Increasing the probability of project success using Earned Value Management

Increasing the Probability of
Program Success, using the
Principles of Earned Value
Management
This document describes the offerings needed to deliver value to clients.
4 3 4 7 P e b b l e B e a c h D r i v e ,
N i w o t C o l o r a d o 8 0 5 0 3
+ 1 3 0 3 2 4 1 9 6 3 3
1 1 / 1 5 / 2 0 1 1
Glen B. Alleman
Earned Value is a fundamental measurement of a program’s performance but far
from sufficient for the program’s success. Integration of risk, technical performance
measures, and systems engineering processes are needed to increase the
probability of program success. Success starts with a winning proposal, installing the
right tools and work processes, establishing a credible Performance Measurement
Baseline, identifying and handling programmatic and technical risk, and through
program execution a variety of technical, operational, and staffing processes are
needed and based on Earned Value Management processes.

Increasing the Probability of Program Success, using the Principles of Earned Value Management
Copyright ©, 2011, Glen B. Alleman, 4347 Pebble Beach Drive, Niwot, Colorado 80503
Increasing the probability of program success requires the application of 5 simultaneous program management processes. These 5 processes are
inter-related, dependent, and supportive of each other. Earned Value is at the heart of each of these 5 processes with the focus on measures
needed to forecast the future, rather than just reporting past performance.
Capabilities Needed For The Success Deployment Of An Earned Value Management Based Consulting Practice
Program Success Depends On Integrating 5 Critical Work Processes With Earned Value Management
Identify Needed System Capabilities Establish Requirements Baseline
Establish the Performance
Measurement Baseline
Execute the Performance
What capabilities are needed to
fulfill the project mission or business
goals?
What technical & operational
requirements are needed to
produce these capabilities?
What is the schedule and cost to
deliver products or services that
meet the requirements?
What are the periodic measures of
physical percent complete?
Define the set of capabilities needed
to achieve the project objectives or
the particular end state for a specific
scenario. Using the Concept of
Operations (ConOps), define the
details of who, where, and how this
capability is to be accomplished,
employed, and executed.
Define the technical and operational
requirements for the system
capabilities to be fulfilled. First,
define these requirements in terms
isolated from any implementation
details. Only then bind the
requirements with technology.
Build a time–phased network of
work activities describing the work
to be performed, the budgeted cost
for this work, the organizational
elements that produce the
deliverables, and the performance
measures showing this work is
proceeding according to plan.
Execute work activities, while
assuring all performance assessment
represent 100% completion before
proceeding. This means – No rework,
no forward transfer of activities to
the future. Assure all requirements
are traceable to work & all work is
traceable to requirements
 Define capabilities as operational
concepts
 Define capabilities with Use Cases
and Scenarios
 Assess needs, costs, and risks of
the capabilities simultaneously
 Define explicit, balanced, and
feasible alternatives.
 Perform fact finding
 Gather and classify requirements
 Evaluate and rationalize
requirements
 Prioritize requirements
 Integrate and validate
requirements
 Decompose scope into Work
Packages
 Assign responsibility for
deliverables
 Arrange Work Packages in logical
order
 Develop BCWS for Work Packages
 Assign Work Packages measures of
performance
 Set Performance Measurement
Baseline
 Perform authorized work
 Accumulate and report Work
Package performance
 Take corrective management
action
 Maintain the Performance
Perform Continuous Risk Management
What are the impediments to success and how are they being handled?
Apply Continuous Risk Management to each of the 4 process areas to: Identify, Analyze, Plan, Track, Control, and Communicate programmatic and
technical risk associated with each of the outcomes of the 4 processes.

Program success starts with the engaging with the right program in a way to mutually supports the goals the program. There can be bad business choices
made, where the wrong program or the wrong engagement style is chosen. This choice starts with the business development process, seeking good programs
to work. Knowing how to seek the right program is part of the Earned Value Management practice. Qualifying potential clients, knowing the culture, the
history, and the current work processes is critical to writing a winning proposal, but also critical to proposing the right method and approach to success after
the win.
Once these themes have been established the Earned Value Management practices can be tailored to suit the needs of the client and increase the probability
of success of the engagement as well as the probability of success for the program itself.
Business Development
Proposal Development Capture Support Thought Leadership Training And Development
 Trained proposal writers with
specific experience in program
controls and the methods needed
to increase the probability of
success.
 Apply a proprietary program
management method to increase
the probability of success, with
field proven success.
 Sales presentation materials
showing beneficial outcomes of
program management methods.
 Membership and leadership in
professional organization
memberships – NDIA, EFCOG, PMI
 Invited speaker on topics critical to
the program success.
 Board membership for the
recognized contribution to the
improvement of the industry.
 Recognized contributor to guides
and standards.
 Course development with
measureable benefits to students
and their work environment.
 Journal papers on EVM, Risk
Management, IMP/IMS
Development.
 Books or chapters on EVM, Risk,
and Program Controls,
Earned Value Management Business Process Model
EV Readiness Review
 Systems Description and
Work Instruction cross
reference to ANSI-748B.
 Cost, schedule, and
resource management
systems capabilities
assessment.
 PMB, IMS and data
reporting integrity
assessment.
 Risk based assessment of
32 criteria compliance.
EVMS Corrective Actions
 System Description and
Work Instruction creation
or improvement.
 IMP/IMS creation or
improvement.
 PMB creation or
improvement.
 Program staff Earned
Value development.
EVMS Deployment
 Establish a credible PMB,
IMS, and execution
processes.
 CAM mentoring, training,
and oversight.
 Assure EV reporting
processes provide valid
data to decision makers.
 Internal surveillance
processes.
DCMA Validation Lifecycle
 Self-assessment scoring.
 PAV readiness assessment.
 EVMS Validation road map
using SSOM and SSP
guidance.
Program Planning and
Controls Operational
 Improve managerial
decision making.
 Repeatable monthly
business rhythm to
produce credible CPRs.
 Risk adjusted EAC, ETC,
and IEAC.
 Control Account and Work
Package performance
reporting.

The selection, installation, deployment, and operation of an Earned Value Management System is a complex endeavor. It involves standalone Information
Technology, integration of this technology with other systems, development and deployment of new or changed work procedures, validation that those
procedures effectively deliver the expected value, and most importantly the changes needed to the behaviors of the staff to produce this expected value.
It is the latter activity that puts any Earned Value Management System at risk. Like all change, the human element is the least predictable, most volatile, and
most difficult to manage.
Any practice that deploys Earned Value must have an explicit change management offering to support the technology and procedure changes. Change
management is a practice in itself and must be the basis of all other practices.
With this in mind the activities below address the mechanical activities needed to introduce Earned Value Management to an organization or a program in
that organization. This involves most aspects of the business. From IT, the purchasing, the training, to senior and intermediate level management. An
integrated approach to deploying Earned Value Management must include all these processes in a tightly coupled delivery system.
Earned Value Management Systems Deployment
EV Engine Selection And
Standup
PMB Development IBR Preparation DCMA / DCAA Processes CAM Training
 Selection process based on
measureable ability to
comply with ANSI-748-B.
 Deep knowledge of
software systems and
integration with ERP and
Cost Accounting.
 Deployment planning for
small, medium, and large
systems.
 Tight integration of the
IMS to the EV engine
through database,
verification, and validation
of data integrity.
 Connect Control Account
and Work Package
performance to the EV
Engine reporting
processes.
 PMB development aligned
with CAS compliant
account system to the
Work Package level.
 EV Engine processes
developed to the Work
Package level.
 CAM interview questions
and training developed to
ensure successful IBR.
 Hands on coaching
mentoring, and training
and CAMs and Program
Control management.
 PAV work processes and
preparation activities.
 EVM Systems Description
development and
deployment in DOD, DOE,
NASA, and Federal Civ
domains.
 Work instruction and desk
instruction development
and training.
 CAS system integration.
 CAM training, materials,
classroom instruction and
hands on mentoring and
coaching using the
selected EV Engine.
 CAM Notebook
development and
deployment with manual
or electronics media.

Managing program risk means managing cost, schedule, and technical risks with activities that either retire those risks or handle them in sufficient time so
they do not become issues. Once a risk becomes an issue, the program is usually over budget and behind schedule, since time and money must be used to
remove the issue.
There are four attributes for managing risk. The measures of these attributes must be determined in order to properly respond with a risk tolerant approach
to reducing or eliminating risk.
1. The State of the Project – Maturity assessment point provide not only a review of the progress to date, but also an assessment of the readiness of the
project to proceed to the next step. The fidelity of a design, a fabrication or an operational capability can be assessed at each project Event.
2. The State of the Product – the accomplishments to date define the increasing maturity of product elements. These are explicitly stated in quantitative
terms.
3. The State of the process – exit criteria for the work and processes that produce the outcomes from the work. These exit criteria are how state of
product is measured. These are explicitly defined as the conditions of completion for each accomplishment.
4. Work delivery – Only those tasks that support the completion of the exit criteria are defined in the plan. They are discrete work. All other work is
defined as level of effort, since it has not specific defined outcome
The Risk Management activities are guided by the steps below, which are in turn guided by industry and agency Risk Management handbooks and directives.
Integrating this guidance with good program management practices and Earned Value’s measures of physical percent complete is the basis of increasing the
probability of program success.
Programmatic And Technical Risk Management
DoD/DOE/NASA Risk Management
Risk Management Tools and
Processes
DID 81650 IMS Development Technical Performance Indicators
 Development of Risk Management
Handbook for a variety of business
and technical domains.
 Technical risk categories for
software, hardware, systems,
designed for specific domains.
 Cardinal risk management
processes.
 Risk tool integration and use:
Active risk manager, MITRE Risk
Management, Risk Radar, and
Monte Carlo tools: Risk+
 Bayesian statistical risk estimating
with integration of Cost, Schedule,
and Technical Performance
measures.
 Estimating processes for schedule
and cost, using Category Theory
and Anchoring and Adjustment.
 Credible IMS development based
on technical performance
measures, probabilistic cost and
schedule risk.
 Connection of Technical
Performance Measures with IMP /
IMS processes.
 Development of TPM management
processes to assure credible
forecast of program performance.
 Integrate Risk Management and
Technical Performance
Management with PMB to produce
a credible, risk adjusted, Estimate
at Completion management.

The proposal must describe not only the technical solution, by the work processes needed to build the technical solution, and the program controls processes
used to manage the work, assure the work is executed in the proper order, and measure the physical progress of this work toward successful completion of
the project.
Success of the programmatic elements of the proposal starts with a program architecture, in the same way there is a technical architecture. The development
of both these architectures is a Systems Engineering role during the proposal phase. The Programmatic Architecture starts with an Integrated Master Plan
(IMP), showing how the delivered products or services increase in their maturity as the program progresses. The measures of maturity include Measures of
Effectiveness (MoE) and Measures of Performance (MoP).
The Measures of Effectiveness are operational measures of success that are closely related to the achievements of the mission or operational objectives
evaluated in the operational environment, under a specific set of conditions. The Measures of Performance characterize physical or functional attributes
relating to the system operation, measured or estimated under specific conditions. The Technical Performance Measures (TPM) are attributes that determine
how well a system or system element is satisfying or expected to satisfy a technical requirement or goal.
Each of the activities shown below must address these three measures as the tangible outcome of the work effort.
Proposal Support
Program Architecture Management Volume Cost Volume Risk Volume Color Team Review
 Value Stream Flow Of
Increasing Maturity Of
Deliverables
 Modeling Of “Process
Improvement” To Increase
The Probability Of Program
Success Using Technical
Performance Measures
 IMP Development Using
Tools For Microsoft Project
To Capture, Manage, And
Maintain The Integrity Of
The IMP From Proposal To
Program Execution.
 Increasing The Probability
Of Program Success By
Showing How Technical
Development And Program
Controls Are Integrating In
The Systems Engineering
Manner Into A Single
Seamless Work Process.
 Development Process For
IMP/IMS Guided By
Specific Work Instructions
Developed Over A Decade
Of Hands On Experience
 Work Package Based Cost
Baseline Connected With
IMP Through A Value
Stream Map Showing The
Increasing Maturity Of
Each Deliverable Measured
In Units Meaningful To The
Decision Makers Through
Technical Performance
Measures
 Probabilistic Cost Models
Attached With Each Major
Deliverable.
 Risk Retirement
Connections To The IMP
And IMS
 Probabilistic Risk
Retirement Processes
Described In The Program
Management Plan
 IMS Credibility
 Cost Credibility
 Risk Management
Credibility

Successful program execution starts with fine grained measures of physical percent complete. A fundamental question must be continually answered if how
long are you willing to wait before you find out you are late? Measures of physical percent complete need to be performed at intervals sufficiently short to
take management action to correct performance.
With the opportunity to take this corrective action, the program’s performance to reach a point where attempts to correct will have little or no effect on the
outcome, the project will be late and over budget.
For a CPR based program, this period of measurement should be weekly. Earned Value on a weekly basis appears to be overkill. But without measures of
physical percent complete, waiting the minimum one month reporting period provides no opportunity to be GREEN on the month end.
Program Execution Management
PMB Business Processes Risk Management Processes CPR Business Rhythm Program Performance Management
 Rolling Wave development by
partitioning IMS on logical
boundaries around IMP events
 Assure tangible deliverables are
produced for each rolling wave
with measureable physical
outcomes
 Work Package performance
measures using single deliverables
with Technical Performance
Measures.
 Compliance With DID 81650 IMS
Levels Through Integrated Tools
 IMS Development Using Tools For
Microsoft Project To Maintain The
Integration With The IMP
 Connection Of SA And AC
Narratives With Technical
Performance Measures And IMS
EV Performance Metrics To
Increase The Probability Of
Program Success Using OSD
Guidance
 Integrated Risk Management With
IMS.
 Each Risk Has A “Handling Plan” In
The IMS.
 Each Risk Connected To The Risk
Management System With A
Unique ID.
 Risk Management processes
guided by DOD, DOE, and NASA
risk frameworks with adjustments
to forecast to cost and schedule.
 Weekly EV measurement using
physical percent complete with
pre-defined measures of
performance.
 Monthly performance with EAC
built from physical percent
complete measures of the weekly
performance meetings.
 cost performance using
probabilistic models refined
weekly from past performance
 Reference Class estimating built
from systems architecture, past
performance, and systems
engineering processes.
 Probabilistic modeling of all work
activities
 Cruciality of activities to reveal
coupling and cohesion in the
activity network.
 Domain specific Technical
Performance Measures integrated
with the IMS.
 Risk adjusted performance with
Monte Carlo or Method of
Moments statistical analysis.

When programs get in trouble direct intervention is needed to get back to GREEN. Getting back to GREEN starts with an assessment of the program and the
firm’s commitment to perform and its ability to perform. With these commitments and abilities, the Root Cause of the non-performance must be identified in
order to define the corrective actions. A Root Cause Analysis (RCA) reveals the sources that require corrective actions.
With the corrective action plan in place, the PMB is then reconstructed guided by NDIA, DCMA, and agency program performance management directives.
There ten (10) steps needed to recover a project from RED:
1. Stop – halt the work
activities and assign a
team to start the triage
2. Assign An Evaluator –
recruit and external
professional to lead the
triage process.
3. Evaluate The Project
Status – to establish the
true and unvarnished
facts.
4. Evaluate The Team – to
identify problems that
may have contributed to
the current state.
5. Define The Minimum
Goals – that will reduce
the project to the
smallest size achieves
only the essential goals.
6. Determine Of The
Minimum Goals Can Be
Met – analyze the
feasibility of the minimum
goals and determine if
they can reasonably be
achieved
7. Rebuild The Team –
based on the recovery
goals, rebuild a
competent team that can
execute the project using
the approved processes.
8. Perform A Risk
Assessment – with the
new goals and the rebuilt
team, identify process
and personnel risk and
provide corrective
actions.
9. Revise The Plan –
produce a new IMS, BOE,
and Risk Management
Plan that includes the
corrective action from
the previous approach.
10. Install An Early
Warning System – put a
system in place to
ensure the project does
not slip back into its old
ways.
Capabilities Needed for the success Deployment of An Earned Value Management Based Consulting Practice
Program And Project Triage
Assess Existing Baseline Rebaseline WBS Rebaseline IMS Reestablish PMB
 WBS assessment
 SOW/SOO/ConOps connections
 EVMS-SD Review
 Develop candidate WBS and
Program Events
 Training, Mentoring, Coaching
 MIL-STD-881A Compliant WBS
 IMP elements that describe
increasing program maturity
 DID 81650
 EVMIG and other EV guidance
 Work Packages and Planning
Packages to increase maturity
 Resource loaded, risk adjusted
WP/PP.
 Foot and Tie the new Basis of
Estimate to the Work Packages.
 Integrate a DoD, DOE, NASA or
other agency compliant Risk
Management System.
 Perform the needed Probabilistic
risk analysis on the schedule and
cost baseline to assure a credible
PMB.
 Vertical and Horizontal integration
WP/PP to Program Events
 Programmatic and technical risk
impacts.
 Define Technical Performance
Measures for each Work Package,
Measures of Effectiveness (MoE)
and Measures of Performance
(MoP) at least at the Control
Account level, and the measures to
be used to provide visibility to the
progress to plan of all planned
work.

Applying Earned Value Management and its supporting system to projects and programs must answer these 5 Immutable questions in units of measure
meaningful to the decision makers. These answers are:
1. What does done look like? – An Integrated Master Plan and
Integrated Master Schedule, with Work Packages, each
with Technical Performance Measures and a Cost (BCWS)
baseline.
2. How do we get there? – A logical network of Work
Packages, with their Tasks, the cost and schedule margin
derived from a risk model, and defined measures of
physical percent complete.
3. Do we have enough time, resources, and money to get
there? – a credible BCWS spread at the Work Package level,
derived from a resource loaded IMS, and sufficient cost and
schedule margin, derived from a probabilistic model of the
work processes.
4. What impediments will we encounter along the way? – An
integrated Risk Management system, where risks and their
retirement are integrated with the IMS, with budget for
risk retirement on the baseline or in the management
reserve.
5. How do we know we are making progress? – Each Work
Package and its tangible deliverable have pre-defined
performance measures. Either Measures of Effectiveness
or Measures of Performance, including Technical
Performance Measures in units meaningful to the decision
makers.

Glen B. Alleman
Niwot Ridge Consutling
4347 Pebble Beach Drive
Niwot, Colorado 80503
glen.alleman@niwotridge.com
+1 303 241 9633

Increasing the probability of project success using Earned Value Management

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Increasing the probability of project success using Earned Value Management