Right Sizing: A Common Point of EVMS Failure - Revisions and Data Maintenance

This week we review the last set of criteria in the ANSI/EIA-748: Revisions and Data Maintenance

Have you ever seen or implemented a complicated, convoluted, nobody-can-understand-it-but-the-originator baseline change proposal?  The kind that makes you go cross-eyed just trying to sort out the pieces?  These beasts make it difficult to produce all the backup information; many times there are just too many renditions of before/after scenarios before the “right” one was found.  Scope was added and removed, resources and rates changed, the WBS and OBS were restructured, logic was refined, and then management took 10% right off the top!    In the end, no one remembers how they got from A to Z, but you’re still responsible for reconciling it, eh?  If you’re lucky, your EV software is friendly enough to aid you in your quest.  Even if it isn’t, the revisions and data maintenance criteria in the ANSI/EIA-748 will help prevent such a nightmare.

Revisions and data maintenance are common areas for the failure of an EVMS.  Why?  Well, to be frank, one reason is because the management of revisions and data maintenance is not fun and can be a pain in the rear (i.e. high PITA factor).  It can be time consuming and doesn’t “yield” any additional benefit beyond what is initially gained from the criteria in the other four frameworks of your EVMS.  It is a necessary evil—something you have to do in order to have valid EVMS data.  People don’t like spending time and money on things that don’t directly provide added benefit, so they tend to slack on the maintenance of the data.  This is a huge mistake, because it undermines your entire EVMS.  If you spent time and money to implement your EVMS, why not take care of it so it can continue to meet your needs in the future?

When it comes to implementing aspects of the ANSI/EIA-748 in a non-certified EVMS, you’ll find that really ALL of the criteria in this framework are necessary for your program.  The level of rigidity needed in their application is where you’ll find wiggle room.  Less formal programs may not need the strict guidelines that a formal program may need, but they still need the basics.  Either way, you can customize the methods and execution of the criteria through your procedures and implementation of them, including various approval levels for baseline changes.  Let’s take a look at the criteria and why they’re needed for any EVMS:

1. Incorporate authorized changes in a timely manner.  This maintains integrity of your Performance Measurement Baseline (PMB) and allows you to measure and report earned value based on reality (as much as possible).  It also helps ensure work, budget, schedule are aligned with each other.  Ask yourself, “Does it make sense to wait for a year to implement an authorized change?”  Imagine having several baseline changes that have been hanging out there for a year.  It suddenly becomes easy to see how this will make your analysis more difficult and compromise the integrity of the baseline.
2. Reconcile the new budgets with prior budgets - changes should only be made via baseline change requests that are authorized and have formal documentation and backup for traceability.  This is how you VERIFY the integrity of the PMB.
3. Control retroactive changes.  Ever heard the term “Don’t change history”?  Retroactive changes can mask variance trends and limit the ability to use Earned Value to forecast.  Controlling these changes protects the integrity and accuracy of the PMB and EV.  The exception would be data entry corrections or routine accounting adjustments.
4. Prevent revisions except for authorized changes.  Once again, the integrity of your PMB is at stake and you risk having an Over-Target Baseline (OTB) after the fact.  It’s always best to know if the proposed changes would create an OTB condition, before you implement it.  Additionally, implementing revisions that are unauthorized can make your project management technique the equivalent of Whack-A-Mole; complete with moving targets and ensuing frustration.
5. Document Changes thoroughly.  It may sound easy but proper documentation sometimes slips by when you’re in a rush.  Or, you may think you documented everything in sufficient detail within your before/after schedules, timephased budgets, etc., but then a new manager walks in and wants to know some tiny detail that you didn’t document.  And you can’t remember.  That’s not a good feeling!  I’ve also taken over projects where there was a total lack of documentation of changes and no one can figure out how the project got to that point.  This isn’t fun, and it’s taking away precious time that could be used to manage the project better.  So, the bottom line is: make sure any lunatic can follow your logic and come up with the same result.  A baseline change proposal should be a stand-alone document.

See a trend yet?  The main issue here is traceability and integrity of the PMB, supported by adequate documentation.  Never undermine your EVMS by delaying or reducing project performance visibility through improper change control and data maintenance. The tools you’ll need to successfully manage and implement the 5 criteria listed above can include: change control logs, change management procedures, an active change control board, documentation showing impacts on budget, schedule, and scope.  And, if able, use your EV software to print reports that show exactly what changed—which is fabulous for reconciling the before and after scenarios.  The rule of thumb for revisions and data maintenance is “proceed with caution and leave a clear trail of breadcrumbs”.

Do you have any war stories cause by inadequate management of revisions and data maintenance?  Please share in the comments!  Stay tuned for my next blog where I’ll discuss Finding EV Software with a Low PITA Factor.  

- Melissa Duncan (About Melissa)

Read the previous posting - Right Sizing:  Analysis and Management Reports Showcase Your EVMS

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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
EAC=Estimate At Completion  

EVM=Earned Value Management

EVMS=Earned Value Management System
EAC=Estimate At Completion 

IPMR=Integrated Program Management Report
LOE=Level of Effort
OBS=Organizational Breakdown Structure
OTB=Over Target Baseline
PC=Project Controls
PM=Project Manager
PMB=Performance Measurement Baseline
RAM=Responsibility Assignment Matrix
SPI=Schedule Performance Index
WBS=Work Breakdown Structure

Right Sizing: Analysis and Management Reports Showcase Your EVMS

This week we tackle the fourth of five in our five essential frameworks discussion; we will review the Analysis and Management Reports from the ANSI/EIA-748 guidance.

The analysis and reporting aspects of your EVMS are where the rubber meets the road.  They are your crystal ball that allows you to “see” into the future and make course corrections in your projects.  In this way, they are the very essence of Earned Value Management; they are the reason it exists in its current form.  The other criteria in the standard are set up to support the EVMS framework, but the analysis and reporting criteria are where you actually use the tool to better manage your projects.  Not surprisingly, selecting an Earned Value Management software that can generate the information you need—quickly and easily, becomes crucial.  I started my career as a very spoiled Project Controls Engineer and then became a very unspoiled Project Manager; so I can tell you firsthand, easy access your EV data can be a luxury.  So do your due diligence and take the time to find the reports and software that fits your needs.

Speaking of needs, what exactly do you need for analysis and reporting in your EVMS?  If you’re operating under a certified EVMS, then you have some prescribed analysis techniques and reports that must be completed for your customer (and your organization).  However, if you’re NOT required to be certified, where do you start?  There are so many different reports and ways to analyze the data—how do you know what’s right?  Let’s dive into the criteria contained in the ANSI standard and see which items are most critical to your success.

1. At least on a monthly basis, review variances.  Compare your planned work against your earned work to obtain the schedule variance.  Then compare your earned work against the actual cost of that work to obtain the cost variance.  If you have control accounts, compare the numbers at this level; if you don’t, compare the numbers at a level that makes most sense—in some cases, this will be at a level that will cause the most pain if not completed as planned.  Use your WBS and/or OBS (if you have one) to summarize or slice and dice the data for better visibility.
2. Highlight the significant variances and provide explanations for each one.  This will give you, your project team, management, and your customer a feel for the current status of the project.  You’re identifying potential problems and the reasons they exist.  But take note: the prerequisite for this action is to explicitly define your thresholds (keep them relatively simple) and make sure everyone knows what “significant” is, by communicating the thresholds.
3. Develop and implement corrective actions.  This is your chance to course correct the project.  Why review the variances if you’re not going to do anything about them, right? Also, corrective actions should be agreed upon by the management team.  This is one reason it is so important that they have the same reports you’re giving to the customer, and it’s also why they should be getting your EV reporting data on a periodic basis.  Remember that large course corrections must be performed before the project is 30% complete to affect the end result, which means reviewing performance and taking action early on.
4. Review and revise your EAC (Estimate At Completion) as necessary to reflect reality.  Things happen.  People and circumstances change.  The more reality you pour into your EAC, the better to see potential future problems.  You can use your performance to date to enhance your predictability, and as the project marches on, the more accurately you can adjust your EAC based on risks and opportunities.  It’s really best if you perform this exercise at least monthly—otherwise the effort can get overwhelming and feel like a rebaseline.
5. Put all of the above information into a report.  This formalizes your EVMS process and your data, and allows you to distribute it to the right people for more effective communication.

You may have noticed I left out the analysis and reporting of indirect costs.  In a non-certified EVMS, the indirect costs tend to be a bit of an afterthought.  It’s still important, but the department or program manager can work with accounting to look into any variances easily enough, so I personally wouldn’t put too much energy into it.

A bit of caution: it is common for the untrained manager to want to jump straight to analysis and reporting without properly setting up the framework for an EVMS.  Then they scratch their heads when the analysis doesn’t make any sense, and decide that Earned Value has no value.  That’s a shame.  He or she needs to be educated, because—as with many valuable tools, you get what you put into it.  This is also a fancy way of saying (GIGO) Garbage In Garbage Out. 

All of the items I mentioned can be done “offline”, in MS Excel or Word, but that’s a bit cumbersome and creates room for additional errors as well as making only a select few responsible for maintenance (i.e. no vacation for them…).   When considering an EV software solution, look for how it helps you track the project and what it does to make your life easier.  Allow the EV software do the work for you, such as creating graphs, project status reports, and variance analysis reports. That will allow you to focus on the more important things, like managing the project.

How do you perform analysis and reporting on your project?  Do you have any favorite or dearly hated reports?  Please share in the comments.  And check out my next blog, where I’ll take a peek at the most beneficial ANSI criteria for Revisions and Data Maintenance.

- Melissa Duncan (About Melissa)

Read the previous posting - Right Sizing: Finding the balance between Accounting’s "numbers" and Your EVMS

Subscribe to Blog  

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
EAC=Estimate At Completion  

EVM=Earned Value Management

EVMS=Earned Value Management System

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