Collaborating for Successful Evm: Five Fundamental Roles

COLLABORATING FOR SUCCESSFUL EVM: FIVE FUNDAMENTAL ROLES

ESI INTERNATIONAL | WHITE PAPER COLLABORATING FOR SUCCESSFUL EVM: FIVE FUNDAMENTAL ROLES

1 ABSTRACT 14 EMBRACING EVM BASICS AND INCREASING COLLABORATION 2 INTRODUCTION 15 NEXT STEPS 3 DEFINING SKILL AREAS 15 REFERENCES 4 PLANNING FOR COLLABORATION: FIVE ROLES 16 IMPORTANT EVM DEFINITIONS AND 4 1. Responsibilities at the Executive Level ABBREVIATIONS 6 2. Responsibilities in Project Management 17 THE ESI SOLUTION 9 3. Responsibilities in Contract Management 11 4. Responsibilities in Requirements Management 13 5. Responsibilities in Finance and Accounting

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ABSTRACT

Planning, measurement and control have always been the basic tenets of successful project management. Unfortunately, for many organizations, these principles can be difficult to put into action. In the U.S. federal government, the Office of Management and Budget (OMB) has mandated the use of Earned Value Management (EVM)—a highly collaborative approach to progress measurement—as a method of tracking project performance to help agencies meet their project goals. The commercial world has also begun to adopt EVM practices toward that same end, and in hopes of improving the project management maturity level of organizations. While the concept itself is fairly straight forward and has been in use for some time now, successful EVM requires action and cooperation from virtually every person who touches the project. This paper outlines the five key areas of responsibility in EVM and examines the need for these roles to work together and, ultimately, utilize the process for its true purpose—helping projects succeed.

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INTRODUCTION

With an aim of detecting performance problems early and saving substantial time and money, Earned Value Management (EVM) is the measurement of value earned within a project as work progresses. In other words, EVM measures the value of work completed in terms of the original cost estimate, or in the simplest terms, performance against plan. It requires detailed, defined plans for all work and constant evaluation and analysis as the work is completed. EVM success rests on the integration of a combination of skills and the sharing of knowledge and information. This, unfortunately, has made successful implementation difficult to accomplish for many organizations.

In order for a project to be successful, the project team must skillfully define requirements, estimate effort and cost, schedule the project, manage risk and control quality. In a well-run project, the triple constraints of time, cost and scope are clearly defined at the beginning of implementation, and the project manager and team then monitor and control activities against that clear definition (baseline). The project team needs to consider multiple factors in exercising control, including spending and productivity, the status of the critical path, the risk situation, change requests and the business case. Typically, great emphasis is placed on tracking the budget and overall work progress—enter EVM.

EVM has consistently helped organizations produce better projects and save money. However, the EVM process can be a difficult one to master. Two of the biggest reasons that EVM is not working— or not working as it should—are: 1) The absence of sound execution of project management and other fundamental organizational practices, including time and expense tracking and prompt financial reporting 2) A lack of collaboration between the people in roles responsible for project management and other fundamental organizational practices

This paper provides you with an in-depth look at the inter-related organizational functions that must cooperate effectively in order to achieve EVM success. EVM implementation requires organizations to examine these functions in a new way, as well as ensure that everyone filling a key role has the proper skills. Organizations must also ensure that their practices and appropriate systems and tools are in synch. You’ll learn how to create, maintain or redefine these roles in your own organization, ultimately turning EVM into a time and money saving process, rather than the impractical system with which so many companies struggle.

In late 2005, the OMB embraced the EVM methodology as standard practice across every U.S. federal government agency. With the mandated use of EVM, a government project is considered successful only if reports show no more than a 10 percent variance from the projected cost and schedule (Perera).

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DEFINING SKILL AREAS

Every organization is unique, and titles within each can vary significantly. A short list of possible titles for those involved in the EVM process might include:Project managers • Functional managers • Financial analysts Need to learn the EVM language? Find an EVM glossary on page 17 Accounting specialists • of this white paper. • Business analysts • Management analysts • Acquisition managers • Planners and schedulers • Integrated project team members • Contracting officers • Software developers • Systems engineers This list is by no means exhaustive. While it illustrates the wide variety of positions involved in the EVM process, it is important to keep in mind that titles are not the linchpin for success. In the EVM process, what matters most are the key skill and responsibility areas (roles). In any project employing EVM, five key roles must be successfully performed: • Executive support • Project management • Contract management • Requirements management • Financial management These skill and responsibility areas are essential to successful EVM implementation in an organization. Unfortunately, they are often lacking or working in isolation. Knowledge is not being shared. Measurement and analysis are, thus, limited and incomplete.

Improving the collaboration of these key areas will improve project performance and turn EVM into what it’s designed to be—a means for more successful projects.

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PLANNING FOR COLLABORATION

Ask anyone to summarize their ideal project in one word and this is what you will likely hear: Predictable. Planning and predictability are the foundation of the discipline of project management—and of solid business practices in general. EVM seeks to reinforce and strengthen this foundation.

As an example, consider a hypothetical organization working to develop and implement a new human resources (HR) software application in their HR department. The current software lacks reporting capabilities as well as several other crucial features—causing this department’s productivity to suffer. They’ve been using the same antiquated system for 10 years and it doesn’t have the capabilities to serve the organization any longer. The Vice President of HR determines the need for new software, then assigns a project manager to the task. In turn, the project manager must find individuals (or a team) to manage requirements and contracts for the project. Using sound project management practices supported by clear organizational standards, each individual piece of work is assigned to a team member and given a schedule and budget allowance. Then, using EVM, work progress in both cost and schedule terms are measured against plan. It is in this way that the team can ensure predictability and, ultimately, success.

At each point in the implementation of the project above, the EVM process requires that the following data be collected and analyzed: 1) An accurate itemization of work performed to date (a view of schedule performance) 2) The planned cost of the work performed (a view of the budget for the work performed) 3) The actual cost of the work performed (a basis for determining cost variance from plan)

The EVM reporting and assessment process is conceptually the same at all levels of an organization. Only the level of granularity in reported information varies (Lambert and Lambert). Everyone from project managers to agency directors and C-level (i.e. CEO, CIO) executives needs to understand how to respond to the implications of these reports—it truly needs to be a team effort.

1. RESPONSIBILITIES AT THE EXECUTIVE LEVEL Top management commitment is key in EVM. The commitment of senior management should be written and well publicized as a method of encouraging and supporting the process. If an organization perceives EVM as a complicated process that causes a great deal of “extra” work, the chances of successful implementation are greatly reduced. It is up to those at The commitment of senior management the executive level to assure should be written and well publicized as a their teams that this is not the method of encouraging and supporting the case—and that what is required process. is going to be worth their time in the end.

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In an ideal scenario, upper-level management has seven key responsibilities in ensuring successful EVM implementation within their organization: 1) Validate the need for EVM. It is the executive’s job to determine the original need for EVM implementation on a project. She must get the ball rolling. 2) Read and understand EVM reports. As the project progresses, the executive continues to play a vital role. Upper-level management is receiving EVM reports weekly or monthly from the project manager. It is essential that the executives know both how to read and how to interpret these reports. Executives have made the mistake of disregarding such reports— either because they don’t believe in their value or because they don’t know how to analyze them. This essentially negates the practice of EVM. 3) Know what questions to ask. The executive level needs to know which questions to ask the project team in order to ensure the accuracy of the reports. This better enables executives to report project information “to the top.” 4) Stay tough. The executive level needs to stay tough when it comes to EVM. If an executive notices that reports are lacking information or are coming in late, it is her job to bear down and demand better work from the project team. Let’s look again at the hypothetical organization implementing that new HR management system. If the data is on time but is discouraging from a schedule point of view, this might mean it’s up to the executive sponsor to ask the project team for revised dates she can pass on to the HR team. In this situation, the executive may also have to help the project manager make specific decisions about priorities. 5) Promote EVM as a project management tool. For any project performance measurement system to be successful, it must be accepted by the project team. It’s essential that the executive level of the organization promote EVM—and truly consider it—as a way to measure projects, not individuals. As EVM analysis gives such insight into projects, many employees and contractors view it as an evaluation of themselves. Management must focus on the use of EVM to measure project data only, and never apply this data to individual employee or contractor evaluations (Brandon).

It’s essential that the executive level of the organization promote EVM—and truly consider it—as a way to measure projects, not individuals.

6) Support the finance team. Another top priority for upper management is the involvement and encouragement of the accounting or finance team within the organization. In many cases, this team has the responsibility of aggregating and reporting EVM data. They will very often be charged with compiling EVM reports and, therefore, must understand the importance of these documents. It is the responsibility of the executive to convey this information and to ensure that the accounting or finance team has the resources to take on this endeavor. 7) Encourage EVM training. It’s crucial for the executive to realize and act on the fact that without the right skills to perform the many tasks associated with the process, no one will be able to determine the value. The responsibility of ensuring proper EVM training falls on the executive. These decision-makers need to support an open information exchange at the heart of their organization’s EVM process.

In theory, executives should be in favor of EVM. It tells them immediately if a project (and therefore, the organization’s money or performance) is in jeopardy. Unfortunately, in practice, their support often is either unclear or, in time, diminishes or disappears completely. If the executives themselves don’t buy into the process, their project teams won’t either. If they’ve done their research, these

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upper-level managers know that the benefits of EVM can be substantial. Most projects outside of the U.S. government (and inside, for that matter, until recently) had been monitored simply on an overall schedule and total cost basis. With EVM, these factors still matter significantly, but it’s the incremental progress view that’s really key. Many executives are seeing that this gives them a great deal more information.

2. RESPONSIBILITIES IN PROJECT MANAGEMENT The project manager plays one of the most crucial roles in the EVM process. He has the most direct influence on implementation and must take day-to-day responsibility to manage the team as it employs EVM. All projects require constant monitoring and control by the project manager, as well as potential corrective action, and EVM supports this need effectively.

Key Tasks The project manager must both manage the overall project and be able to manage the work- element level by acquiring information about project performance from the systems put in place to gather and accumulate the data. The data, in turn, must be provided by individuals and organizational components performing project work and consuming project dollars.

The project manager’s key duties in EVM include: • Ensuring that the work breakdown structure (WBS) is properly structured • Validating the quality of estimates for WBS activities • Working to guarantee adequate and timely progress and expenditure reporting systems are in place and used • Obtaining the proper training for all project participants and supporters in their EVM responsibilities

Planning Planning is the foundation of EVM, and the responsibility of forming an accurate and realistic project plan—not an easy task—falls explicitly on the project manager and project team. As each project is unique, planning time and effort will vary. It’s crucial, however, to understand that EVM may demand more planning effort than is customary in a given organization. Extra time for this must be embedded into the project schedule from the outset. The upside is that the implementation cycle will typically be smoother, and the overall project life cycle is frequently reduced.

After requirements have been gathered (either by the project manager, or by a separate requirements manager or business analyst), a WBS is established. This designates the work to be completed for the project. Within the WBS, subsets of the work are broken out. For example, Figure 1 shows levels 1 and 2 of the WBS for our HR software project.

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FIGURE 1: WBS FOR HR SOFTWARE PROJECT

Develop HR Level 1 Database and Sofware

Create space for notes Capture and transfer Create new reporting Level 2 and employee all existing data capabilities Functional evaluations

Discrete elements of work are the basis for measuring progress in both budget expenditure and schedule performance. The project manager uses the Performance Measurement Baseline (PMB) that is created from the WBS to compare planned progress with actual progress. Budgeted cost of work scheduled (BCWS), or planned value, for each work element is the plan for all work and the basis for measuring progress.

The project manager must also ensure that responsibility areas for each work As day-to-day work is accomplished element are designated very early at the work-element level, on. This includes determining who communication is essential. A detailed will be in charge of requirements communications plan should be in management and contract place before work begins. management. As day-to-day work is accomplished at the work-element level, communication is essential.

A detailed communications plan should be in place before work begins. In any project, many individuals play a role and must share information. EVM adds to this challenge as it requires detailed documentation of the work being performed at every stage, by every individual. The project manager also needs to determine the level of WBS granularity to be used for estimates and progress tracking, generally at least a level below the two levels shown on Figure 1.

Reporting From these work elements, the project manager must determine how progress will be reported. A major challenge is determining the appropriate level of detail for reporting performance. Implementing EVM at too low a level of detail can cause almost as many problems as having no performance measurement system at all. To establish the appropriate level of detail, the project manager must look at factors stemming from the type of project to be completed, including size, level of risk and degree of upper management involvement. Much of this information will come from preliminary requirements gathering. In any case, the organization should develop standard expectations that take into account nominal project size, work familiarity, procurement situation

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and risk, at a minimum. These standards To establish the appropriate level of detail, can be used by the project manager the project manager must look at factors as a litmus test, and will also allow stemming from the type of project to be executives to validate the project completed, including size, level of risk and manager’s approach. degree of upper management involvement. The project manager then must decide how to describe the amount of work completed. There are several conventions used to designate the progress of a task. One of the most popular is the 50-50 approach. Fifty percent completion is assumed when the task starts, and the remaining 50 percent is awarded when the work has been completed and the results are demonstrable. Another convention is the 0-100 percent rule, in which no “credit” is given for work until it is 100 percent complete (Meredith and Mantel). In these cases there really is no “estimation” of the status of the task. In other approaches, an actual “estimate” of completion status may be required in order to complete the EVM report for a particular period. Generally, the approach for a particular project will be decided upon at the outset and applied to all work on the project.

Equally as destructive as the wrong level of detail can be inaccurate reporting. It is, unfortunately, very possible to “fib” with EVM. Team members can manipulate the system by: • Padding the schedule • Pushing problem tasks forward • Bumping the task completion percentages • Re-baselining the project • Integrating EVM late (Yates) It is the project manager’s job to make sure the team’s figures are free of mistakes and are honest.

Collaboration and organization-wide standards and methodologies can help prevent inaccuracies from taking over and, ultimately, ruining a project (Yates). In addition to developing standards and a methodology, the organization needs to ensure that appropriate systems are in place to complete the required data collection (time and expense reporting, for example) and manipulation necessary to develop the EVM reports. However, it’s ultimately within the project manager’s domain to ensure the credibility of his team’s reports.

Collaboration with Other Team Members Successful implementation of EVM is highly dependent on the active cooperation of an organization’s accounting or finance team. It is essential that the project leader understand the accounting function and the processes of gathering and reporting data. The level of involvement between the project manager and the accountants will inevitably vary from organization to organization;

however, cooperation is essential. It is helpful for the project manager to not only understand, on a basic level, how the finance personnel fit into the EVM process, but also to develop a rapport with this group. Their involvement and understanding of EVM can make or break the reporting portion of the process.

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While the project manager plays a major role during the entire EVM process, other team members play integral roles throughout as well. The project manager must ensure each team member understands and adheres to the EVM process from start to finish.

Action Items for Project Managers: • Plan, plan, plan. • Factor EVM into your WBS planning. • Ensure your team understands their individual tasks and has the resources to comply. • Decide how you will handle reporting. • Meet with the nance team to discuss your new needs in iimplementing EVM practices.

3. RESPONSIBILITIES IN CONTRACT MANAGEMENT One of the reasons EVM is so valuable is that it supports the early identification of potential issues and pinpoints areas for corrective actions (Cleland and Ireland).

As planned value is an essential component to a successful EVM process, it is critical that the contract manager clearly define all of the work scope intended for any contract. In order to do so, participation by the contract manager during the early stages of the life cycle is essential. As the necessary planning is accomplished and the need for outside resources is solidified, the contract manager begins work to procure these resources.

Adhering to Specifications A contract written for a project employing EVM must include requirements for EVM reporting by the contractor. If not, the entire process will be out of alignment. It is the contract manager’s job to ensure that his or her contractors know ahead of time the tasks that are now required from EVM (Damare and Peterson). Specifically, they must know what data—and in what form—they are expected to report.

For example, if our HR software project team contracts the testing portion of the project, the vendor needs to know before any work begins what is expected of her team to stay in alignment with the organization’s EVM process. Do they need to send weekly or monthly status reports? Once timelines have been determined, what information needs to be included for reporting purposes?

These questions must be addressed by the contract manager within the procuring organization and need to be well-documented within the contract itself. However, the contract manager’s job doesn’t end once the contract is signed—particularly in EVM. The appropriate management and administration of contracts is crucial to successful EVM.

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Communication The contract manager should always be in close communication with the project manager because the reporting cycle for the project depends on the buyer’s needs (Abba 2003). Cycle time should also consider other stakeholders, such as subcontract relationships and the external customers’ needs for information. Additionally, if a problem arises with The contract manager should always be the contract—such as a contractor not in close communication with the project delivering or providing deliverables manager because the reporting cycle late—the contract manager must come for the project depends on the buyer’s back into the forefront of the project. needs (Abba 2003).

Planning Contract managers need to be realistic about what information they can actually acquire and when they can acquire it. The planning in EVM can get so specific that even the slightest error in reporting timelines can throw off the process significantly.

Contract managers need to ask: • Do my plans include sufficient detail to track the work that is actually accomplished? • Is responsibility for doing and reporting the work assigned and agreed to? • How long does it take to get actual costs? • Are these costs in a format that can be allocated to individual work elements? Project management and contract management communities are collaborating to embrace EVM in a unified way (Abba 2004). Little by little, these groups are realizing how much they need to work together in implementing EVM to ensure better visibility of project progress. Effective, well-planned contract and project management is crucial to this process. Yet, the next component we will discuss—requirements gathering and management—can also make or break the entire process.

Action Items for Contract Managers: • Clearly de ne the project’s work scope in the contract. • Design the contract to include EVM requirements. • Keep up to date on what is expected of your team and the contractors with whom you’re working. • Communicate continually with both your contractors and your project manager. • Be ready to step up at any time if a problem arises.

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4. RESPONSIBILITIES IN REQUIREMENTS MANAGEMENT The requirements specialist, or a business analyst, handles the “translation” between users and stakeholders and the project team. Ideally, a specialist trained specifically in requirements is available, but sometimes the project manager will fill this role. Other times this role is played by an IT or systems specialist. Regardless of who performs this vital function, certain aspects of the role shift when an EVM system is in place.

The business analyst’s role does not effectively change when working with EVM. However, if the person in this role isn’t collecting requirements at the appropriate level of detail, EVM reporting simply will not be successful. Early on in any project, the business analyst will talk to the project manager (and perhaps the executive sponsor) to understand the project’s focus and purpose. She will then begin the process of gathering and documenting requirements. In many organizations, unfortunately, the requirements simply are not a point of emphasis. This leads to a poor WBS— which ultimately leads to the demise of EVM.

For our HR software project example—as with almost any project—this is a complex job. It’s essential to learn every detail of what the users expect. What data does the current system work with? What extra data do they need to capture and maintain? What reporting capabilities are necessary? The business analyst for our new employee database system would sit down with the stakeholders and users to determine these specific needs. She might learn, for example, about the need for improved reporting capacities. Another requirement might be extra fields in the database for The business analyst’s role does not employee evaluations—something effectively change when working with previously kept in paper files because EVM. However, if the person in this role the system didn’t allow for it. Further isn’t collecting requirements at the discussion would lead to the specific appropriate level of detail, EVM reporting types of reports this group would like simply will not be successful. to run—for example, a report showing salaries or types of insurance.

Time required for requirements elicitation, analysis and documentation can be considerable. This is one major area in which the project manager and the business analyst need to communicate extensively. As the project manager begins to plan the project life cycle and the individual tasks, he must have an understanding of the requirements timeline, including how long it will take to gather, document and analyze them.

After the business analyst completes the process of gathering and documenting requirements for the project, she must come to conclusions from this information. For instance, one conclusion about our HR software project might be that while data is being transferred, any new employee information must be included in both the new and the legacy versions, thus requiring extra work.

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Action Items for Business Analysts: • Collaborate with the project manager from the very beginning to understand needs and manage expectations. • Ensure that the requirements are accurately incorporated into the WBS. • Continue to be involved for the duration of the project as a change manager.

From the requirements gathered and conclusions reached, the project manager must compile each level of the WBS. Precision and detail are crucial. The analyst will also be called back in if requirements—and, thus, the project’s scope—change. Level 3 of the WBS, as shown in Figure 2, is typically based on the requirements gathered during this stage.

While, again, the business analyst’s role does not significantly change in an EVM project, gathering and document requirements effectively remains a key driver to success.

FIGURE 2: WBS FOR SPECIFIC WORK ELEMENT: TRANSFERING EXISITNG DATA

Develop HR Level 1 Database and Sofware

Capture and Level 2 transfer all existing data

Create space for notes Capture and transfer Create new reporting Level 3 and employee all existing data capabilities evaluations

Names Addresses Social Security Start dates Level 4 Numbers

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5. RESPONSIBILITIES IN FINANCE AND ACCOUNTING The development and utilization of an appropriate financial management system, including appropriate IT support, is essential to effective EVM implementation. Expenditures of every kind, from labor to capital equipment, must be tracked and linked to the coding structure defined by the WBS of each project. The data needs to be available in a timely fashion, and must be accurate.

The only way for finance and the project teams to work effectively across an organization is to ensure that The only way for finance and the standards are defined and adhered to for all projects. An project teams to work effectively ad-hoc approach from one project to the next will not across an organization is to ensure work. that standards are defined and adhered to for all projects. An ad-hoc In addition, the WBS expectations and reporting approach from one project to the procedures must be incorporated into the contract next will not work. environment so that contractors and organizational personnel and processes are all working from a common set of expectations. Ideally, common—or, at a minimum, compatible—systems should be used by all participants in the project environment, including scheduling tools, cost tracking and reporting software, accounting systems, and EVM calculation software.

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EMBRACING EVM BASICS AND INCREASING COLLABORATION

EVM is an inherently collaborative endeavor. Any organization that has tried to implement EVM without this collaboration can attest that it simply will not work. When in doubt, go back to the basics of EVM. Making sure the project, contract, requirements and finance managers are all working together is essential. Equally as crucial is the executive’s role of making sure EVM standards are consistent across an organization. If not, projects evaluated organization-wide will be on different scales, making the comparisons inaccurate.

Additionally, EVM training is a necessity. The intricacies of the process are not the kind any organization can hope to learn by trial and error. EVM implementation requires the cooperation of representatives from multiple organizational components, and getting everyone on the same page can be difficult. Organizations that have invested the time and resources for EVM training have seen substantial benefits in both their project performance and their employee satisfaction (Lambert and Lambert).

It’s also important to realize that these responsibility areas cannot be assigned arbitrarily. All too often, these crucial roles are filled with inexperienced “project managers” or “requirements managers” who may not only lack the necessary EVM knowledge, but who are unable to bring a project to success in general. In order for a project—particularly an EVM project—to succeed, the people assigned to the key roles must have the requisite training and experience to competently execute it. Whether this means training upcoming project, requirements, contract or finance managers or finding them outside of the existing organization, the individual capabilities of those filling collaborative EVM roles is critical to the success of the process.

In order for organizations to get the most from their EVM implementation, they also need to evolve an “EVM culture,” with a strong emphasis on collaboration and executive buy-in. Organizations need to do everything in their power to ensure that all employees understand the EVM process as a whole, not just their individual tasks.

Resistance to change, functional stovepipes and inappropriate success measurement systems within organizations can have an incredibly negative effect on the implementation of EVM. When planning the implementation, organizations must take these potential barriers into consideration. This is an important process that requires significant time and effort on the part of everyone involved—from the accountants to the executives.

Collaboration in EVM is vital to not only complying with EVM standards, but also to the success of projects. If the key roles within your organization have the necessary knowledge and skills to understand that they are working toward a shared objective, the EVM process will evolve into more than a measurement process—it can truly be a means for more successful projects.

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NEXT STEPS

1) Examine the role definitions in this paper. Are the people working with EVM projects in your organization fulfilling the requisite tasks and adhering to the collaborative model? 2) Emphasize collaboration in your organization. Bring your entire EVM team together to discuss barriers holding you back from successful EVM projects. 3) Whether it’s help in building a WBS, managing contracts more successfully, or understanding EVM measurement systems, make sure everyone involved in your organization has the training and support they need. 4) Keep your focus on your organization’s “EVM culture.” Work to cultivate it as an important means to project success.

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Perera, David. “Damage Control.” Govexec.com. January 4, 2006. http://www.govexec.com/ features/0106-01/0106-01admt.htm.

Yates, Tristan. “How to Lie with Earned Value.” CIO Insight. October 22, 2006. http://www.cioinsight.com/ print_article2/0,1217,a=163255,00.asp.

Over 30 years of successfully helping Government Organizations improve project and contract management through innovative training solutions. For more information call +1 (703) 558-3177, email [email protected], or visit www.esi-intl.com. 15 COLLABORTING FOR SUCCESSFUL EVM: FIVE FUNDAMENTAL ROLES

IMPORTANT EVM DEFINITIONS AND ABBREVIATIONS

Understanding the fundamental metrics of EVM needs to be a top priority for everyone involved. Here are a few essential definitions and abbreviations.

Actual Cost (AC)—Also known as ACWP: Actual Cost of Work Performed. Budget at Completion (BAC)—The total estimated value of all work planned through any given level. Control Account Plan (CAP)—A work package with some added features, including the assignment of responsibility (organization/individual) and division, if necessary, into lower-level work packages and metrics for measuring EV performance (milestones, percentage complete, etc.). The sum of the CAPs constitutes the Performance Measurement Baseline. Cost Performance Index (CPI)—Cost efficiency factor. A negative CPI is unfavorable. Cost Variance (CV)—A comparison of the budgeted cost of work performed with the actual cost. A negative variance means the project is over budget. Earned Value (EV)—Also known as BCWP: Budgeted Cost of Work Performed. Time-phased estimated value of completed work through any given level and time period. Earned Value Management (EVM) Earned Value Management System (EVMS) Estimate at Completion (EAC)—Independent cost estimate to complete all work planned through any given level. Integrated Baseline Review (IBR)—An all-encompassing examination of the program. Integrated Master Plan (IMP)—Specific tool used to track and measure successful task completion. Integrated Master Schedule (IMS)—Assigns task relationships and task durations for IMP events. Depicts the work to be done. Over-target Baseline (OTB)—Also known as formal reprogramming. Performance Measurement Baseline (PMB)—Clearly defined project specifications that are used later to monitor and control activities. Planned Value (PV)—Also known as BCWS: Budgeted Cost of Work Scheduled. Time-phased estimated value of planned work through any given WBS level and time period. Schedule Performance Index (SPI)—Work accomplishment efficiency factor. A negative SPI is unfavorable. Schedule Variance (SV)—A comparison of amount of work performed during a given period of time to what was scheduled to be performed. A negative variance means the project is behind schedule. To Complete Performance Index (TCPI)—A comparative used to determine if an independent estimate at completion (EAC) is reasonable. Variance at Completion (VAC)—Forecast overrun or under-run. Work Breakdown Structure (WBS)

Over 30 years of successfully helping Government Organizations improve project and contract management through 16 innovative training solutions. For more information call +1 (703) 558-3177, email [email protected], or visit www.esi-intl.com. ESI INTERNATIONAL | WHITE PAPER

THE ESI SOLUTION

ESI International understands the complexities of implementing EVM within your organization. We offer the training and support your organization needs to ensure successful projects through the use of EVM. Our EVM courses provide comprehensive, cross-functional training focused on the true purpose of EVM—to uncover problem areas in your project before they affect the whole of the project.

Since 1981, ESI International has been successfully helping Government organizations improve their project and contract management through innovative training solutions. In addition to more than 100 courses delivered to all major Federal agencies and most state and local Government entities and educational institutions nationwide, ESI offers several certification programs through our educational partner, The George Washington University. ESI’s project-focused training services include: workshops and seminars, learning reinforcement and validation, individual and organizational assessments and strategic consulting in the areas of government projects, requirements, contracts, and vendor management

ESI can help your organization develop the skills of your EVM team for greater project—and organizational—success.

For more information, please call (703) 558-3000 or visit www.esi-intl.com/government

ESI can help your organization develop the skills of your EVM team for greater project—and organizational—success.

For more information, please call (703) 558-3000 or visit www.esi-intl.com/government

Over 30 years of successfully helping Government Organizations improve project and contract management through innovative training solutions. For more information call +1 (703) 558-3177, email [email protected], or visit www.esi-intl.com. 17 901 NORTH GLEBE ROAD SUITE 200 ARLINGTON, VA 22203 PHONE: +1 (703) 558-3000 FAX: +1 (703) 558-3001

ESI INTERNATIONAL | WHITE PAPER