Scrum focuses on maximizing Return on Investment (ROI), but it does not define how to manage and track costs to evaluate actual ROI against the vision. A cost measurement that integrates with Scrum would be an additional feedback tool. This article presents the adaptation of the Earned Value Management (EVM) approach to the Scrum framework. The result is called AgileEVM (Agile Earned Value Management) and is a simplified set of earned value calculations. From the values in Scrum, a release date estimate is derived using mean velocity. Using this equation, you can generate a similar equation with traditional EVM techniques, thus establishing the validity of using EVM with the Scrum framework. This technique was applied to two projects to validate the approach. This experience also helped to determine the utility of AgileEVM.
Earned Value Management (EVM) is a project management technique which measures technical performance, cost and schedule against planned objectives. The result is a simple set of metrics that provides early warnings of performance issues, allowing for timely and appropriate adjustments.
In his blog post “Earned Value versus Earned Schedule“, Glen Alleman discuss the concepts of Earned Value and Earned Schedule.