Earned Value in Agile

admin   February 11, 2018   Comments Off on Earned Value in Agile

Phani Thimmapuram

Do we really care about EVM in Agile?

Scrum is an Agile Project Management Framework. This framework specifically focuses on maximizing Return on Investment (ROI). Scrum, however, does not define how to manage and track costs to evaluate actual ROI against the vision. Earned Value is a project management technique to measure, at a specific date, the progress and performance of a project against the plan, and to estimate future performance. Earned Value considers 3 dimensions: 1) planned expenditures, 2) actual expenditures, and 3) budgeted expenditures for actual work accomplished. This provides a superior view into the project state than only looking at the first 2 dimensions.

Agile software projects make some assumptions that are fundamentally different from traditional projects, and this will affect whether and how earned value is applied. Traditional projects determine the scope up-front; scope change is infrequent. In Agile software projects, initial scope is not assumed to be complete. Scope is fleshed out as project iterations are completed, based on user & stakeholder feedback at the end of each iteration.

Performance Measurement Baseline (PMB)

Traditional EVM The sum of all work package schedule estimates (duration and effort).

AgileEVM Total number of story points planned for a release (PRP)

Planned Percent Complete (PPC)

Traditional EVM is what % complete did we expect to be at this point in the project? Can be a subjective estimate, or a calculation of the dollar value of the cumulative tasks planned to be complete by this point in time divided by the performance baseline.

AgileEVM: The number of the current sprint (n) divided by the total number of planned sprints (PS).

Actual Percent Complete (APC)

Traditional EVM is the dollar value of work packages actually completed divided by total dollar value of the budget at complete.

Agile EVM is the total number of story points completed (potentially shippable increments) divided by the total number of story points planned.