Agile PM Process Grid-2.13 Earned Value Management (4)


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.

This post is one of several devoted to the process 2.13 Earned Value Management.    The last post covered how to track and report Earned Value Management.   This post will cover the issue of the granularity of reporting.

The biggest difference between calculating planned value in traditional and agile project management is that in traditional project management, planned value is usually calculated as the cumulative value of the work that is scheduled or planned to be completed by a certain point in the project.    The planned value at the end of the project, for example, will just be the amount of the budget of the entire project.

This is true in principle in agile project management, except that the value is calculated, not in terms of dollars, but in terms of the number of stories completed.   This number of stories complete is based on sizing, an agile estimation technique which gives the relative size of the effort given to complete a given story.    In traditional PM, the estimate is based on the absolute dollar value of the work involved in completing a given work package.

The planned value can be based on the roadmap, the release, or a given subset of iterations.   What level of granularity should be chosen?

Just remember that the greater the level of detail of the estimate of planned value, the greater amount of resources required to create that estimate.

A Parable on Estimation:  the Cartographer’s Tale

This takes me to a parable, taken from a short story by Jorge Luis Borges in the collection Dreamtigers.   There is a village in Germany which is well-known as having one of the most ambitious set of cartographers in the country.   They created a map which had a 10,000:1 scale.   They decided to try for 5,000:1 scale map.   They succeeded, and went to go for an even smaller-scale map. 

Eventually, they told the mayor of the town that they were going to go for the ultimate map, a map that was on a 1:1 scale!    They told the mayor that such a cartography project had never been attempted before, and, if successful, would bring tourists from around the country to view it!

The mayor agreed and put all the town’s resources into the creation of the ultimate map.   Many projects that would have been carried out relating to the upkeep of the town were put on hold, in anticipation of the future revenue that the creation of this map would bring.    The mayor said that the map would be revealed to the world at an unveiling ceremony to be held at the Town Hall!    He invited dignitaries from around the country to be there for the ceremony.

On the day the map was created, however, the cartographers came to the mayor with distressing news!    The map was understandably so large that it could not be folded into a shape compact enough for it to even get out of the door of the cartographer’s building.   With no map to show for all the effort, the mayor was embarrassed, and the town’s finances were now known to be in a shambles because the resources had all been used up for the creation of a map which was practically useless.    That night, the cartographer’s building, and the map inside it, burned up in a mysterious fire.   Whom it was set by was never revealed …

Okay, I embellished the short story a bit for dramatic purposes, but the meaning is clear.   The amount of resources put into the map exceeded the actual value that the map was creating.   The example of the map is a reductio ad absurdum intended to show that the VALUE of the estimate to the project must exceed the VALUE required to create it.   So if you only need to go to the level of the release plan, or even a certain subset of iterations that achieve a certain milestone, so be it.   That’s what the level of granularity should be!

Since the measure of planned value is based on the relative value of the size of the effort required, rather than the absolute (dollar) value of the effort, the way that earned value management is expressed can differ between traditional and agile management.

There are other A-EVM measurements than Earned Value (EV), Planned Value (PV), and Actual Cost (AC), and these are discussed in the next post.

 

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