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Tips for Conducting an Earned Value Management System Requirements Analysis

For companies evaluating their options for earned value management tools, a common best practice is to conduct a requirements analysis useful for identifying gaps in their project control system.  This is particularly true for a company that wants to incorporate earned value management practices so they can comply with government contractual requirements to use an earned value management system (EVMS). 

Should you find yourself in this position, often the first step is to define your business requirements and objectives.  What business issues are you trying to resolve?  How will purchasing a new software tool help?  Clearly articulating your issues, business needs and objectives provides a framework to determine the areas where a software tool can help fill in the gaps or improve the current process and procedures.  The goal is to establish an objective basis so you can do fact-based comparisons to determine which software tool would work best for your environment. 

Here are some tips that can help you get the most value from conducting an earned value management system requirements analysis.

Tip #1. Use an independent third party with a proven track record in conducting earned value management system requirements analysis.

What to look for in an independent third party:

  • Qualified personnel. Look at the resumes included in the proposal for conducting the requirements analysis. You want people who have years of direct experience designing, implementing, and using earned value management systems as program managers, project managers, control account managers, master schedulers, and cost analysts on a variety of projects. You want the hands-on “doers” who have lived through Integrated Baseline Reviews (IBRs), EVMS compliance reviews, and surveillance reviews. Look for people who have been DCMA review directors or have been in charge of a company’s self-surveillance process. Why is this important? You want experienced practitioners with an intrinsic understanding of what does and doesn’t work. People with a passion for doing things right can provide practical solutions and help you avoid common mistakes they have seen other companies make.
  • Standards based framework for the requirements analysis. For a requirements analysis to identify gaps in your project control system to support an EVMS, the framework should be the EIA-748 Standard for EVMS process areas and 32 guidelines. This includes organizing the work, planning and scheduling, budgeting and authorizing the work, accounting considerations, analysis and management reporting, and managing changes. Risk and opportunity management should be woven into that framework. The requirements analysis should include a schedule and cost data quality assessment because it provides an indication of potential process gaps. Conducting interviews with key functional corporate personnel, project managers, control account managers, schedulers, and others should also be part of the analysis process because it provides an indication of management commitment and overall project management culture within the company.
  • Actionable requirements analysis deliverables.  Ask about the scope of the deliverables.  It should be something more than a summary PowerPoint out brief.  You want tangible and executable recommendations with fact-based data.  Ideally, the recommended actions provide the foundation to help you determine how you can objectively measure the results of updating your process and procedures as well as implementing the new software tool.  What is the tangible result of improving data quality, streamlining a process, or improving management visibility into the likely estimate at completion of a project?  Perhaps the time a control account manager needs to spend every week on their project control tasks is cut in half freeing them up to focus on other things.  Perhaps corporate management now has better visibility into the profit or loss margins on a portfolio of projects. 
  • Experience with a broad range of scheduling, cost management, performance analysis, and risk management tools.  Why is this important?  It helps to know the pros and cons of the various commercial off the shelf (COTS) software tools.  Sometimes a multi-vendor, “best of breed” solution is a better fit.  Sometimes it is a matter of improving how you use current tools such as Microsoft Project or Oracle Primavera P6 so you have quality schedule data to integrate with your cost management tool.  An experienced, unbiased third party can help you sort out what is a process or software tool issue to create effective solutions for your business environment and user community.

What to avoid:

  • Offers to conduct a requirements analysis or system assessment from a software vendor.  This is a conflict of interest.  There is a zero probability of the vendor recommending something other than their software tools to solve your business issues.  Their "assessment" personnel are not EVM practitioners who have to live with the recommendations they propose to you.

 

Tip #2. It’s more than just the software. 

A common misconception is that software will solve all business issues, including achieving an earned value management system “compliance.”  It is always about the people and having a useful process they can follow.  The project control process as implemented on a project must support the requirements identified in the EIA-748 Standard for EVMS.  It is not the software that must be “compliant” to the standard.  The software tools are there to support the process people use to do their day-to-day project control tasks. 

This is another area where an independent third party can help you to take advantage of software tool features to improve your process and procedures.  For example, they can help you establish common best practices for creating quality resource loaded schedule data with the applicable activity coding so you can create reliable schedule driven time phased budget data in the cost tool.  The current schedule data can then be the basis for claiming work package earned value in the cost tool as well as producing estimate to complete data.  Quality estimates to complete are essential for producing credible estimates at completion.

Another common problem area is managing changes.  Perhaps the software tool has a built-in change control workflow process with data-backed automated forms designed to help project control teams manage changes and simplify the process.  If change control is a major gap in your project control system, the software tool can help you to establish an easy to follow process. The independent third party can help you create user-focused process and procedures using your toolsets of choice.

Tip #3. Do Your Homework

Use your professional network or get client referrals for the third-party reviewer and software tool vendor.  For the third-party reviewer, this can help you gain an understanding of the quality of their personnel, requirements analysis process, and deliverables. 

For the software vendor, the goal is to gain an understanding of the tool’s architecture, history, update cycles, and the ability to support government reporting requirements.  What is their reputation in the industry?  How quickly do they respond to software issues or improvement requests?  Verify what is built into the tool.  Do you need to buy a “suite” of tools to address your needs?  Beware of offers of “free” add-ons.  They are often legacy tools that are not actively maintained and the software vendor wants to lock you into their solution set.  Verify whether project control personnel will actually use the add-on tool.  You may not pay for the software up front.  However, you will incur an annual maintenance fee, often 20% or more of the list purchase price, regardless if you use the software or not.  The cost of ownership just went up.  That software isn’t free.

Need a Place to Start?

If you need a starting point to define and document business requirements to assist in your software selection process, see the ProjStream EVM Software Buyers Guide

Topics: EVM software, project control process, government requirements

Author: Jeff Lutton