Thursday, May 14, 2015

Earned Value Management and Agile Processes

I've recently been working with a client whose customer requires project reporting using Earned Valued Management metrics (EVM). It made me realise that, since they are also wishing to use agile methods, a paper I wrote back in 2008 could be relevant to them, and maybe a few others. When I looked for it online it was no longer available, so I thought I'd remedy that here. You can access the paper by clicking this link: EVM and Agile Processes – an investigation of applicability and benefits.

EVM is a technique for showing how closely a project is following both its planned schedule and planned costs. It's a superior method to simply reporting time and cost variance, since if the project has slipped but also underspent you cannot tell from the simple variances the degree to which the underspend has caused the slippage. EVM's cost efficiency and schedule efficiency (nothing to do with efficiency by the way!) can tell you this.

However agile methods do not have a fixed scope during their lifecycle and this can make EVM reporting effectively meaningless. The paper explains a technique for using the substitutability of User Stories, estimated in points, for overcoming this problem. If this is relevant to your business environment, I hope you find it useful.

Agile EVM has continued to develop since this paper and you can find more details and further references in the Wikipedia entry here: Earned value management: Agile EVM.

Citation: Andy Carmichael (2008). EVM and Agile Processes – an investigation of applicability and benefits, The 2nd Earned Value Management Conference, NEC, Birmingham UK, 12 March 2008.
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