Right Sizing: Shrink to Fit – How to Scale your EVMS

Why would an organization set up a complex, robust, customized Earned Value Management System for a few projects valued at less than $100K? They would not, because it isn’t necessary.  Yet, many organizations have fallen victim to implementing the Ferrari EVMS when a Ford would have done the job.
In our last blog, we noted that for a non-certified EVMS, you don’t have to implement all 32 criteria of ANSI/EIA 748 rigorously to realize the benefits of an EVMS. Using the NDIA ANSI/EIA 748 Intent Guide, you can cherry pick the criteria that you think would generate the greatest ROI in the immediate future.  While you’re reaping those rewards, you can then focus on your longer term goals, which may mean broadening your EVMS to include more of the 32 criteria as your organization matures and grows. Then, eventually, you may win some contracts requiring a certified EVMS, and you'll already be 10 steps ahead.

A certified EVMS can yield fabulous results, but it can also be costly, time consuming, and fraught with bureaucratic red tape. When certification isn't required, it makes sense to implement only what you need right now: the measurement of earned value and comparisons to the planned value and actual cost. Reviewing all 32 criteria, while implementing only high impact items, is a great way to look at your proposed EVMS comprehensively, and allows you to plan for growth. Start with the end in mind and your implementation will be smoother, less expensive, and will easily integrate with your software packages. 

What does the Ford version of an EVMS look like? Look at the first of the five areas of the ANSI/EIA 748 for an outline of what the framework should include—and which ones you might get away with skipping for now:

The first of five essential frameworks (ANSI/EIA 748) is Organization

1. At a minimum, develop a Work Breakdown Structure (WBS) for your projects; make sure it encompasses the entire scope and is the same in all your systems.  I can’t stress the importance of this enough: the same WBS is KEY to integration and will allow you to compare apples to apples.  Otherwise you have to create a crosswalk from one system to another and THAT is messy.
2. Your organization may not have an Organizational Breakdown Structure (OBS).  You can develop one from your organizational structure, but if you don’t want a formal OBS, you can at least assign groups responsible for executing the work elements in the WBS, thus assigning authority and accountability.
3. Make efforts to integrate the WBS/OBS into your processes and systems, especially between the accounting system, the project schedule, and the work authorization process or system.  
4. A simplified EVMS doesn’t need Control Accounts (CA), which is the intersection of the WBS and OBS.  If you have a basic understanding of who is performing specific elements of work in the WBS, you can still hold them accountable.  However, it does formalize the authority and responsibility, and allows you to publish a Responsibility Assignment Matrix (RAM).  This makes it easier to summarize performance by WBS and/or OBS for further insight and management control into those areas.  Good stuff.
5. You MIGHT NOT need a separate effort to identify who is controlling indirect costs.  This is because many organizations already have it in place, at some level (if not, it IS a good idea).  However, I do recommend you review the criteria and discussion in the ANSI/EIA 748 Intent Guide.  Reading it may help you understand why you might need to build these elements into the design of your system.

The suggestions above are not difficult to implement, but they do take time to ensure they’re designed appropriately and make sense for your company and project.  Yet, taking this time up front is well worth it, since you’ll now be able to tell what scope is related to current project performance, who is responsible for it, and you can roll it up in a summary or expand it to see details.

Have you worked on a project where you’ve seen the design and implementation of the Organization elements of the 32 criteria?  How did they proceed and what worked?

Next week we’ll take a look at the next area of the 32 criteria from the ANSI/EIA 748; Planning, Scheduling, and Budgeting.  Don’t miss it!

- Melissa Duncan (About Melissa)

Read the previous posting RIght Sizing Your Earned Value Management System

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Earned Value legend as there may be a few of us that don’t yet have this memorized…

CA=Control Accounts
CAM=Control Account Manager
CPI=Cost Performance Index

EVM=Earned Value Management

EVMS=Earned Value Management System

EAC=Estimate At Completion 
IPMR=Integrated Program Management Report
OBS=Organizational Breakdown Structure
PC=Project Controls
PM=Project Manager
RAM=Responsibility Assignment Matrix
SPI=Schedule Performance Index
WBS=Work Breakdown Structure