2 1Q A-B Gate B Investment Case Approved 25/05/12 25/05/12 31/05/12 08/06/12 0.5 100% 0.5 3 1Q A-B High Level Architecture Partially Approved 18/05/12 18/05/12 01/06/12 02/07/12 0.5 70% 0.4 Aligne Book / Trade 4 3D B-C Descriptions Design Approved 01/06/12 01/06/12 15/06/12 22/06/12 3.0 100% 3.0 5 3D B-C Detailed Requirements Draft Issued 12/06/12 21/06/12 22/06/12 05/07/12 1.5 50% 0.8 6 3D B-C Process Map Partially Approved 12/06/12 15/06/12 22/06/12 03/07/12 1.5 70% 1.1 7 3D B-C Inventory of Build Items Partially Approved 15/06/12 22/06/12totals at top02/07/12 See 22/06/12 1.5 70% 1.1 Inventory of Process / 8 3D B-C Procedures to amend Partially Approved 15/06/12 Product relative value of 22/06/12 22/06/12 02/07/12 1.0 70% 0.7 9 3D B-C Business Readiness Plan Partially Approved 15/06/12 3, it is fully approved so 15/06/12 22/06/12 29/06/12 0.5 70% 0.4 10 3D B-C Gate C Investment Case Partially Approved 21/06/12 21/06/12 100% of 3 = 3 EV is 26/06/12 06/07/12 0.5 70% 0.4 11 3D B-C Technical Architecture Design Draft Issued 15/06/12 27/06/12 27/06/12 09/07/12 0.5 50% 0.3 12 3D B-C Project Initiation Document Draft Issued 21/06/12 21/06/12 29/06/12 09/07/12 2.0 50% 1.0 13 4B C-D Test Plan Not Started 06/07/12 20/07/12 1.5 0% 0.0 Reports, Models all built & unit 14 3D B-C tested Being Drafted 20/07/12 27/07/12 5.0 20% 1.0 Processes / Procedures all 15 3D B-C updated & reviewed Not Started 27/07/12 03/08/12 2.0 0% 0.0 16 4B C-D Test Scripts Not Started 20/07/12 03/08/12 2.0 0% 0.0 17 5T C-D Go/No Go Checklist Not Started 20/08/12 28/08/12 1.0 0% 0.0 18 5T C-D Storm Plan Not Started 28/08/12 11/09/12 1.0 0% 0.0 19 5T C-D End of Test Report Not Started 11/09/12 14/09/12 3.0 0% 0.0 Implemented Reports, Models 20 6I C-D etc Not Started 14/09/12 14/09/12 4.0 0% 0.0 21 7H C-D End of Project Report Not Started 05/11/12 12/11/12 0.2 0% 0.0 22 7H C-D Lessons Learnt Report Not Started 05/11/12 12/11/12 0.2 0% 0.0 息 PlanIT 2TCQ Ltd 7 http://www.planit2tcq.co.uk/
  • 8. Step 4 Add Sheet with some running totals Sort the Inventory by baseline FA Bas Date Tot PV% Tot EV% 16/05/12 2.9% 2.9% product approved date 31/05/12 4.4% 01/06/12 Use the relative factors to show in 15/06/12 5.9% 14.7% a table % of PV over time leading 22/06/12 19.2% 22/06/12 to 100% 22/06/12 23.6% 28.0% Spreadsheet calculates the 22/06/12 31.0% 22/06/12 32.4% 29.5% totalto date EVas a by-product 26/06/12 33.9% of updating milestones for 27/06/12 35.4% 29/06/12 41.3% 33.5% tracking purposes as below and 20/07/12 45.7% while you are updating product 27/07/12 60.5% 03/08/12 66.4% status & forecasts, you enter the 03/08/12 72.3% EV% in the table for the date 28/08/12 75.2% 11/09/12 78.2% 14/09/12 87.0% Total EV showing at the moment is 11.35 for date 29/06/2012 14/09/12 98.8% which represents a percentage of 33.5% 12/11/12 99.4% 12/11/12 100.0% 息 PlanIT 2TCQ Ltd 8 http://www.planit2tcq.co.uk/
  • 9. The EV chart for use in reporting Project xxxx - Earned Value via Products 120.0% As at 29/6 EV% for project is 33%. Planned to be 41%. Reason - struggling to get full approval of 100.0% some products produced as large number of approvers 80.0% % of Value Tot PV% 60.0% A lot of planned value when have implemented - only a little added Tot EV% during post implementation to 40.0% project closedown 33.5% 29.5% 20.0% 2.9% 0.0% 12 12 12 12 12 12 12 12 12 12 12 12 12 20 20 20 20 20 20 20 20 20 20 20 20 20 5/ 6/ 7/ 8/ 8/ 0/ 0/ 6/ 7/ 9/ 9/ 0/ 5/ /0 /0 /1 /0 /0 /0 /0 /1 /0 /0 /0 /0 /1 16 11 25 05 19 03 31 30 13 27 08 22 17 息 PlanIT 2TCQ Ltd 9 http://www.planit2tcq.co.uk/