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Build a Performance Measurement Baseline (PMB)

Build a Performance Measurement Baseline (PMB). Why Plan?. “ Plans are nothing, planning is everything.” - General Eisenhower. Pros - Plans used to communicate solicit support gain approval manage risks increase effectiveness integrate SS$ (Scope, Schedule, Budget)

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Build a Performance Measurement Baseline (PMB)

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  1. Builda Performance Measurement Baseline (PMB)

  2. Why Plan? “Plans are nothing, planning is everything.” - General Eisenhower • Pros - Plans used to • communicate • solicit support • gain approval • manage risks • increase effectiveness • integrate SS$ (Scope, Schedule, Budget) • measure progress • Cons - Planning is • tedious • time-consuming • may produce questions we don’t want asked • “we do not need it” ELO1.3, 3.2 • To PREVENT problems

  3. PMB Development Process Evaluate, Negotiate, Best Value Contract Develop Acquisition Strategy based on risk Work Scope, Schedule Budget (SS$) Develop RFP to tell bidders what you want. Perform Work & Measure Performance Establish Contract Baseline (SS$) Develop Proposal Management 1. Assess Risk Performance Information l l Technical 2. Set Aside MR 3. Distribute SS$ Cost GOVERNMENT PM decides to obtain a material solution to a threat. ELO1.3, 3.2 CONTRACTOR decides to bid for the business.

  4. First - Withhold Management Reserve • Contractor contingency budget (No scope, no schedule) • Amount based on risk assessment • Use MR for future work; in-scope to contract, yet unforeseen tasks. (As the project proceeds, we become more enlightened) • Contractor PM decides when to use (NOT for use on completed work to eliminate negative variances!) • Contractor PM notifies Govt PM when used. Contingency $ ELO1.3, 3.2

  5. Now on to developing your PMBThree Steps to Success... Define the work to be done in terms of tasks and underlying assumptions. Classify work (discrete, apportioned, Level of Effort) and assign EV methods (appropriate to the work classification.) Specify a timeline of when the work tasks will begin and end in terms of calendar dates,order,duration. Assign resources: people (who will do the work, how many hours, minutes), equipment, facilities • Identify constraints & interrelationships ELO1.3, 3.2

  6. 1. Define Work Scope 2. Schedule the Work 100 40 60 Baseline Development - Define the Work Total Allocated Budget (TAB) MR $ PMB 3. Allocate Budgets to Work Time

  7. Baseline Development - Define the Work 1. Define Work Scope 2. Schedule the Work 100 40 60 Total Allocated Budget (TAB) MR $ Avionics $ Propulsion Training PME 3. Allocate Budgets to Work Software Time

  8. 1. Define the Work Scope 2. Schedule the Work 100 40 60 Baseline Development - Schedule the Work Total Allocated Budget (TAB) MR $ PMB 3. Allocate Budgets to Work Time

  9. 1. Define the Work Scope 2. Schedule the Work 100 40 60 Baseline Development - Assign Resources to Work Total Allocated Budget (TAB) MR 2 2 4 $ 4 5 4 PMB 5 2 2 3. Allocate Budgets to Work 4 5 Hours/Minutes /$ Time Now, draw the Line

  10. Draw the PMB ELO1.3, 3.2 $120 $100 An “S” Curve $80 BCWS $60 $40 $20 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Cumulative BCWS Over Time

  11. Contract Price Fee/Profit TAB Management Reserve ($) PMB Components ELO1.3, 3.2 Total Allocated Budget CBB NCC + + AUW OTB Performance Measurement Baseline - Risk Contingency - No Scope or Schedule Control Accounts Undistributed Budget (SS$) - Temporary Account Work Authorized, not yet definitized. Work broadly defined & scheduled Planning Packages Work Packages - Integrated Scope, Schedule & Budget - Detailed Plans/Definition - Integrated Scope, Schedule & Budget - Broader Plans

  12. Build an Integrated PMB Work Site PMB Integrate - Assign schedule and resources to associated technical work. Dr. EV Lessons BAC BCWS BCWP Eagle Exercise How much work is really done? EV Methods Exercise Pyramid Opinion Paper Study Plan Measure Progress ELO1.3, 3.2, 3.4, 3.5 Using objective measures of physical progress

  13. Build an Integrated PMB • How to start? • Identify Organizational or project mission, and goals. • Identify job - specific goals. • Now identify PMB Components • 1. List specific activities, i.e., work packages, at the performing level. • 2. Assign each activity a schedule duration and sequence (planned start & stop dates) • 3. Allocate resources to each activity (dollars, hours, or other measurable unit) (Recommend hours and minutes for your BCF-102 PMB’s.) • Assign EV Methods • Assign an appropriate metric or EV method for each activity/work package.

  14. How to start? Identify PMB Components • Define Technical Work Scope • Define Tasks • Complexity • Quantity • Quality ‘gates’ • Performance Metrics • Schedule the work • Key Milestones • Activities • Duration • Order • Constraints & Interrelationships • Outputs • Realistic Plan • Objective Metrics • Valid Forecasts • Cost • Schedule • Early Warning! • Avoid unpleasant surprises (overruns and schedule slips) • Allocate Resources to Work • Type • Level • Quantity • Overhead • Equipment ELO1.3, 3.2

  15. 1. Define Work Scope 2. Schedule the Work 100 40 60 Building a PMB - Define the Work - include quality gates! Total Allocated Budget (TAB) MR $ PMB 3. Allocate Budgets to Schedule Time Definition of work quality at completion is key.

  16. Identify Work Categories - classify each activity as one of 3 specific categories of work. • Discrete Effort • Is work having a finite beginning and ending. • Work has a specific end product or result • Apportioned Effort • Work directly related to discrete labor or material tasks, having an historical dependent relationship, i.e., quality assurance • Level Of Effort (LOE) • Work with no definable end product or result • Work is measurable only by the passage of time; i.e., LOE is not measurable. • Identifying work as one of these 3 categories leads to the appropriate selection of a metric or EV method used to measure physical progress. ELO1.3, 3.2, 3.3, 3.4, 3.5

  17. Define the Work • Identify activities, tasks and assumptions • Identify and define all SOW requirements • Assign work to Control Account Managers • Control Account Managers negotiate the work scope, schedule & budget with contractor PM ELO1.3, 3.2

  18. CWBS Dictionary When the same work seems to appear in different Control Accounts, contractors will use a CWBS Dictionary as a vehicle to define WBS Control Account elements in sufficient detail to eliminate work duplication and overlapping OBS responsibilities.

  19. The Control Account • A key management control point: • The lowest management level accountable for elements of work, scope, and schedule • Control Account Managers: • Establish the Integrated Plan - BCWS • Determine value of work done -BCWP • Collect actual costs -ACWP (Actual costs are not calculated, but come from the Accounting System, derived from time cards, purchases, etc.) • Assess Variances to the Plan • EstimateImpacts of Problems • Devise Workaround Plans - Take action! How much work is done? ELO1.3, 3.2, 3.3, 3.4, 3.5

  20. Contractor’s Organization - Where is the Control Account Manager ? * WORK BREAKDOWN STRUCTURE (WBS) IPT LEVEL 1 CONTRACT LEVEL 2 ENGINE ENGINE TRAINING LEVEL 3 FAN COMPRESSOR CONTRACTOR PM FAN ORGANIZATIONAL BREAKDOWN STRUCTURE (OBS) LEVEL 4 FAN ASSEMBLY FULL SCALE RIG COCKPIT CASE ASSY ROTOR ASSY STATOR ASSY INLET ASSEMBLY CONTROL ACCOUNT ROTOR CONTROL ACCOUNT WING SOLDER ING CONTROL ACCOUNT CONTROL ACCOUNT Work Packages * (aka Cost Account Manager)

  21. 1. Define the Work Scope 2. Schedule the Work 100 40 60 Build a PMB - Schedule the Work Total Allocated Budget MR $ BCWS cum PMB 3. Allocate Budgets to Schedule Time Assign duration, sequence, identify relationships

  22. The Scheduling Process • A master schedule should reflect key contract milestones and technical events • A formal scheduling system must establish and maintain both vertical and horizontal trace ability • Program managers must become familiar with contractor’s scheduling process, software selections, and presentation styles. • The PMO should not specify a scheduling system. • Take the time to know and understand the workings of your contractor’s system! ELO 3.5

  23. VERTICAL AND HORIZONTAL TRACEABILITY • Vertical trace refers to the requirement to have formal, procedures that enable and require trace ability of milestones from the master schedule down through the work package level and back up to the master schedule. • Accurately depict status at each level • Horizontal trace refers to the requirement to have formal, systematic procedures to identify the predecessor and successor Control Accounts for each Control Account. • Enable early warnings for Control Account Managers ELO 3.5

  24. Vertical & Horizontal Trace ability l l l PROGRAM LEVEL CONTRACT MASTER PROGRAM SCHEDULE The master schedule and lower level schedules must be traceable both VERTICALLY and HORIZONTALLY l l l l l l l l l Tier 1 MAJOR EVENT OR FUNCTIONAL ORGANIZATION MILESTONE SCHEDULE s s INTERMEDIATE LEVEL s s s s This schedule does notshow horizontal relationships. s s s s s s Tier 2,3 etc. s s DETAIL LEVEL s s COST ACCOUNT WORK PACKAGE SCHEDULES s s s s s s s s Tier 4,5,6 etc. ELO 3.5

  25. Common Schedule Presentation Techniques • Network Schedules • Depicts relationships among activities, tasks • Depicts activity status and critical path tasks • Milestone Charts • Depict status of specific events, goals • Gantt Charts • Depict status of activities, tasks, events • Line of Balance • Depicts production line status ELO 3.5

  26. 1st Quarter 2nd Quarter 3rd Quarter Program Direction Facility Mod Sys Integ ADPE Install Auto Checkout Integration Test Now ACTIVITIES TIME Program Direction Facility Mod Sys Integ ADPE Installation Auto Checkout Schedule Presentation Techniques Milestone Network Task B Task A Gantt Task D Task E Task C Program Complete Program Start Task F Task G ELO 3.5 Now

  27. Contract Master Schedule Tier One Task Name Budget ID '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 1 Design $4,000,060 2 $6,000,030 Manufacture Component Tst $4,000,000 3 Assemble $2,000,000 4 5 Integrated Test $4,000,000 ELO 3.5

  28. Intermediate Schedule Tier Two ID WBS Task Name '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 1 1 Pyramid Program 1.1 2 Design Pyramid Overall Design 3 1.1.1 4 1.1.2 Internal design CA 1.1.3 Block design 5 1.1.4 Assembly Equipment Design 6 Level 1 design CA 1.1.5 7 Level 2 design 1.1.6 8 1.1.7 Level 3 design 9 1.1.8 Level 4 design 10 1.1.9 Level 5 design 11 1.1.10 Level 6 design 12 1.1.11 Level 7 design 13 1.1.12 Level 8 design 14 Level 9 design 1.1.13 15 1.1.14 Level 10 Design 16 ELO 3.5

  29. Task Name ID Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Internal Design CA 1 Internal Layout WP 2 Al, Bob External Entrance WP 3 Charlie, Doug[0.5] 4 Main Chamber WP Vault 5 Ed Lighting 6 Frank Entryways 7 Ed, Frank Surprise 1 8 Frank, Ed Surprise 2 9 Frank, Ed 10 Staff WP Hank Goodies WP 11 Ike 12 Level 1 Tunnels WP Al[0.5],Bob Level 1 Surprises WP 13 Surprise 1 14 George, Al[0.5] Surprise 2 15 George, Al[0.5] 16 Surprise 3 George, Al[0.5] 17 Level 2 Tunnels WP Charlie, Doug 18 Level 2 Surprises WP 19 Surprise 1 George, Doug[0.5] 20 Surprise 2 George, Doug[0.5] Surprise 3 21 George, Doug[0.5] Burial Suite Drawings 22 Keith,Ed,Frank,Charlie Entrance Drawings 23 Moe,Keith,Doug ELO 3.5 Detail - Work Package Level - Schedule Tier Three

  30. 1. Define the Work Scope 2. Schedule the Work 100 40 60 Build a PMB - Allocate Resources Total Allocated Budget MR $ PMB 3. Allocate Budgets to Work Time Now, draw the Line

  31. Identify Tasks and Allocate Resources LABOR MATERIAL OTHER TOTAL TASK 1 5 2 0 7 TASK 2 5 6 0 11 TASK 3 20 8 0 28 5 4 0 9 TASK 4

  32. JAN FEB MAR APR MAY JUN JUL AUG SEP TASK 1 2 3 2 TASK 2 2 5 4 TASK 3 6 10 6 5 1 TASK 4 1 4 4 Spread the Budgets Over Time 2 5 7 10 10 6 6 5 4 BCWS Total

  33. JUL JAN FEB MAR APR MAY JUN AUG SEP 2 3 2 TASK 1 2 5 4 TASK 2 6 10 6 5 1 TASK 3 1 4 4 TASK 4 2 5 7 10 10 6 6 5 4 Monthly BCWS Cumulative BCWS 14 7 2 24 34 40 46 51 55 Assign Resources - BCWS

  34. The Rolling Wave Process Given a requirement to schedule all the project work, describe a planning process often used to plan the overall effort to a certain level, such as the Control Account, and progressively plan to the detail level as the work proceeds, trying to stay several months ahead with the detail planning. ELO1.3, 3.2, 3.3, 3.4, 3.5

  35. Rolling Wave Planning Concept • Not feasible to detail plan far-term contract tasks; assign work to broadly defined planning packages. • Detail work packages as far into the future as practical to maintain baseline integrity. • Draw down packages in increments or “waves” • Assign earned value methods to work packages. ELO 1.3, 3.2, 3.3, 3.4, 3.5

  36. Rolling Wave Work Package Planning Process WP 1 - 50/50 8 WP2 - 0/100 4 10 5 5 5 10 WP3 - MS 20 WP4 - 50/50 8 5 5 5 5 5 WP5 - MS 30 5 10 WP6 - 0/100 5 WP7 - MS 60 10 10 15 20 5 5 WP2 - LOE 80 10 15 15 10 10 20 BCWS = detail planned work packages 90-day rolling wave = broadly defined planning packages Planning Packages scheduled to start 90 days from now are drawn down and detail planned to their logical conclusion, whether 3 months, 8 months, 24 months, for example. Time Now

  37. Earned Value Methods Assigned to Work Packages WP 1 - 50/50 8 WP2 - 0/100 4 5 5 10 WP3 - MS 20 WP4 - 50/50 8 5 5 5 WP5 - MS 30 5 10 WP6 - 0/100 5 WP7 - MS 60 10 10 15 20 5 WP2 - LOE 80 10 15 15 10 10 20 BCWS BCWP ACWP CV SV

  38. 30 0 0 / 100 % 1 Month 15 15 50 / 50 % 2 Months 35% % Complete Varies Weighted Milestone 3 or More Months 5 15 10 10 10 10 Level of Effort Varies Apportioned Effort 5%WP3 5%WP3 Varies 5%WP3 5%WP3 SOME EXAMPLES..Earned Value Techniques LENGTH METHOD BCWP CALCULATION 10 25 15 20 Milestone + % Next Milestone Varies

  39. Activities Below Work Packages • The contractor’s selection of work package levels, size, and duration is critical to efficient management and valid measures of progress. • The work packages must be defined sufficiently to avoid duplications. • EV methods assigned to work packages must be appropriate for the type of work. • Work packages are measurable, have a finite beginning and ending, and form the basis for measuring progress. • The contractors’ flexibility to move, change, re-phase activities lies below the work package level. • They must be careful not to artificially constrain work packages to exceedingly low levels. This can be an administrative nightmare. Work package Activities that make up a work package

  40. Build a PMB Summary • Plan and Define all authorized work; Identify key contract milestones and events. • Scheduleevents realistically; Identify risk areas • Assign resources; labor, material, other direct costs in dollars, hours, other measurable units. • Integrate work scope with achievable schedules and appropriate resources. Then... • Measure progress using objective metrics. ELO1.3, 3.2, 3.3, 3.4, 3.5

  41. Disciplined, Integrated Planning Process is Key to Managing Risk • EVM principles: Planning, Integration & Measuring Performance employs the PMB to: • Surface risks and potential risks • Provide insight into cost and schedule impacts • Provide ability to develop realistic alternatives • Surface undisciplined practices or data manipulation ELO 1.3, 3.2, 3.3, 3.4, 3.5

  42. The Relevancy of PMB Changes • The original PMB and subsequent changes must support program goals, objectives, and milestones. • Baseline integrity must be maintained through any changes - SS$ • Changes must be made in a timely manner • Current budgets must reconcile with prior budgets • Control and obtain approval for retroactive changes • Document all changes - Budget Baseline Log, etc. • Always ask, “Is the PMB executable?” ELO 3.3

  43. Three Types of PMB Changes ELO 3.3 • Contract Changes • Authorized and negotiated • Authorized but not yet negotiated • Internal Re-planning • Original schedule or individual tasks change • Total scope remains the same • Contractors re-plan at their discretion • Formal Reprogramming or Over-Target-Baseline (OTB) • Remaining budget and/or schedule is unrealistic • New Budget at Complete will exceed the Negotiated Contract. • PM agreement is key (would not do an OTB unless PMO has adequate funding to cover the overrun.) Only One Reason to change a PMB… To have a realistic plan to work toward.

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