EV in IT

1. Implementing EV in ITA Three Step ApproachJohn ChapmanTouchstone Ltdjohn.chapman@touchstone.co.uk

2. EV in IT • Implementing Earned Value Management requires a change of working practice. Not only do Project managers need educating in EV but • Project accounting has to be setup to track the • financial values • Project delivery methods have to take into account • how to ‘Earn the Value’ i.e. how do we evidence • that we have completed the deliverable by type of • work • Tools implemented to track items such as Schedule • Variance against baseline plan

3. A way of approaching • Instead of trying to achieve all these at once a proposal is to split this into three levels representing three levels of maturity • Level 01: Focus on the financial values • Level 02 : Implement changes to the delivery • method so the BCWP can be calculated (i.e. how are • you going to earn the value by the type of work) • Level 03: Track schedule variance, SPI, TCPI and • so forth

5. Level 01: The Financials • Work out how you are going to calculate 8 elements: • ACWP • BAC • CV • CWBS (do your PMs produce a WBS?) • EAC • ETC • PMB

6. Level 01: Planning • From a planning perspective you need: • Planned time (for each WBS element) • Actual time (by WBS) • Remaining effort (so you can calculate ETC) • Baseline (to calculate the spend over a period of time) • Planning package (so you know what to do when) • Work Package (to get individuals to do their work)

7. Level 01: Planning • From a planning perspective you need: • Planned time (for each WBS element) • Actual time (by WBS) • Remaining effort (so you can calculate ETC) • Baseline (to calculate the spend over a period of time) • Planning package (so you know what to do when) • Work Package (to get individuals to do their work)

8. Level 02: Earning the value • This takes more work as for each activity you need to define how you are going to ‘Earn the value’ • Is it going to be • 50 – 50 • Budget Milestone • 100 – 0 • etc • etc

9. Level 02: Earning the value • For example on an IT Project • Training is 0-100 : either you are trained or not trained! • Design could be by budgeted milestone • 25% on completion of a design workshop • 50% on issuing a design document • 25% on design signoff

10. Level 02: The financials • There are 6 elements to this: • BCWP (Earned) • BCWS (Planned) • Cost Variance % • CPI • Management Reserve • Undistributed budget

11. Level 02: Planning • From a planning perspective you need: • Duration Variance • % Complete • how are you going to identify the physical % complete? • What skills do your team need to say whether they are 50% or 60% complete? • How will this be proved?

12. Level 03: The financials • At level 03 we are calculating values compared to time and productivity • SV • SV % • SPI • TCPI

13. Level 03: The financials • The TCPI ‘provides a projection of the anticipated performance required to achieve either the BAC or the EAC’1 • The TCPI might tells us what we need to do – but how are we going to achieve improvements in Productivity? • 1. http://en.wikipedia.org/wiki/Earned_value_management

14. Summary • Level 01: is about calculating the financial values • Level 02: is about confirming the method of ‘earning the value’ • Level 03: is about understanding the schedule and changes to the schedule