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Predicting Completion in Agile & Distributed Projects

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Patrick Weaver
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Our latest paper, Predicting Completion in Agile & Distributed Projects, has been published in the June Project Management World Journal (PMWJ).

This paper is part of an ongoing mission to develop a general solution to the challenge of reliably predicting the expected completion date in projects where CPM and EVM are not being used. Our previous paper, Scheduling Challenges in Agile & Distributed Projects identified two general types of project, where CPM does not work as an effective controls tool, soft projects and distributed projects.  In both types there is no one ‘best way’ of completing the work, the sequence can be easily changed as needed. And, when development methodologies such as Agile are used, there is a deliberate intention to let the project team, in consultation with the client, decide what is best to work on next. This is the antithesis of a predetermined logical sequence of work that is expected to be followed and can therefore be represented in a logic diagram.

Earned Value Management (EVM) can work in these situations, which introduces Earned Schedule (ES) as a viable option for predicting completion. Unfortunately, EVM is rarely used most normal projects and ES is an extension to EVM.

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wpm_outputs.jpg

The solution we are proposing is Work Performance Management (WPM). WPM adopts a similar approach to ES, but is a self-sufficient tool, it can work without a schedule, or EVM. All that is required to run WPM is:

  1. An impartial measure of the work planned to be accomplished distributed over the project duration.
  2. An assessment of the work achieved to a point in time using the same metric.

The WPM spreadsheet does the rest.  The results from a sample project are in the diagram above.

The paper Predicting Completion in Agile & Distributed Projects, outlines the theory and practice supporting WPM.  The spreadsheet, sample projects and instructions on using the WPM spreadsheet can be found at: https://mosaicprojects.com.au/PMKI-SCH-041.php#WPM

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Rafael Davila
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No matter how old the concept of EVM it has not gained much popularity.  At home construction contractors do not use it and believe it to be a waste of time and money.

Earned Value Method as a tool for project control However, if to be implemented, the method should be used according to its purpose: it is not a tool for forecasting; instead, it facilitates progress monitoring, determination of project status (on time? to budget?), identification of potentially negative occurrences and a rough estimate of their combined effect on the project’s outcome. If the project is to be managed consciously, these occurrences should be then investigated into by means of more accurate methods.

• The real situation may be distorted.

• Project managers are motivated to do expensive jobs ASAP and cheap jobs ALAP.

• It does not consider if activities that were performed were critical or not. An S-curve is a result of schedule logic. On the level of activities, projects tend to have many paths, some of them critical, other not. A tiny (if compared to total project duration) schedule variance of an activity can become a cause for substantial rearrangements in the project network, it can change critical path or order of activities, enforce a total reorganization of works. This cannot be captured by either Earned Value or Earned Schedule calculations - potential problems might be masked by compensating positive and negative schedule deviations.

• Managing a schedule without considering float is a flawed approach, EVM does not consider float.

• EVM does not consider project risks.

• EVM is very dependent on a schedule baseline that in most cases is continuously changing, comparing actual conditions with an obsolete baseline does not make much sense.  To keep Baseline variance can be a monumental/impossible task in complex schedules.

• The Earned Schedule approach, though better suited for assessing schedule status than Earned Value, rests upon the same simple model of a project: a time-cost S-curve. The method’s calculations can be done on any level of a work breakdown structure (from simplest activities to project stages) in exactly the same way. For the sake of accurate progress estimates (PC), it would be advisable to analyze the project on activity level.

• However, an S-curve is a result of schedule logic. On the level of activities, projects tend to have many paths, some of them critical, other not. A tiny (if compared to total project duration) schedule variance of an activity can become a cause for substantial rearrangements in the project network, it can change critical path or order of activities, enforce a total reorganization of works. This cannot be captured by either Earned Value or Earned Schedule calculations - potential problems might be masked by compensating positive and negative schedule deviations.

The cult like promotion of many EVM proponents and not acknowledging that the methodology is of limited value creates misunderstanding of what EVM really is. Those who use it as well as those considering its use shall know the limitations.

Requiring EVM for firm-fixed-price (FFP) contracts and subcontracts of any dollar value is discouraged by the US Department of Defense as well as many other Agencies. SUBPART 234.2  EARNED VALUE MANAGEMENT SYSTEM(iv) For firm-fixed-price contracts and subcontracts of any dollar value - (A) The application of earned value management is discouraged …. DEPARTMENT OF DEFENSE EARNED VALUE MANAGEMENT IMPLEMENTATION GUIDE (EVMIG) - DOD EVMIG-01-18-2019.pdf  2.2.2.5 Exclusions for Firm Fixed Price (FFP) Contract Type: The application of EVM on FFP contracts and agreements is discouraged, regardless of dollar value.

Tracking quantities (volume of work) gives contractors more detailed information for calculating percent-complete. EVM look only at a single parameter, usually cost, but not at productivity, to determine how a job is progressing. Those numbers don’t always tell the whole story; let’s say our drywall contractor has spent $60,000 to date on a job that has a total budget of $100,000. Based on those numbers, the job is 60% complete. However, a production report shows that 16,660 LF of wall has been completed to date, and the finished job calls for 33,320 LF. Therefore, no matter what the costs say, the job is only 50% complete.

Of all cost control systems it might be argued EV is the dumbest; The Air Force’s $10,000 toilet cover - The Washington Post  If using EV Air force toilet cover: ACWP 10,000$ - BCWP 10,000$ - BCWS 10,000$  If using Unit Cost you get a better picture: Air force toilet cover: Quantity Installed 1 ea. - Budget Unit Cost 10,000$ per unit - Actual Unit Cost 10,000$ per unit. EVM may tell you the purchase was within budget but not how dumb the purchase was. If EV is to be used as a cost control tool it should be complemented with more accurate cost methods.

EVM is useless for future estimates.  Detailed cost information is transparent. Work units are what make cost report of value. This is the information we need for future estimates.

EVM jargon is not well understood by those in the field, it is an obstruction to good communication. In the field they do not talk ACWP, BCWP, BCWS, cv, cv%, SV, sv%, CPI, CPI%, SPI, SPI% and the like; they mostly talk about work quantities, resources and production rates.

In such projects resource constraints and user defined task priorities determine project schedule and Resource Critical Path.

If resource availability or task priorities change the schedule is automatically adjusted if right tools are used.

The best way can be calculated by PM software that can optimize resource constrained schedules taking into account all existing constraints.

Earned Value and Earned Schedule are not reliable in such projects.

Risk simulation and management based on trends of probabilities to meet required targets are the best forecasting and decision making tools