1. CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved CSE7315M30 Slide 1 August 13, 2006 SMU CSE 7315 Planning and Managing a Software Project Module 30 Managing with Earned Value / Measurement Issues

2. CSE7315M30 Slide # 2August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Objectives of This Module To discuss how to manage a project using earned value measures To discuss some measurement issues

3. CSE7315M30 Slide # 3August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Managing with Earned Value

4. CSE7315M30 Slide # 4August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved BCWS (Budgeted Cost of Work Scheduled) The amount of effort you had planned to expend (i.e., the amount you budgeted) “How much work should have been done” BCWS

5. CSE7315M30 Slide # 5August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved BCWP (Budgeted Cost of Work Performed) The value produced for the effort you have actually expended What you have earned “How much work was actually done” BCWP

6. CSE7315M30 Slide # 6August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved ACWP (Actual Cost of Work Performed) The amount of money you have spent so far The “actual” cost “What did your work cost?” ACWP

7. CSE7315M30 Slide # 7August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved What Can We Tell About the Schedule From These Three Numbers? SV - Schedule Variance SV = BCWP - BCWS SPI - Schedule Performance Index SPI = BCWP / BCWS Negative means behind schedule Less than 1 means behind schedule

8. CSE7315M30 Slide # 8August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved SPI Indicates Whether You are Ahead of or Behind Schedule Ahead of Schedule Behind Schedule

9. CSE7315M30 Slide # 9August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved What Can We Tell About the Cost From These Three Numbers? CV - Cost Variance CV = BCWP - ACWP CPI - Cost Performance Index CPI = BCWP / ACWP Negative means over budget Less than 1 means over budget

10. CSE7315M30 Slide # 10August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved CPI Indicates Whether You are Under or Over Budget Under Budget Over Budget

11. CSE7315M30 Slide # 11August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Variances on Graph Schedule Variance Cost Variance

12. CSE7315M30 Slide # 12August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Three Useful Numbers BAC - Budget at Completion – The total budget for the project – BCWS at project completion (BCWS BAC ) SCHED - Schedule for the project – The total number of weeks or months or years planned for the project EAC - Estimate at Completion – Your estimate of actual project cost (ACWP EAC )

13. CSE7315M30 Slide # 13August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved EAC - Your Estimate of the Final Cost This is your estimate of the final project cost, based on your insight on the project. – Perhaps you know that performance to date is higher or lower than is likely in the future This is a judged value

14. CSE7315M30 Slide # 14August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Independently Estimated Cost At Completion IEAC - Independent estimate of the project cost at completion – The projected cost of the project, based on performance so far IEAC = BAC / CPI – Note that this may be different from your estimate. This value is based on facts

15. CSE7315M30 Slide # 15August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved How Much Over or Under? VAC - Variance at Completion VAC = BAC - IEAC or VAC = BAC - EAC Negative means over budget by this much

16. CSE7315M30 Slide # 16August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Schedule At Completion ISAC - Independent Schedule at Completion – The projected schedule of the project ISAC = SCHED / SPI SVAC - Variance at Completion SVAC = SCHED - ISAC Negative means behind schedule by this much

17. CSE7315M30 Slide # 17August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Thus You Can Tell... How far behind or ahead of schedule you are How far over or under budget you are What your eventual schedule and cost are likely to be You also have an early warning of trouble that you can use to try to fix the underlying problems

18. CSE7315M30 Slide # 18August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved A Handy Graph of SPI and CPI Indicates Your Overall Status SPI CPI

19. CSE7315M30 Slide # 19August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Reasons for Being Behind Schedule If you are also Under Budget – There is not enough work being done Not enough people People being used for other tasks If you are at or Over Budget – There is a productivity problem Underestimation of the effort Excessive “non-value-added” work

20. CSE7315M30 Slide # 20August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved You Can Set Control Limits and Thresholds for Earned Value Just as you can for many other quantities Usually based on history from previous programs – Acceptable variation is established by the behavior of programs that did not get into trouble This is typically done by mature organizations with good historical data. At lower levels of maturity, you lack the data to set useful limits.

21. CSE7315M30 Slide # 21August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Control Limits on SPI Chart Upper Control Limit Lower Control Limit

22. CSE7315M30 Slide # 22August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved What Are Your Chances of Meeting Your Budget? If CPI or SPI is outside of the control limits, it means you are under or over performing to a degree that means corrective action is necessary But also look at trends - they can indicate potential problems in the future

23. CSE7315M30 Slide # 23August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved What If the Budget Changes? Sometimes projects adjust budgets and goals – In light of clear evidence that previous budgets & goals cannot be met – Or due to changes in goals or requirements – Or due to changes in commitments – Or due to changes in resources – … How does this effect earned value?

24. CSE7315M30 Slide # 24August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Responding to Budget Changes You can continue to track against the original plan, but show new estimates on the same graphs You can “replan” – Re-compute BCWS and other values affected by the change and compute earned value against the new plan – This is recommended if the new budget is significantly different

25. CSE7315M30 Slide # 25August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved What If You Are Asked to Recommend The Adjusted Budget? Suppose, in light of clear evidence that previous budgets & goals cannot be met, you are asked to estimate the likely cost and thus the recommended new budget? How do you know if the change is enough? (next slide)

26. CSE7315M30 Slide # 26August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved “To Complete” Performance Index Let BAC be your original budget and EAC be your estimate of actual cost Then TCPI = (BAC-BCWP) / (EAC-ACWP) (work left to do / money left to spend) This tells you how you must perform in order to meet your estimate (EAC)

27. CSE7315M30 Slide # 27August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Using TCPI (To Complete Performance Index) TCPI = (BAC-BCWP) / (EAC-ACWP) If TCPI is outside the control limits (i.e., not very close to 1.0), it indicates that, if you continue to perform as you have in the past, you are unlikely to meet the EAC estimate – So you must change the goal – Or take other corrective action

28. CSE7315M30 Slide # 28August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved EAC or IEAC? You can compute TCPI using either version of EAC. IEAC assumes your past performance on the project is a reliable guide – generally recommended after 15-20% complete EAC assumes you have information that is more reliable than past performance

29. CSE7315M30 Slide # 29August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Summary Earned Value Can... … tell you your true status … give you an effective schedule / budget outlook … help you understand the reasons why if you are not meeting your plan If the estimates are developed by the workers, they are more likely to “buy in” to the results

30. CSE7315M30 Slide # 30August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Summary (continued) Various indices can be computed to tell you things about your project, such as: – Projected cost or schedule – Performance level required to meet a specific goal (original budget or revised budget)

31. CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved CSE7315M30 Slide 31 August 13, 2006 Measurement Issues

32. CSE7315M30 Slide # 32August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Measurement Issues Frequency Synchronization Updating estimates Margin Peak vs. average Units Interplay of resources

33. CSE7315M30 Slide # 33August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Frequency How Often to Measure Too often results in high cost, disruption of process Too seldom results in failure to see problems soon enough Frequency should depend on degree of risk and cost of measurement

34. CSE7315M30 Slide # 34August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Synchronization Getting the True Picture

35. CSE7315M30 Slide # 35August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Update Projections and Estimates

36. CSE7315M30 Slide # 36August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Margin A Frequently Misunderstood Term What does “leave 50% margin” mean? Code Margin 66 2/3 50 100 Code Margin

37. CSE7315M30 Slide # 37August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Peak vs. Average “Software must be able to handle 100 screens per minute” Peak? (Worst Case) Average over Some Interval? How Often to Measure?

38. CSE7315M30 Slide # 38August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Units Often Subject to Misinterpretation Memory Size: words, bytes, bits??? Program Execution Time: – Hours since shipped? {was it delivered?} – Hours since received by customer? {was it installed?} – Hours since installed? {was it used?} – CPU execution time since installed? CPU Time: cycles, instructions, MIPS, FLOPS, ? Beware of innocent misinterpretations

39. CSE7315M30 Slide # 39August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Interplay of Resources Few Things Happen in Isolation Sometimes, system resources interact with each other, giving misleading evidence of performance Memory Capacity: 80 cycles per micro- second CPU 50 MIPS I/O Channel 20 MIPS Display 40 MIPS CPU may run at only 20 MIPS because of memory saturation

40. CSE7315M30 Slide # 40August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved Summary of Measurement 1) Know WHAT you are measuring - attributes, etc. 2) Know WHY you are measuring - goals, risks, etc. 3) Select wisely – Complete - something for each part of the process – Reasonable cost of collection – High information content – Minimal organizational disruption 4) Beware of incorrect interpretations 5) Beware of misuse “Nobody believes statistics anyway.” Adams, The Dilbert Principle “Nobody believes statistics anyway.” Adams, The Dilbert Principle

41. CSE7315M30 Slide # 41August 13, 2006 CSE 7315 - SW Project Management / Module 30 - Managing with Earned Value / Measurement Issues Copyright © 1995-2006, Dennis J. Frailey, All Rights Reserved END OF MODULE 30