Agile PM Processes–2.13 Earned Value Management (1)

John Stenbeck in his book “PMI-ACP Exam Prep PLUS Desk Reference”, he creates an agile project management process grid with 87 processes divided into 5 process groups and 7 knowledge areas.

This post is one of several describing a single process that is essential to controlling an agile project, namely Earned Value Management.   It is labeled 2.13 on the agile project management process grid because it covers the second knowledge area of “Value Driven Delivery”, which monitors how the project manages the constraints of time, cost, scope, and value; it also is the thirteenth process in that knowledge area.   In particular, it is one of the processes done during the “Control” process group in any given project.

The tool of earned value management will requires several posts to discuss; in the first, let me discuss the general utility of earned value management in project management in general BEFORE we discuss how to apply it to agile projects.

The three triple constraints on a project are time, cost, and scope.  There may be additional constraints in terms of quality, risk, etc., but in the end, they all boil down to the three basic constraints.  Earned value management is considered by many in the project management community as the best option currently available for holding all parties accountable for the effective management of large and complex projects.

It does this with three “building block” variables of earned value management:

  • actual cos (AC), which monitors the actual cost of work  done;
  • planned value (PV), which monitors the value of work that is planned or scheduled to be done, and thus is a measure of time or schedule;
  • earned value (EV), which monitors the estimated cost of the work actually accomplished or completed, and thus is a measure of the scope accomplished.

Earned value management takes these three building blocks and calculates cost and schedule variances.

The project manager’s job is to analyze those variances and use to:

  • identify those sources that are enabling or hindering project progress
  • forecast future cost and schedule performance issues
  • define appropriate corrective actions and preventive actions to improve the probability of project success

The basic building blocks, and equations of Earned Value Management are the same in both waterfall and agile projects.   The next post will compare the similarities between the process of EVM and EVM in an agile environment, which we will abbreviate by A-EVM.



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