Also known as “Earned Value Consulting” or “EVMS Consulting”. EVM consulting is support services that an expert in Earned Value Management (EVM) provides to an organization to help them implement an Earned Value Management System (EVMS).
A common Earned Value Management System (EVMS) compliance and surveillance review finding are issues with a contractor’s estimate at completion (EAC) process. A credible EAC is essential to successfully manage all contracts and projects.
EACs are important because they provide a projection of the cost at contract or project completion, which is also an estimate of total funds required by the customer. It matters because EACs represent real money. When the most likely EAC exceeds the negotiated contract cost, the contractor’s profit margins may be at risk. It also creates a problem for the customer when the most likely EAC exceeds their funding limits.
We recently updated our blog titled Maintaining a Credible Estimate at Completion (EAC) to highlight why this is a good time to review and potentially update your estimate to complete (ETC) and EAC processes. The updated blog added content specific to:
Incorporating integrated master schedule (IMS) analysis to test the realism of the EAC to identify any disconnects with the cost-based independent EACs (IEACs). It is equally important to determine a realistic forecast completion date (FCD).
Ensuring control account managers (CAMs) are in a position to substantiate their schedule timeline, resource requirements, and cost estimate to complete the remaining work. It is equally important that project managers proactively take the action of “scrubbing” the CAM’s detail ETC/EAC and verifying the data to gain a better understanding of the project’s current state. This improves the quality of the project-level forecast completion date as well as the range of project-level EACs.
Suggested actions to review and enhance current processes from basic steps, such as incorporating an analysis of the IMS Current Execution Index (CEI) to gain an understanding of how well project personnel can forecast into the future, and taking advantage of AI tools to provide additional data analysis insight.
In addition, the publication of the EIA-748-E Standard for EVMS revised 27 guidelines and related updates to government agency guidance such as the DoD EVMS Interpretation Guide (EVMSIG) will require contractor’s to review and remap EVM System Description content to the revised set of guidelines. The updated blog emphasizes this is a good time to revisit internal ETC/EAC processes and procedures to determine where improvements can be made as well as to ensure project personnel are following the documented processes. The EIA-748-E split the EIA-748-D Guideline 27 into two guidelines. The EIA-748-E Guideline 20 is specific to the control account level EACs and Guideline 23 is specific to the project level EACs. An EVM System Description should have content specific to the process at the control account level as well as the project level that can easily be mapped to the EIA-748-E Guidelines 20 and 23.
Do Your Internal Processes and Procedures Need a Refresh?
H&A earned value consultants routinely assist contractors with updating their internal processes and procedures to reflect the evolving EVMS requirements and guides, regulatory environment, and toolset capabilities. Workflow steps can often be simplified and the quality of performance analysis can be improved with a refreshed approach that reduces the time needed to produce reliable and actionable information. Call us today at (714) 685-1730 to get started.
One of the fundamental rules that contributes to generating useful information from an Earned Value Management System (EVMS) is planning the work in manageable segments to facilitate more accurate project performance status. The goal in selecting an appropriate earned value technique (EVT) for a work package or task is to use the most objective rationale possible for the nature of the work. This often becomes more challenging when the Percent Complete EVT is selected for a longer duration work package/task. That’s where the use of Quantifiable Backup Data (QBD) comes into play. Properly used, QBDs provide the necessary objective evidence to claim earned value.
QBDs are also sometimes referred to as “predetermined rationale” consisting of defined lower-level objective and measurable milestones or steps that when completed contribute to the overall work package/task percent complete. The work package/task percent complete is determined based on when the milestones or steps are accomplished and the weight, typically a percentage of the total budget, assigned to the milestones/steps.
What are the benefits of using QBDs?
QBDs help to ensure there is a clear definition of done for each milestone or step; earned value claimed is based on verifiable accomplishments. Project personnel can substantiate and communicate to other project stakeholders how they determined the current overall percent complete for a work package/task based on documented criteria. QBDs eliminate the subjectivity often associated with using the Percent Complete EVT.
Common Characteristics of Effective QBDs
Here is a short list of the expected characteristics of QBDs.
Specific, defined accomplishment criteria are established before work begins. The accomplishment criteria must clearly describe the objective measurable outcome or deliverable.
Documented and actively maintained. QBD details could be captured in a specific tool, database, or as additional attributes of the EVM data. Designated project personnel are responsible for “owning” and maintaining the QBD details; this is typically the control account manager (CAM). The QBD details should be accessible to all project stakeholders to review as needed for full transparency. There is a defined, repeatable process to track any scope changes to the QBD accomplishment criteria.
Used as the basis for performance measurement. As work progresses, the QBD owner tracks the milestones/steps and records when the accomplishment criteria are met. The QBD weight provides the objective basis to determine the current cumulative to date percent complete used to calculate the work package earned value.
They may or may not have a period of performance depending upon the nature of the work effort and QBDs. QBDs with a period of performance align with the scheduled time frame for the work package/task they support; this should be captured with the QBD details. When the QBDs are used solely to calculate task progress, they do not have a defined period of performance. They may be accomplished in any order.
Figure 1 provides an illustration of the use of QBDs with a period of performance.
Figure 1: QBD Example for a Work Package Task in the IMS with Related Time-Phased Cost Data
What are common QBD issues?
H&A earned value consultants routinely provide hands-on support and guidance to our clients when there are issues with an EVMS implementation. Here is a short list of issues with the use of QBDs that they have observed on various engagements.
Generic QBDs that are not measurable and lack exit criteria. An example of generic QBD descriptions: Test Procedure Development Step 1, Test Procedure Development Step 2, and Test Procedure Development Step 3. Since there is no clear definition of what the steps entail, generic QBDs are subject to interpretation and not useful.
Ad-hoc methods to capture accomplishment/exit criteria. The QBD must be documented in a manner that others on a project can access and verify.
Weighting is not well defined or tied logically to the technical work. If the basis used to determine or substantiate the weighting is not known, the QBD is lacking an objective means to determine whether that weighting makes sense.
The time-phased cost values are not logically tied to the weighting. Classic case of failing to ensure the BCWS, BCWP, and ACWP are aligned in a given reporting period for accurate performance reporting. Figure 1 illustrates this requirement for data traceability between the QBDs and the time-phased cost data. It is easy to verify that the BCWS and BCWP for June (125.00) aligns with QBD #1 weight of 25% of the total budget (500).
Disguising level of effort (LOE) as discrete work effort with QBDs. Evidence of this: QBD weighting or time-phasing is level loaded.
Strategies for Ensuring the Effective Use of QBDs
All of these issues can be prevented with a focus on data quality and ensuring project personnel have the necessary tools and training. Here are a few successful strategies H&A earned value consultants have helped our clients to implement to ensure the effective use of QBDs.
Review your EVM System Description and any related procedures specific to QBD content. Has a repeatable process been defined that describes the expectations and requirements for the use of the QBDs for the entire project life-cycle? Establishing the QBD accomplishment/exit criteria details is an essential part of the project planning activities at the beginning of the project. Is there clear direction on when the use of QBDs are appropriate? A common example is when a supporting process such as Agile is providing the QBD information to claim earned value in the EVMS.
In support of the repeatable process, establish a common software tool or core EVM tool configuration that includes a means to capture the required QBD details. As part of the design criteria, be sure to allow for project specific configuration options in addition to the standard core data requirements. The objective is to make it easy for project personnel to capture the necessary data and reduce the likelihood of ad-hoc methods.
When it makes sense, create a QBD “library” of common, repeatable milestones/steps that include a crisp description, measurable outcome or deliverable, and rationale for the weighting that project personnel can use as a basis for their work packages/tasks. This works best when there is historical data to substantiate the total budget, duration, elements of cost, and weighting. A complexity factor may also be applied that is documented.
Conduct targeted training on how to properly document and maintain the QBD details following the documented process and using the tools of choice. Hands-on exercises and examples can help project personnel learn how to distill requirements into clear specific accomplishment/exit criteria and how that process saves time throughout the project execution phase. For example, it is easier to quickly track QBD progress. The basis for claiming earned value is transparent and auditable.
Include a review of the QBD details as part of any Integrated Baseline Review (IBR) to ensure clear accomplishment/exit criteria have been defined as well as to ensure they have been properly used. This helps to eliminate a number of QBD issues at the beginning of project including instances where LOE is disguised as discrete work effort.
Need help with your QBD planning and implementation?
H&A earned value consultants often assist clients with producing work or desktop instructions that help project personnel to address common issues with implementing an EVMS on their projects such as the proper and effective use of QBDs. H&A schedule, cost, and other toolset experts can help you to establish a core, common configuration to capture QBD details or collect supporting data from other software tools. Targeted and tailored training is one our core competencies – we can help you to enhance your training content to include QBD best practice content and exercises. We also routinely conduct mock IBRs for our clients to ensure they are well-prepared for the event with their customer. Call us today to get started.
A major challenge with an Integrated Master Scheule (IMS) is making the most out of this powerful project management tool. Large and even not-so-large projects are required to have an IMS which adheres to the requirements of the Integrated Program Management Report (IPMR) or Integrated Program Management Data and Analysis Report (IPMDAR) Data Item Description (DID) and meets the schedule data quality checks available. But having met the DID requirements and passing the quality checks does not mean the IMS is being used to get the most information into the hands of decision makers on the project.
The IPMR or IPMDAR DID, even though detailed and thorough, is generic. The same DID is used on a contract whether it is for an important new hardware-based system, a new software system, or some other goal. The DID misses the point that the type of product on the contract means that unique topics may be the most important. There is no focus in the DID; it is high level and comprehensive. What’s missing are the special interest or special focus schedules that can be drawn from the IMS with good coding, grouping, filtering, and sorting techniques.
Remember that the statement of work (SOW) for the project is really comprised of promises made in the various plans submitted in the proposal and updated after contract award. The System Engineering Management Plan (SEMP), the Software Development Plan (SDP), Make/Buy Plan, Procurement Plan, Test and Evaluation Management Plan (TEMP), and others all contain commitments that should be translated into actions in the IMS. There should be access to the portions of the IMS that show how these commitments will be accomplished.
Examples of Special Interest Schedules
On a new hardware-based project, key pieces of information revolve around getting designs done and into a form to plan for the procurement of the various things needed to build the end items. This information often resides in the IMS but must be pulled out into a “drawing release” schedule. That is a schedule showing the transition from design to 3-D models or drawings. Pinpointing the times and links in the IMS where design becomes actionable for procurement enables the project team and their suppliers to be prepared to execute the procurements. The teams or engineers (designers) and procurement people should be focused on the drawing release schedule with frequent, at least weekly meetings to coordinate.
One of the serious issues I witnessed on a project was the lack of preparedness in having trained and qualified drawing checkers who could sign-off and release drawings. Because of the need for flight safety considerations, the drawing checker position could only be filled by qualified people. Instead of preparing months ahead for the wave of drawings, the waves were allowed to crash into the far-too-few checkers. What was supposed to be a short cycle became weeks long as drawings sat waiting for release.
As the transition is made from design to production, then the procurement schedule becomes another focused schedule which should show the information about what is being procured, from whom, and when it will be delivered. This information is used by the engineers, procurement, and inventory control people including receiving to understand the timing and volume of inbound items. Frequent coordination with suppliers and internal team members using this focused schedule helps to ensure a smooth process. Will the factory be ready to receive, inspect, process, and store all the inbound items?
What about software development as a special topic focus schedule? This is often needed. The project personnel must be able to quickly understand where in the cycle the software is and when releases will be made as well as what the release is needed for in the overall project.
Think about all the other important focus areas that could exist on a project. For example, the training effort should be in a focused schedule showing the development of the training material (courseware), training aids, facilities, instructor preparation and anything else needed to execute the statement of work related to training.
Testing is possibly more complicated than training. This includes development of test plans and procedures, as well as the creation of test fixtures and tools. The preparation of test personnel capable of performing complicated tests should be in the focused schedule.
By now you get the idea. The IMS is the combination of all these schedules, the thing that coordinates between and among them. But the focused schedules are the real bread-and-butter of the schedule discipline. It is shocking to see a project where these do not exist. Maybe the managers don’t know they are needed or possibly that they are available. Maybe the schedule team did not prepare for these extractions from the IMS.
If your project does not have focused schedules and does not use them, the project is in jeopardy. These schedules should be generated and used frequently; weekly at least. Even if the IMS itself is only undergoing a monthly update, the detailed schedules should be much more alive and part of the weekly communication between work teams on the project.
Tips and Suggestions
How to get started. Begin with the source documents and their authors, the SEMP, the TEMP, and so on. Make a list of the likely focused schedules that need to be drawn from the IMS. Read them and extract the information you need to build your IMS. If you are just starting the IMS, you could build individual schedules with the authors and then integrate them into the IMS. If you already have built the IMS, you can find the tasks you need and code them so they will appear on the focused schedule. Once coded, extract the focused schedule from the IMS using the applicable coding filters and verify it matches the commitments that were made in the source documents from the various authors.
Hold “report court.” Rather than reading and sorting through all the various plans, schedule a project meeting with the key team members and ask them what reports and what schedules they need to do their jobs. Remind them of the commitments they made in the plans. They can bring or provide a list and description to you, and you can decide “in court” which items you can or cannot incorporate into the IMS. That can help to streamline what is included in the IMS and who is responsible for what.
Create a schedule data dictionary if you haven’t already done so. This is essential to identify standard as well as project unique activity, milestone, or resource coding and how the coding is used so there is a common understanding of the content. The customer will need this information as well as when the IMS is provided as a monthly performance reporting data deliverable (see the IPMDAR Section 2.4.2.20, Data Dictionary for Native Schedule File). It is a prerequisite to ensure consistency in use as well as to establish a level of discipline throughout the IMS development and maintenance process. Ensure tasks always include the necessary coding. Ideally, you did your homework on the likely special topic schedules you need to draw from the IMS before starting to build the IMS. Otherwise you may need to determine various sorting and filter techniques to identify the tasks that require additional coding details. As noted above, once the tasks are coded, you or other project personnel will be able to extract the various special interest schedules from the IMS as needed.
Need help?
Building a useful IMS for complex projects is not easy. Up front planning for the development of the IMS can help to identify the necessary outline codes and other coding to be able to group, filter, or sort the activities to extract the special topic or special focus details from the IMS. The IMS is an essential communication tool for everyone on the project. How the schedule is constructed and coded makes a difference. H&A scheduling subject matter experts (SMEs) have decades of experience in a variety of complex project environments and can help you avoid common pitfalls. Contact us today.
One of the top reasons projects fail is because of poor task duration estimating for an integrated master schedule (IMS). Without accurate and consistent estimates, project outcomes can become unpredictable, leading to missed deadlines, budget overruns, and overall project failure. A realistic schedule is required to place the necessary resources in the correct timeframe to adequately budget the work as well as to produce credible estimates to complete and to forecast completion dates. While missed deadlines and budget overruns are detrimental for any project, there can be additional business ramifications when producing schedules in an Earned Value Management System (EVMS) contractual environment.
While there are effective methods available to improve task duration estimates, they are often underutilized. A common reason for this oversight is the lack of time allocated to developing the project schedule and determining task durations.
During the proposal phase, initial durations are typically estimated at a more summary level than the detailed execution phase. The proposed work is often defined at a level one to two steps higher than where the actual tasks will be performed. After project initiation, the team’s initial effort is to break the work down into more manageable tasks. This decomposition is crucial for achieving more accurate estimates. It’s no surprise, then, that the initial breakdown efforts often result in duration estimates that don’t align with the proposed durations.
Parkinson’s Law tells us that work expands to fill the time available. If task durations are excessively long, costs will inevitably rise. To counter this, it’s important to require estimators to provide both the estimated effort and the duration needed to accomplish the task. This approach helps to gain a better understanding of the scope of the task and to avoid unrealistic estimates. If you see a task that requires 10,000 hours with a duration of 2 weeks, then you immediately would suspect something is wrong with the estimates.
Techniques for Developing More Accurate Task Duration Estimates
What are your options? H&A earned value consultants and senior master schedulers often employ the following techniques to help a client produce a more realistic IMS.
Establish a Probability Goal. It is essential to set clear expectations for the estimating team. Without guidance, teams may default to estimates with a 50/50 probability of success, which is a recipe for failure. Instead, directing the team to aim for estimates within a 75% to 80% probability range can lead to better outcomes.
Break Down Tasks. Decompose tasks into smaller, more manageable components. The further out the task’s horizon, the greater the variability in estimates. For example, asking someone to estimate the drive time from Washington, DC, to Boston without specifying the vehicle, route, limitations, or conditions introduces unnecessary uncertainty.
Use Professional Judgment. Engage someone with experience in the specific type of work required for the task. A seasoned expert will provide more accurate duration estimates based on their knowledge and experience. Often, we ask the potential task manager to do the estimate, but that person may not be the one with the most related experience or knowledge about the work.
Leverage Historical Data. If the task or a similar one has been done before, use that historical data to inform the estimate. This approach provides a realistic benchmark for future estimates.
Use generative AI. If you have access to an AI capability along with access to historical data, that could be an option to leverage the source data using specific prompts to glean relevant information. As with all AI tools, always verify the generated results to ensure it is a useful basis to substantiate the estimate.
Apply Parametric Estimating. When possible, use parametric analysis to estimate the durations. For example, if it took a specific number of days to clean up a certain amount of toxic waste under similar conditions, this data can be used to estimate the duration of a new but comparable task.
Engage Multiple Estimators. Gathering estimates from more than one person helps to reduce individual biases and provides a more rounded estimate.
Apply the Delphi Method. This technique involves three knowledgeable individuals providing estimates or three-point estimates. The initial estimates are analyzed, and the results are shared with the estimators without attributing specific values to any individual. After discussing the findings, the estimators revise their estimates based on the collective insights, leading to a more refined and accurate duration estimate.
Use Three-Point Estimates. Ask estimators to provide best-case (BC), most likely (ML), and worst-case (WC) durations, along with their reasoning. Applying a formula like the Program Evaluation and Review Technique (PERT) duration formula (1BC+4ML+1WC)/6 can yield an adjusted and realistic estimate. You can vary the best and worst case estimate for risk if you have information on that.
To see how this simple approach can work, walk through this exercise. Ask yourself how long it takes you to drive to work most of the time. Let’s say the answer is 45 minutes. Then ask yourself how long it would take on a Sunday morning in the summer when the roads were dry (the best case). Let’s say your answer is 25 minutes. Then ask yourself how long it would take on a Monday morning in the winter during a moderate snow event (the worst case). You tell yourself 90 minutes. Now you have enough information to calculate the PERT duration.
Best Case = 25 minutes Most likely = 45 minutes Worst Case = 90 minutes PERT Duration = (25 + 180 + 90)/6 = 49 minutes
Finally, let’s say you ask yourself how likely it is that you end up on the high side instead of the low side. If your answer is it is much more likely to encounter conditions that slow you down, you would modify the formula to use one and a half times the worst case (25 + 180 + 135)/6 = 57 minutes. That longer duration shows the impact of your impromptu risk analysis and provides a duration that has a much higher probability of being achievable.
Now think about the same scenario but conducted by you interviewing three people who drive the same route to work. That would approximate the Delphi method.
All or something less. It may not be necessary to analyze every task to the degree suggested. Even if you could do the analysis along the top several critical paths that would be an improvement. If you were to apply numerical factors to the tasks in related portions of the project that would be impactful. For example, all mechanical design tasks or all software development tasks.
What is the best approach?
You will need to analyze your project and determine which approach or approaches would yield useful information at a reasonable cost. If you apply your own thinking on how to improve your duration estimates, you will undoubtedly find a method most suitable for your situation. Depending on a project’s complexity and risk factors, you may also find it useful to take a more formal approach. Conducting a schedule risk assessment (SRA), a probabilistic assessment of a project’s outcome, can help you gain a better understanding of where the duration risk exists in the schedule.
H&A earned value consultants and scheduling subject matter experts often assist clients to establish basic guidance to help scheduling personnel to get into the habit of adequately defining tasks and using techniques to improve duration estimates. This is critical to be able to produce well-constructed and executable schedules to improve the likelihood of achieving project technical, schedule, and cost objectives.
H&A offers a range of project scheduling training workshops that can help schedulers to implement industry best practices. These workshops also cover how to take the next step to implement advanced scheduling techniques such as schedule risk assessments to ensure the schedule is realistic and achievable. H&A earned value consultants and master schedulers often provide one-on-one mentoring using the scheduling tool of choice to help scheduling personnel work through the learning curve of using advanced network scheduling techniques to produce executable schedules.
Working with numerous clients, H&A earned value consultants have observed many instances where project management teams consider the risk and opportunity (R&O) management process to be something technical in nature, run by engineers and focused on the technical aspects of the project’s product. Meanwhile, there is often a separate risk process going on much less formally to consider risks in terms of the project’s schedule and cost goals. This bifurcated approach is a source of risk itself.
Procuring agencies such as the DoD, NASA, DOE, and others have published their own risk management guides. The Government Accountability Office (GAO) has various reports on this topic including examples of their findings. DCMA mentions risk in their Business Practice 4 Guideline Evaluation Template (GET) Process/Implementation Verification Points often used by contractors to check whether their earned value management system (EVMS) meets the intent of the EIA-748 Standard for EVMS guidelines. The exact questions asked by DCMA are important but the overall idea that risk and EVMS are co-dependent is the critical aspect. This is also true for the DOE. They identify risk management as one of the 10 subprocesses necessary for an EVMS.
Setting the Stage
Risk is defined as a factor, element, constraint, or course of action that introduces an uncertainty of outcome that should it occur, could negatively impact the ability to meet the project’s planned technical, schedule, or cost objectives. Negative impacts are sometimes called a threat where the objective is to mitigate the risk. A realized risk becomes an issue that must be resolved to minimize the impact. An opportunity is defined as a positive risk where the objective is to capture the beneficial impacts. Opportunities are not as common as threats.
R&O management is defined as the process of identifying, assessing, and responding to risks and opportunities throughout the project’s life cycle. The goal of R&O management is to identify potential risks and opportunities, determine the likelihood or probability the risk or opportunity will occur, and determine the impact should a risk be realized, or an opportunity is captured. Risks and opportunities are prioritized so that those with greater impact and a higher probability of occurring receive a greater share of resources and attention.
In this blog, we are using the term risk with a focus on the negative impacts or threats to a project.
Example of Common Project Risks and Risk Assessment Approach
H&A’s senior management routinely reviews literature, considers our work with clients, and discusses with our earned value consultants the main contributors to project failure. These findings are updated regularly and presented in H&A training materials as an Ishikawa Fishbone Cause and Effect diagram. Figure 1 is an example of this type of diagram.
Figure 1: Example of an Ishikawa Fishbone Case and Effect Diagram
When this approach is used for risk assessments, each contributing risk is assessed, and the response documented. An example of a risk/response table is shown below for the first three identified risks.
Risk Item
Good Example of a Real Project Response to an Identified Risk
Poor communications
Goals are known and documented. Communications plan is in place. Have an established cadence for weekly internal and customer meetings to quickly resolve issues. An internal project performance management dashboard is updated daily with current data. Updated IMS and risk register are broadcast weekly to the team. A strong business rhythm has been established.
Scope creep
Work scope (requirements and SOW) are well defined and a change control process is in place. Performers are trained in spotting scope creep and how to handle potential changes in scope.
Inaccurate cost estimate
Implemented a process enabling cost estimators to search historical actual cost data, identify analogous tasks, substantiate, and document the basis of estimate. For high risk areas, techniques such as the Delphi method, SMEs, and non-advocate reviews are used. Performance is constantly monitored to spot work elements where the actual costs do not align with the budgeted costs or the estimate at completion (EAC) is triggering internal variance at completion (VAC) thresholds.
This same type of approach can be used by the project control team to create risk Ishikawa diagrams to identify technical risks that could impact the ability to achieve schedule and cost goals. Likewise, risk Ishikawa diagrams can be used to identify risks in the integrated master schedule (IMS) and time phased budget or estimate to complete (ETC) and EAC.
A Unified Approach to Risk
A unified approach includes technical, schedule, cost, and other risk identification and assessment that is an integral part of a contractor’s EVMS. R&O management should be integrated into the EVMS subsystems including work organization, planning and scheduling, work authorization and budgeting, management analysis and reporting, and change management.
Identified risks are analyzed and quantified to develop a risk handling strategy. Where applicable, risk mitigation tasks have been entered into the IMS. Ideally a schedule risk assessment (SRA) has been completed to gain an understanding of duration risks that can help to improve the accuracy of the schedule. Assuming the IMS is resource loaded and leveled, the result is a more accurate time phased budget plan as it incorporates the risk handling strategies when the performance measurement baseline (PMB) is established. The R&O process also provides the necessary rationale for determining the budget amount set aside for management reserve (MR).
The R&O assessments should be a normal part of generating the Variance Analysis Reports (VARs) and updating the ETC and EAC. These assessments can also drive the need for processing baseline change requests (BCRs) as well as determining the best approach for corrective actions.
Using Directed Searches of Identified Risks
To facilitate a unified approach, we recommend establishing a cadence of standing risk review sessions that are conducted in a methodical way to ensure the project manager, integrated product team (IPT) leads, control account managers (CAMs), schedulers, and financial analysts routinely walk through the identified risks that have the potential to impact the project’s IMS or time phased cost.
The intent is to establish a framework such as Ishikawa diagram to guide the risk review session, a directed search of the identified risks should anything further need to be addressed. It is important that a “does anyone have a risk to suggest” approach is not used. Every topic should be covered in every session by walking the Ishikawa risk items. Most of the time it will be a quick “no change” response. Separate Ishikawa diagrams could be used to guide the discussions for the contributing technical, schedule, and cost risks. The meeting room should have the ability to view the live IMS, cost data, and performance analysis data. Team members should be prepared to take notes during the meeting to compile action items.
Figure 2 is an example of a basic Ishikawa diagram of IMS risks the project control team could focus on for the risk review session. This would reflect the project control team’s identified risks to the IMS they routinely monitor.
Figure 2: Example of an IMS Ishikawa Fishbone Case and Effect Diagram
For example, updating the current schedule every reporting period has the potential to compromise the integrity of the IMS to provide accurate forecast information about the project’s remaining work. Perhaps the project control team has identified a list of contributing schedule status risks, risk response, and example directed questions for each review meeting. These questions could be focused at the CAM level. The following table is a simple example.
Risk Item
Risk Response
Example Directed Questions
IMS critical or driving paths
Verify logic. Verify traceability exists and has not been damaged by updates. Review constraints, deadlines, and milestones. Perform data quality check, correct errors.
Did milestones move? Did the end date move? What were the baseline dates for starts or finishes that fall into the period?What were the forecasted dates for starts and finishes that fall into the period?What did not happen? Why?
Realism
Calculate and assess the Baseline Execution Index (BEI) and Current Execution Index (CEI). Compare the ratio of actual performance to the ratio of future performance.
Is the BEI/CEI result within goals? Are there performance discrepancies? Does the forecast need to be updated to align with reality? Is the forecast showing the performance the team can achieve based on what has been achieved?
Quality of ETC/EAC
Verify updates are occurring. Compare current ETC/EAC to previous ETC/EAC.
Has the ETC been updated? What changed and why? For example, for activities with material requirements, price or usage variances may impact the ETC/EAC. For activities with labor requirements, availability or personnel changes may impact future work effort ETC/EAC.
The same approach would be used for guided budget and cost risk discussions. Tailored cause and effect diagrams should be created for a company business environment and each project’s unique characteristics.
A company’s EVMS should be designed to aid the identification and management of risks and opportunities. For example, during the process of developing the schedule and budget baseline, activity durations, resource requirements, and budget distribution can be refined to reflect identified and assessed risks. Proactively identifying and managing risks improves project performance. The expectation of specific risks occurring leads to contingency plans that lower the likelihood and impact of risks as well as the establishment of schedule margin and MR to address identified and assessed risks.
A long running challenge all companies face is attracting and retaining top project management talent in government contracting environments whether for the DoD, shipbuilding, NASA, DOE, or the intelligence community. Experienced program/project managers, control account managers (CAMs), schedulers, and project control analysts are always in short supply. It is expensive to continually hire and train new employees that elect to move on for a variety of reasons; successful strategies aimed at reducing turnover always help the financial bottom line.
An informal survey H&A earned value consultants recently conducted with corporate business managers and Earned Value Management System (EVMS) directors of A&D and DOE contractors highlighted this challenge of retaining top talent. One contractor surveyed had a 50% annual turnover rate in CAMs that was impacting their ability to sustain their EVMS best practices. The reasons the CAMs gave the business managers or EVMS directors for moving on are summarized in the following pie chart.
While some items are outside the control of a manager or director such as retirement and potentially leaving the company (which may have an underlying root cause related to other reasons cited), a good percentage could be addressed with a formal training and retention program. For example, adding up required too much overtime (14%), no incentive or recognition (14%), only want to do technical work (11%), and not compensated to be a CAM (9%) adds up to 48% of the reasons why they moved on.
Establishing a Training and Retention Program
A strategy some companies have implemented to address this retention challenge is to establish a career path for talented technical, estimating, scheduling, and cost management project personnel with a formal training and retention program that aligns with their professional objectives. A successful approach for retaining and promoting motivated project personnel H&A earned value consultants have seen implemented at some A&D contractors included the following tactics.
Management established a formal training and promotion program for potential CAMs that new employees learn about as part of their on-boarding process. The program is meant to be an incentive for potential employees to come work for the company. These new employees are introduced to their options and the training/promotion process to help them chart their career goals and set expectations. The message to new employees is that the company is committed to helping them determine and achieve their professional goals.
The companies hired a blend of technical engineering, cost estimating, scheduling, and cost management project personnel with the anticipation they would move up through the role of a CAM with expanding responsibilities and higher management levels. This was clearly communicated to the new employees as part of the process to chart their career goals within the company.
They assigned a mentor to help guide them through the training and promotion program. This provided two benefits to the company: a) management was able to quickly identify talented and motivated employees and 2) employees had a direct connection to leadership that could help them align their talents with career paths within the company. It also helps the company to identify those employees that want to excel within their chosen discipline such as systems engineering or scheduling; not everyone will want to follow the path to become a CAM.
They cross trained the personnel in the different disciplines required for a best in class EVMS to increase their skill levels and knowledge base required for an integrated system. This was required training for new employees. For example, the cost estimators or cost management personnel learned about scheduling techniques and the schedulers learned about cost management techniques. Technical personnel learned about schedule and cost techniques. EVM concepts and best practices as well as schedule and cost performance analysis were part of the standard curriculum for everyone.
For those employees that wanted to continue moving up through the CAM role to higher management levels, advanced training was required. Training in other disciplines were woven in such as risk management, resource management, material management, subcontract management, financial analysis, and advanced project performance analysis to broaden their knowledge base. These employees were tested, certified, and earned a bonus upon gaining their certifications that ranged from $5K to $10K.
The employee’s mentor helped them to chart a path starting with smaller projects in a planning and scheduling role and then advancing them through different project types and project control roles to larger more complex projects so they could gain hands-on experience in each environment. This approach helped them to broaden their knowledge base across disciplines, improve their skill sets, and learn how to successfully handle increasingly complex project control challenges as well as develop an internal professional network. There were various paths they could follow to progressively gain more experience. The end goal was to become a CAM on a large complex project in preparation for becoming a project manager. This is illustrated in the following image.
Successful CAMs that completed this advancement plan were then moved up to higher management roles such as project managers, business managers, and corporate EVMS directors. For example, one company established a program like this and seven years later, the majority of project managers, business managers, and corporate directors came through this program. The company also offered bonuses for successfully achieving major project milestones or other events such as Integrated Baseline Reviews (IBRs) to keep them focused.
Senior CAMs, project managers, business managers, and corporate directors were the instructors for internal project management and EVM training as well as mentors. This demonstrated to project personnel that excellence in integrated program management was a fundamental component of the company’s business culture.
Essential Components
Common attributes of successful training and retention programs included:
Establishing a program with a defined training and career path to guide and mentor motivated employees whether beginning from a technical, schedule, or cost discipline up through the role of CAMs. The path to become a project manager or high level manager starts with the role of CAM.
Project managers, executive managers and directors conduct the internal project management and EVM training. They are the mentors to junior personnel. They establish the corporate business culture that highlights excellence in project management is a priority. Exceptional project execution results in better financial performance. A commitment to excellence creates a better working environment that reduces the stress level for CAMs and project managers because there is a proven process in place to help ensure achievable project goals have been established.
Motivated employees are rewarded for improving and broadening their skill sets, experience, and knowledge base. They are recognized for their high level of proficiency as well as their role in establishing and maintaining a best in class EVMS regardless of the project they are supporting. Recognition can take many forms that can be tailored to what is important to an employee, whether as bonuses, awards, additional training, or promotions.
Retaining top project management talent requires a plan and strategy corporate management is invested in and actively maintains. It is an inherent component of the corporate culture that demonstrates a commitment to excellence in project management and sustaining a best in class EVMS.
H&A earned value consultants often help corporate business managers and EVM directors chart out training plans for cross-training project personnel and helping them establish internal CAM or project controls certification programs. Licensing H&A training materials or Virtual Learning Lab (VLL) scheduling and EVM online training reduces the time required to develop and maintain training materials. We can do the same for you. Give us a call today at (714) 685-1730.
