EVMS Basic Concepts Archives - Page 2 of 2

Humphreys & Associates Joins Project Management Institute’s Registered Consultant Program

By Humphreys & Associates / January 9, 2015 / EVM, EVMS, pmi, project management, project management institute

EVM, EVMS, pmi, project management, project management institute

Humphreys & Associates Joins Project Management Institute’s Registered Consultant Program

Online Project Management resource helps organizations connect with consulting firms

IRVINE, Jan. 09, 2015 — Humphreys & Associates today announces that it has joined the Project Management Institute’s (PMI) Registered Consultant Program, an online resource that provides organizations with the convenience of accessing a PMI-maintained list of consulting firms that are able to improve their project, program and portfolio management practices.

As more organizations adopt project management as a strategic competency for achieving business results, many are seeking the advice of consultants to enhance their project management capabilities. The PMI Consultant Registry is complimentary to organizations, as is the PMI-developed A Guide on How to Select a Project Management Consultant.

The guide walks organizations through the necessary steps to best identify a consultancy that meets their requirements. Each firm listed in the directory provides one case study per area of expertise that highlights its previous consulting engagements.This feature gives organizations insight into the consultancy’s engagement style and its ability to meet the unique needs of a project.

Humphreys & Associates’ project management consultants have worked with all branches of the U.S. Department of Defense (DoD), the Department of Energy (DOE), NASA, other U.S. government agencies, and with foreign governments. “Our associates and teams have great admiration for the Project Management Institute’s global advocacy, education, collaboration, and project management research. As PMI is such a comprehensive resource for project managers Humphreys & Associates therefore is quite pleased to join PMI’s Consultant Registry,” asserted Gary C. Humphreys, President and CEO, Humphreys & Associates.

Humphreys & Associates joins more than 140 consulting companies in more than 35 countries that participate in the Program.

About Humphreys & Associates

Humphreys & Associates, led by Gary Humphreys, is the established leader in earned value management consulting and training. H&A has provided EVMS consulting services to over 850 companies and government agencies worldwide and we have trained over 900,000 individuals at all EVMS functional and management levels.

About Project Management Institute (PMI)
Project Management Institute is the world’s leading not-for-profit professional membership association for the project, program and portfolio management profession. Founded in 1969, PMI delivers value for more than 2.9 million professionals working in nearly every country in the world through global advocacy, collaboration, education and research. PMI advances careers, improves organizational success and further matures the profession of project management through its globally recognized standards, certifications, resources, tools academic research, publications, professional development courses, and networking opportunities. As part of the PMI family, Human Systems International (HSI) provides organizational assessment and benchmarking services to leading businesses and government, while ProjectManagement.com and ProjectsAtWork.com create online global communities that deliver more resources, better tools, larger networks and broader perspectives. Visit us at www.PMI.org, www.facebook.com/PMInstitute, and on Twitter@PMInstitute.

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Building a Comprehensive EVMS Program Value Transaction Log

By Humphreys & Associates / November 19, 2014 / EVM, EVMS, EVSR, IBR, PVTL

EVM, EVMS, EVSR, IBR, PVTL

EVM Program Managers are subject to change requests and direction in the internal scope, schedule, and budget baselines from a number of sources. Integrated Baseline Reviews (IBRs), Program Reviews with customers, Earned Value Surveillance Reviews (EVSRs), and Control Account Manager (CAM) requests via Baseline Change Requests (BCRs) are some of the ways that can result in changes to the baseline. The Earned Value Management System (EVMS) Guidelines require detailed, accurate, and current reporting of contract budgets, earned value, and actual costs, including incorporation of baseline changes.A Program Value Transaction Log is one way to ensure reports containing budget information that are submitted to both internal and external customers are always reconcilable to contract documentation. It is more than the standard EVMS Contract Budget Base (CBB) Log or a Performance Measurement Baseline (PMB) Log, because while this log incorporates both of those logs, it can also contain more information on two levels; the contract price and the internal distribution of budget.

The Earned Value budget traceability starts with the Negotiated Contract Price, and then reduces for any appropriate fees to derive the Contract Target Cost (CTC). The cost value of any Authorized Unpriced Work (AUW), or the contractor proposed cost of customer authorized scope that has not yet been negotiated, is added to equal the Contract Budget Base (CBB). When the value of the Management Reserve (MR) budget is identified by the Program Manager, that amount is subtracted from the CBB to yield the Performance Measurement Baseline (PMB); Undistributed Budget (UB) is then subtracted from the PMB, with the remainder being budget that will be distributed to Control Accounts (CA) and Summary Level Planning Packages (SLPPs). The graphic below illustrates this process.

An example from a sample excerpt of a Program Value Transaction Log (PVTL) is shown below (first as an EVMS PVTL Excel spreadsheet and then also as an EVMS PVTL screen-shot). It stops at the “Distributed Budget Total $” column, but the shaded columns show that the actual distribution of budget can be very detailed, even down to the overhead costs and the elements of cost, if EVMS program management so desires.

Or, it can be the abbreviated version shown below, or even abbreviated further by beginning with the “Contract Target Cost column”, and going through Column 7, “Total Distributed”.

The utility of the Program Value Transaction Log (PVTL, or any other name) is that one can keep track of contract changes and internal changes. By going to the monthly summaries at the end of each accounting month, the amounts that should be reported in the Integrated Program Management and Data Analysis Report (IPMDAR) database are traceable.

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EVM: The IPMR and Subcontract Flowdown

By Humphreys & Associates / November 12, 2014 / EVM, EVM Contractor, EVM Contracts, EVM Flowdown, EVM Subcontractors, EVMS Contractors, IPMR

EVM, EVM Contractor, EVM Contracts, EVM Flowdown, EVM Subcontractors, EVMS Contractors, IPMR

EVM Contractors, EVM Subcontractors, IPMR & Flowdown

For decades government EVM project managers performed the task of integration of all prime and subcontractor performance and the associated data on a project. In the late 1960s things changed. The U.S. Federal Government mandated that the prime contractor become the integrator of the performance and the data. Many contractors undertook this responsibility nicely. However, for many contractors in this new role their subcontract management expertise and data accumulation capabilities were lacking on large R&D, SDD, and LRIP subcontract efforts in particular. The primes needed to include all of the data from their subcontractors that comprised as much as 80% of the contract effort. The timing of subcontractor reports became very important. However, software was “what it was” in the 1960s and ‘70s, and many EVM subcontractors were unable to meet the required delivery dates.

In the early 1980s the National Security Industrial Association [now the NDIA] conducted a survey and found that 40% of the subcontractor data was delayed by a month [additional reference, 2008 – NDIA.org source]. Consequently, January data from subcontractors would not be entered into the prime contractor’s performance reports [now IPMR or CPR] until the prime’s February report which may be delivered around 15 March. Today’s software has improved extensively and many EVM subcontractors recognize the importance of timeliness of data; they are also prime contractors on other EVM projects.

Many companies have not yet begun delivering performance data using the new Integrated Program Management Report (IPMR). Companies that are using the IPMR appear to be adapting well to the new requirements, specifically in regards to the submission date and successful retrieval of subcontractor data. The new IPMR Data Item Description, DI-MGMT-81861, specifically requires that “Formats 1-6 shall be submitted to the procuring activity no later than 12 working days following the contractor’s accounting period cutoff date. This requirement may be tailored through contract negotiations to allow submission as late as 17 working days, provided the contractor and Government agree that contract complexity and/or integration of subcontractor and vendor performance data warrant additional time and will yield more accurate performance.”

The table below illustrates the results of a survey H&A conducted of fifteen major contractors. While the sample size is small, the survey found that five prime contractors had an IPMR requirement flowdown to a subcontractor with NTE 12 working days submission CDRL requirement. In all five cases, the prime contractors were able to successfully incorporate subcontract data in time to meet the submission requirement.

While it has taken over 40 years, it is now recognized by both the government and contractors that timely incorporation of subcontractor performance data in the prime’s performance report helps validate the project data–the purpose of early visibility and prompt decision making.

Our survey found that those contractors submitting the IPMR are successfully incorporating subcontractors’ performance data in their IPMRs as the DID Instructions stipulate. It is hoped that the era of the “one-month lag” with subcontractor performance data has ended; and the government will be receiving accurate, timely IPMR performance data from its prime contractors.

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Keeping the EVM Love Alive In Your Organization

By Humphreys & Associates / January 3, 2014 / EVM, EVMS

EVM, EVMS

Admittedly, operating an Earned Value Management System (EVMS) in an organization can sometimes be like getting your kids to the dentist. They know they have to do it, and they will even concede that it may be good for them, but it does not mean they have to like it.

Earned Value provides a framework for integrating the cost, schedule, and technical scope of your project, and is an exceptionally valuable tool for management and project status. There are, however, a few strategies that can be employed in order to maintain a healthy system by motivating those who operate within the system to do so with a sense of ownership.

Keeping the EVM love alive can follow the simple formula of Push, Pull and Inform.

1) Push: Senior Management Must Use the Data and Demand Quality

Having those up the food chain demanding accurate and timely information can be a powerful “push” that maintains interest and focuses efforts on system health and quality. Organizations where EVM is nothing more than a reporting requirement and is not used for decision making or conveyance of project status, will have a difficult time maintaining a healthy system. Sometimes negative attitudes towards Earned Value can even start with the customer and flow down to the contractor.

The alternative is in companies in which it is apparent that EVM is deeply embedded in the projects’ culture. In a multitude of forums, the language of Earned Value is used to describe the status and issues of the project. In these companies you probably will not see only the obligatory EVM charts in project reviews, but instead see the concepts and outputs of the system used throughout project management. If poor variance analyses, inaccurate Estimates at Completions (EAC), incomplete baselines, or lack of corrective actions are challenged by the entire chain of management, then chances are those problems will stop being problems and the organizations can begin relying on the information to manage effectively.

2) Pull: Keep the System Useful to the Users

A great deal of resources may be invested in an EVMS, and in organizations with a healthy and useful system the return on this investment can be substantial. Organizations that employ toolsets with timely and accessible reporting of project information help combat the belief that EVM is just a one-way reporting process. A common interface for data is an “EVM Cockpit”, or some other tool set or reports that make the information easy to access for day-to-day management purposes. The flip side of this are systems that make data accessibility difficult, or the problems of the system cause the data to be unreliable for prompt decision making purposes. For example, one of the more important processes in an EVMS is variance analysis; however, when a great deal of time and effort is spent explaining variances that are not related to project performance, it becomes a significant drain on the attitude towards the system.

It is also important that the critical processes of the system are easy to use and understand. These processes include project baselining, updates to the Estimate to Complete (ETC), statusing the Integrated Master Schedule (IMS), incorporation of changes, preparing variance analyses, and tracking of corrective actions. Decisions regarding the architecture of the toolsets supporting these processes can significantly impact the attitudes of system users. In addition, developing tool sets that eliminate the redundancy of data inputs between the cost and scheduling systems can dramatically improve the quality of the Earned Value data.

3) Inform: Regular Communication and Continuous Education to the Project Teams are Critical

Like any important management system in an organization, it is important to continually inform and support those who operate within the EVM system. There is an endless source of special topics and project notifications that can provide useful information to project teams, which will help maintain EVM knowledge and a healthy system. Some topics, such as preparing quality variance analysis, thorough corrective actions, and valid ETCs, need routine refreshment.

Below are a few suggestions on ways to communicate within the organization:

Monthly Internal Newsletter: An excellent mechanism to convey important updates to EV processes or changes that pertain to the business and the industry. This gives employees a chance to keep up with the latest news and developments.
EV Blog: By blogging regularly, an organization can develop themes that are specific to business issues the organization is experiencing. If there are many of the same questions repeated again and again, the blog can be used to answer those questions. This way, people can just refer to the blog if they have questions that are common.
Lunch & Learn Sessions: These sessions are an excellent way for all participants to gain further knowledge on a specific topic and ask questions in real time. This becomes more advantageous as all participants benefit from the group discussion.
Quarterly Webinar: This is particularly beneficial for organizations that may have multiple facilities located throughout the country. Specific subjects would be applicable to all sites. All participants, regardless of location, can attend and benefit.
Annual Quiz: This is a great way to gauge how well employees are grasping and using EVM. Questions would be centered on topics relating to events that occurred during the year. The quiz could be recurring and mandatory in the same manner as ethics and sexual harassment training.

For more information about keeping the EVM love alive in your organization give us a call at Humphreys & Associates, Inc. We are happy to answer questions.

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The Benefits of Using Nine EVMS Process Groups

By Humphreys & Associates / November 10, 2013

The benefit to a contractor initially developing its management system and the documentation of that management system in a System Description Document (SDD) using the Nine Process Groups is to clearly and completely structure its SDD in a natural grouping of related topics.

Below are the Nine Process Groups mapped to the EIA-748 Guidelines:

Guideline Areas	Process Groupings
Organization Planning, Scheduling & Budgeting Accounting Considerations Analysis & Management Reports Revisions & Maintenance	Organizing Scheduling Work Authorization Accounting Indirect Management Management & Analysis Change Management Material Management Subcontract Management

Why not use the five EVMS sections (guideline groupings) for organizing an SDD? The 32 guidelines were chronologically organized into these five sections rather than by process. When a program is started, the focus is to “Organize”. This includes activities such as:

Organizing the staffing and work (OBS and WBS)
Integrating the management control systems and the company’s processes
Integrating the WBS with the OBS to establish control accounts
Identifying the organization that is responsible for managing the overhead costs

These are all activities that occur prior to the next phase “Planning, Scheduling, and Budgeting”. This type of grouping is also an excellent method for teaching the basic concepts of EVMS. An Earned Value course organized in this manner has a natural flow, because each one of the five guideline areas builds upon the concepts of the one before.

An SDD, however, should describe an already established system rather than a concept, and the best framework in which to understand that system is not with a chronological orientation. Using the five EVMS areas approach often results in a document that is muddled, with disjointed flows of information. For example the topic of Indirect Cost Management is covered in six different guidelines across four different guideline areas. Similarly, Subcontract Management is represented in eight guidelines across four guideline areas. An SDD using the structure of the five EVMS areas would need repeated coverage of these topics throughout. Many companies also have organizational disciplines represented by several of the nine process groupings, e.g., Subcontract Management, Material Management, Indirect Management, and Accounting are often organizations within the company. Their associated processes represent the flow of the organization as well as the earned value management system. The clearest method for designing, reviewing and documenting an earned value management “system” is to structure the system using the nine process groups. The nine process grouping also follows the DCMA EVMS Cross Reference Checklist and its Management System Characteristics (MSCs) to accommodate contractor system structuring.

Additional chapters or section such as pre-contract award/proposal process, risk and opportunity, and system surveillance could be included in the system description, as they also involve earned value management.

In summary, while either approach could be used to construct the Earned Value Management System, the nine process group structure has proven to be the best architecture for an EVMS document.

For additional information about EVM education, EVMS Consulting or the Nine EVMS Process Groups, feel free to contact Humphreys & Associates.

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