Agile Earned Value Management (EVM)

Earned Value Management (EVM) is a project management technique that measures the technical performance, cost and schedule of a project against planned objectives. The result is a simple set of metrics that provides early warnings of performance issues, allowing for timely and appropriate adjustments.

EVM improves also the definition of project scope and provides valuable metrics for communicating progress to stakeholders. To implement EVM, you need to measure some basic metrics like a valuation of planned work, called planned value (PV). Although EVM can be considered an approach used mainly for Waterfall projects, it can also be applied usefully to Agile and Scrum approaches to software development, especially in the case of large systems.

Agile Earned Value Management (EVM) for Scrum Projects

AgileEVM is a lightweight and easy to use adaptation of the traditional Earned Value Management technique which provides the benefits of traditional Earned Value Management for Scrum. One of the issues when using EVM in Agile is that you have to calculate an upfront quantification of the project scope, something that some Agilists might be reluctant to define as they don’t want to quantify a scope further than the first iterations or sprints in Scrum. It is however possible to implement EVM in Scrum using only three basic planning parameters: Backlog, Velocity and Cost. These items provide the baseline measures to assess the scope, throughput and cost. More recent thoughts on how to scale Scrum for larger systems have introduced the concept of release that can help define some scope and estimate the planned value.

Experience shows that using simple EVM performance metrics associated to the traditional Agile metrics like the sprint burndown chart provide objective analysis to share with all the Scrum project stakeholders. The early warning that the Agile Earned Value Management metrics show, validates changes to release plans and provides business with the opportunity to make priority trade-off decisions early in the project lifecycle.

References

Earned Value Management on Wikipedia

Measuring Integrated Progress on Agile Software Development Projects

Implementing Earned Value Management in Agile

EVM (Earned Value Management) vs. Agile Project Management

Agile Earned Value Management

Agile and Earned Value (pdf)