Establishing the Performance Measurement Baseline in Earned Value Management

 

If you’ve been following along with my monthly dive into The Practice Standard for Earned Value, you’ll know that I’ve been picking up a lot of tips along the way.

I’ll be honest – I don’t work on projects that use EV. However, that’s not to say that I can’t learn from the standard, and pick out things that apply to my non-EV projects. For example, last month I looked at the process around performance measurement methods, and it was good to refresh myself on different ways of tracking progress like discrete effort, apportioned effort and level of effort.

Those are tools I can use to think about progress tracking on any project, because you should know how you are going to measure success before you start, regardless of whether EV is part of your toolkit or not.

The Establish Performance Measurement Baseline is where we take all the scope, schedule and cost baseline info and blend it all together to create an integrated baseline from which to track performance.

It’s the guide against which we’ll measure ourselves and our project to ensure we are on track. I said last time that performance measurement methods was the most important part of the whole EV journey – now I’m not so sure. This integrated baseline is the starting point for project control, and what can we do if we don’t have that?

Perhaps I need to rethink my priorities and put this baseline at the top of the tree for EV components. (In reality, it’s all important, I guess.)

Inputs

There are four inputs to this process:

• Scope baseline (includes an approved version of the scope statement, WBS and WBS dictionary – basically, the full set of signed off scope docs)
• Integrated Master Schedule (we made this a few processes ago)
• Project budget
• Risk register.

The first three are pretty obvious, but what is the risk register doing in there? Aha – it’s all part of a holistic, robust way of looking at the work. The project plan includes the tasks, but the risk register includes another set of tasks: your risk management activities that help you implement the risk responses (and the budget required for those).

EV is a truly rounded way of looking at project scheduling, so it’s important to acknowledge that if the team are off doing risk mitigation work (or trying to optimise for opportunity risk), they aren’t delivering tasks from the ‘main’ project schedule. And you need to account for that time and effort. And budget. So it’s important that your risk activity is taken into consideration for the baseline.

What to do

There is a lot of work to do to integrate everything. Let’s hope that in real life software can do a lot of the heavy lifting for you. However, the standard sets out the steps that need to happen, regardless of whether your IT tools can make short work of doing them.

First, the team integrates all the different elements together. Take the scope, the schedule, the cost baselines and blend them all together with the risk response plans. You might not have all the detail for the full duration of the project, so do what you can with what you have – the rest can be progressively elaborated later as you get closer to the deliverables and know more about what is expected.

Next, check you’ve got your project budget base and management reserve figures.

Finally, create the performance measurement baseline. Blend the schedule and budget information together. It’s a time-phased view of what needs to be done and how much it costs.

Outputs

The outputs from this process are:

• The performance measurement baseline – which you just created, so no surprise there
• Project funding requirements updates – you might have had to make some decisions about budgets as part of creating the baseline. If so, consider what impact that has on funding and what you need to update
• Project document updates – if you decided anything different to what was in your documents, or identified new risks etc, you might have some updates to do in a range of documents. This is pretty standard project management practice; just keep everything updated and you’ll be fine
• Revised contract decisions – if there are any
• Formal acceptance – this is important! You’re creating a shared understanding of what the project is doing and how you will measure progress. Everything needs to be aligned and there can only be one version of the truth, for clients, the internal team, budget-holders and senior leadership. That’s why the acceptance is important.

There’s a lot that goes into this step, and a lot more covered by the standard than I can fit in here, with regards to this process. Take the time to get this right because it shapes everything else to come and how reliable your reporting is going to be. Remember, that’s why we are doing all of this, because the reports from EV are helpful and let us course correct as soon as possible to give us more chance of completing the project on time, on budget and to the desired scope.

Next time, I’ll be looking at the next process in the earned value management standard, which is analysing project performance. Now we’ve created that baseline, the next step is to get the project going and track our work against it.

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