Agile EVM: Earned Value Management the Agile Way

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Summary:

Agile Earned Value Management (AgileEVM) offers a simple, lightweight method for integrating the benefits of traditional EVM metrics into your agile software development process without causing "drag" on team productivity. AgileEVM metrics can provide added value for project stakeholders, product and project managers, and Agile team members. In particular, AgileEVM adds a cost reporting component to the Agile toolkit that supports project decision making.

As an Agile team member, are you trying to figure out where you are, exactly, in the bigger picture of product development compared to where you are expected to be? Are you are working on a government contract where Earned Value Management (EVM) implementation is mandatory, but would like to use Agile software development methods? Perhaps you're an Agile project manager often "translating" Agile iteration results for non-Agile stakeholders? As a product manager, would you like to be able to forecast the impacts of changes on your expected return on investment? Let me introduce you to Agile Earned Value Management (AgileEVM).

This technique offers a simple, lightweight method for integrating the benefits of traditional EVM metrics into your Agile software development process without causing "drag" on team productivity. AgileEVM metrics can provide added value for project stakeholders, product and project managers, and Agile team members. In particular, AgileEVM adds a cost reporting component to the Agile toolkit that supports project decision making.

AgileEVM was born out of my own desire to accurately forecast expected costs at the completion of a fast moving Scrum project with uncertain requirements. As the ScrumMaster and Project Manager on a Scrum project where backlog items were being added, removed, or changed on a nearly daily basis, I was frustrated trying to forecast our expected final costs given the volatility of the project. It was during my ScrumMaster certification class that I asked the question "Has anyone used EVM or EVM-like metrics on Scrum projects?" The question was met with astonishment. "Why," my fellow classmates asked, "would you want to do that? EVM is waterfall. It's not Agile!"

Defining AgileEVM
As my frustration increased I began to search the available literature to find someone who had solved this problem. I had an "ah-ha" moment {sidebar id=1} reading a Wikipedia page defining EVM. The author wrote; " Since EVM requires quantification of a project plan, it is often perceived to be inapplicable to discovery-driven or Agile software development projects. ... Thus, the challenge is to create agile or discovery-driven implementations of the EVM principle and not simply to reject the notion of measuring technical performance objectively."  [1]

Determined to solve this conundrum I teamed up with Thomas Blackburn, a colleague and fellow ScrumMaster/Project Manager. We had what we felt was an appropriate solution: translating traditional EVM definitions into Agile terms. We were working to empirically prove its accuracy and importance on two projects. Early results were promising. The research effort really took off when I joined SolutionsIQ. Brent Barton, an experienced Scrum Trainer, project manager, and mathematician listened to our theories and reviewed our results.

Convinced that Thomas and I were on the right track, he worked with us to prove mathematically that the AgileEVM methods were at least as accurate as the current Agile burn down methods. The math proof, our research, and our empirical tests all pointed towards the accuracy and effectiveness of the AgileEVM techniques. The three of us wrote about our efforts and presented the results at the Agile 2006 conference.

The significance of the AgileEVM metrics was again demonstrated to be effective on two recent Scrum projects. On one project, an RSS feeds directory we calculated our AgileEVM metrics after the first Sprint of the second phase. The results supported our intuitive knowledge; we had more story points planned than could be developed by the release date. We shared these results with the Product owner and team members.

Together, we ran a number of "what-if" scenarios using the AgileEVM spreadsheet we had developed - exploring the impacts of various alternatives. The results?

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User Comments

1 comment
Leon Green's picture

Where can I find a copy of the Excel template for EVM?

December 4, 2013 - 5:43pm

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