Earned Value Management in Agile Projects

Khaleeji FZ LLC (UAE) Chapter

Marcos is a project manager in Dubai.

A great number of project managers still find some restrictions related to projects using agile methodologies, claiming things such as:

  • “The scope is opened.”
  • “The forecasts are missed.”
  • “I do not know how much it will cost.”
  • “I do not have any metrics.”

Actually, this is not true. You can apply one of the most important management techniques to check the health of your project, which is known as earned value management (EVM). For that, you will need only the following (which are more fully explained below):

  1. The number of sprints or iterations your project has
  2. The number of sprints or iterations that have occurred previously
  3. How much work is required to complete your project (minutes, hours, days or any other metric)
  4. How much work has been done to date
  5. The initial estimated cost for your project
  6. The current actual cost for your project

Once you have this information (which ought to be readily available), then you can calculate the following:

  • CPI: Cost Performance Index
  • SPI: Schedule Performance Index
  • CPV: Cost Performance Variance
  • SPV: Schedule Performance Variance

Let’s do a practical example:

  • Estimated Sprints = 4
  • Number of sprints done = 1
  • Number of estimated story points = 200
  • Number of story points done = 40
  • Budget of the project = US$ 175,000

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