at ADAPT: AgileEVM Delivering Value within Constrained Systems

AgileEVM  Delivering  Value  within  Constrained  Systems  

Brent  Barton,  President,  Agile  Advantage,  Inc.    

!  The  Problem  !  An  Agile  Story  !  Contracts  vs  Value  !  Scrum  (An  Agile  Project  Management  Framework)  

!  TradiAonal  Earned  Value  Management  !  Agile  Earned  Value  Management  (AgileEVM)  !  Project  Case  Study  !  Open  Discussion  

*Slides  available  via  slideshare.net  or  geHngagile.com  

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!  Robert  Gates,  the  United  States  Secretary  of  Defense,  in  a  September  2008  speech,  said,  “Our  convenAonal  modernizaAon  programs  seek  a  99%  soluAon  in  years.  Stability  and  counterinsurgency  missions—the  wars  we  are  in—require  75%  soluAons  in  months.  

3  ©2011  Agile  Advantage,  Inc.    All  rights  reserved.  

Agile  Methods:  Selected  DoD  Management  and  AcquisiAon  Concerns,  Carnegie  Mellon  University,  October  2011,  p.  ix  

This  is  the  best,  simplest,  easiest  to  use  applica1on  we  have  ever  go7en  in  both    

Customer  Care  and  the  Retail  Stores!    

Whatever  you  all  did,  I  want  more  of  that!  

Value  

Cost  Savings  

New  Revenue  

Compliance  

Customer  SaAsfacAon  

Employee  SaAsfacAon  

Shareholder  Value  

Revenue  RetenAon  

  Cost  Savings  

  Employee  SaAsfacAon    Customer  SaAsfacAon  

  New  Revenue    through  efficiency  

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!  #  Lives  saved  !  Simple  to  Use  

!  Secure  !  ?  

7  ©2011  Agile  Advantage,  Inc.    All  rights  reserved.  

Value  

Scope  

Schedule   Cost  

The  primary  purpose  of  the  [EVMS]  system  is  to  support  program  management*  

*  Earned  Value  Management  Systems  ANSI/EIA-­‐748-­‐B-­‐2007  8  

!  Time  and  Materials  (T  &  M)  

!  Fixed  Price  !  Cost  Plus  IncenAve  Fee  !  IDIQ/Delivery  orders  

•  or  task  orders  

9  ©2011  Agile  Advantage,  Inc.    All  rights  reserved.  

These  are    cost-­‐based!  

Value  

Constraints  (Schedule,  Cost,  Scope)  

Quality  

Source:    Jim  Highsmith  

Strategic  

Required  to  make  good  Decisions  

Informs  and  Guides  

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We  are  uncovering  beqer  ways  of  developing  sorware  by  doing  it  and  helping  others  do  it.  Through  this  work  we  have  come  to  value:  

Individuals  and  interacAons  over  processes  and  tools  Working  sorware  over  comprehensive  

documentaAon  Customer  collaboraAon  over  contract  negoAaAon  

Responding  to  change  over  following  a  plan  

That  is,  while  there  is  value  in  the  items  on  the  right,  we  value  the  items  on  the  ler  more.  

11  ©2011  Agile  Advantage,  Inc.    All  rights  reserved.  hqp://agilemanifesto.org/  

!   It  is  not  possible  to  completely  specify  an  interacAve  system.  Wegner’s  Lemma,  1995  

!  Uncertainty  is  inherent  and  inevitable  in  sorware  development  processes  and  products.  Ziv’s  Uncertainty  Principle,  1996  

!   For  a  new  sorware  system  the  requirements  will  not  be  completely  known  unAl  arer  the  users  have  used  it.  Humphrey’s  Requirements  Uncertainty  Principle,  c.  1998  

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!   Stack  Ranked  PrioriAzaAon  based  on  Business  Value  and  risk  

!   Self  organizing,  cross-­‐funcAonal  teams  

!  DefiniAon  of  Done  !   PotenAally  Shippable  Increments  

!  Velocity  !   ConAnuous  Improvement  

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Management Reserve!

(PV)  

Total Allocated Budget!

Time!Now!

Completion!Date!

$  PMB  

EAC  

Time  

Planned  Value  

(AC)  Actual  Cost  

Performance Management Baseline

EsAmate  at  Complete  

(EV)  Earned  Value  

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CPI < 1 CPI =1 CPI > 1

Over Budget On Budget Under Budget

SPI < 1 SPI =1 SPI > 1

Behind Schedule On Schedule Ahead of Schedule

Cost Performance Index (CPI=EV/AC)

Schedule Performance Index (SPI=EV/PV)

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!  Integrates  cost  and  schedule  management  

!  Forecasts  in  financial  units  based  on  units  used  for  actual  cost  

!  Decades  of  use  !  Part  of  PMBOK  (ANSI/PMI  99-­‐001-­‐2008)  

!  Part  of  EVMS  (ANSI/EIA-­‐748-­‐B-­‐2007)  

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!  Typical  implementaAons  expect  everything  fully  defined  up  front  

!  No  asserAon  of  quality  !  Claiming  value  earned  on  intermediate  work  products  

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Ugh!  

!  A  planning  package  is  a  holding  account  (within  a  control  account)  for  budget  for  future  work  that  it  is  not  yet  pracAcable  to  plan  at  the  work  package  level.  The  planning  package  budget  is  Ame-­‐phased  in  accordance  with  known  schedule  requirements  (due  dates)  for  resource  planning,  and  the  plans  are  refined  as  detail  requirements  become  clearer  and  the  Ame  to  begin  work  draws  nearer.  A  program  may  elect  to  break  the  work  assigned  to  a  control  account  into  smaller  groupings  of  tasks,  i.e.,  mulAple  planning  packages,  for  internal  planning  and  control  reasons.  

-­‐Earned  Value  Management  Systems  ANSI/EIA-­‐748-­‐B-­‐2007  

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!  There  is  no  standard  advance  planning  look-­‐ahead  period  (i.e.,  a  planning  “horizon”  or  “window”)  for  conversion  of  planning  packages  into  work  packages  that  is  appropriate  for  all  programs  or  condiAons.  Each  organizaAon  must  determine  its  own  policies  in  this  regard.  

-­‐Earned  Value  Management  Systems  ANSI/EIA-­‐748-­‐B-­‐2007  

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!  MathemaAcally  proven  that  Forecasts  based  on  average  velocity  (story  points)≡  esAmate  at  complete  EAC  (dollars)  

!  Key  AssumpAon:    The  raAo  of  (story  points  completed)/(total  story  points  in  a  release)  is  a  good  measure  of  Actual  Percent  Complete  

Sulaiman,  Barton,  Blackburn  “AgileEVM  -­‐  earned  value  management  in  Scrum  projects,”  2006  hqp://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=1667558  

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!  Release  Baseline  •  Budget  (BAC)  •  IniAal  Scope  •  Start  Date  

!  Each  IteraAon  (Sprint)  •  Points  accepted  by  Product  Owner    

– meets  DefiniAon  of  Done  •  Points  add  or  removed  from  release  scope  •  Actual  Cost  

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!  Now  we  can  focus  on  Value…  

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!  Because  the  performance  measurement  baseline  (PMB)  is  expressed  as  “number  of  story  points  planned”  rather  than  at  the  level  of  specific  tasks,  it  allows  course  correcAons  to  be  made  without  disrupAon  or  re-­‐baselining  of  the  PMB.    

!  This  addresses  the  criAcism  expressed  in  the  Defense  AcquisiAon  Reform  Findings  and  RecommendaAons  (DARFAR)  report  regarding  the  inability  of  tradiAonal  EVMS  to  idenAfy  issues  related  to  “contract  requirements  that  uqerly  failed  to  meet  warfighter  needs”  [House  Armed  Services  Commiqee  2010].  

23  ©2011  Agile  Advantage,  Inc.    All  rights  reserved.  

Agile  Methods:  Selected  DoD  Management  and  AcquisiAon  Concerns,  Carnegie  Mellon  University,  October  2011,  p.  63  

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!  Integrated  Cost  and  Schedule  informaAon  provides  beqer  insights  than  schedule  alone  

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!  Focus  on  delivering  value  !  Constraints  inform,  not  dictate  outcomes  

!  Quality  must  be  part  of  the  decision  process  

!  AgileEVM  helps  communicate  by  translaAng  points  to  dollars  •  Can  provide  alternaAves  to  contracAng  challenges  

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!   President:  Agile  Advantage,  Inc.  !   Former  CTO,  Development  Manager,  

PMO  Manager,  Agile  Coach,  Mentor,  CerAfied  Scrum  Trainer,  ScrumMaster,  Product  Owner  

!   AcAve  pracAAoner  delivering  value  using  Agile  and  helping  others  do  it;  from  small  Product  companies  to  very  large  organizaAons  

[email protected]    www.agileadvantage.com  Blog:  geHngagile.com  Twiqer:  brentbarton  

!   ArAcles  •  “Manage  Project  Por�olios  More  EffecAvely  by  Including  Sorware  Debt  in  the  Decision  Process”,  

Cuqer  Journal  2010  •  “AgileEVM  –  Earned  Value  Management  in  Scrum  Projects”,  IEEE  2006  •  “ImplemenAng  a  Professional  Services  OrganizaAon  Using  Type  C  Scrum”,  IEEE  •  “Establishing  and  Maintaining  Top  to  Boqom  Transparency  Using  the  Meta-­‐Scrum”,  AgileJournal  •  “All-­‐Out  OrganizaAonal  Scrum  as  an  InnovaAon  Value  Chain”,  IEEE