Shim Marom has a nice series of posts about Earned Value. It this post he provides the calculation of Earned Value, or Budgeted Cost for Work Performed.
BCWP = BCWS x Percent Complete
Shim, then mentions that many times it is difficult to determine Percent Complete.
Here's where to start
This approach is independent of applying Earned Value. It should be used for all project work.
- The first step is to acknowledge that measuring progress to plan cannot take place through measuring the passage of time or consumption of money. Those measures just measure the passage of time and consumption of money. Those are useful measures, but they have little or nothing to do with the progress of the project.
- The agile world is quite proud of establishing "working software" as a measure of progress. Of course like all "new and innovative" things, it's been done before. 1978 TRW, One Space Park, Building O6, was my first series software development project out of grad school. The measure of progress to plan was - and still is - the compliance with the Planned delivery of a technical capability on the Planned day, for the Planned budget.
- Yep, that's how you measure Percent Complete. You plan what tangible evidence you will bring to the table to show that what you are working on actually works as planned.
- In today's world these are called Technical Performance Measures and they are part of a larger group of measures needed to show the project is making progress as planned.
Below are the other measures of performance.
- Mission Need - why are we building this project? What are we trying to accomplish with the outcomes of the project? State that in terms of a strategy. Balanced Scorecard is a nice simple way to do that for the project. Here's some Notes of Balanced Scorecard, that can be used to develop one for your project. Skip to page 51 to see how measures of the project itself are used to connect the dots between strategy and tactics.
- Measures of Effectiveness - are the operational measures of success that are closely related to the achievements of the mission or operational objectives evaluated in the operational environment, under a specific set of conditions. They are stated in units meaningful to the buyer. They focus on capabilities independent of any technical implementation. They are connected to Mission Success.
- Measures of Performance - characterize the physical or functional attributes relating to the system operation, measured or estimated under specific conditions. These are attributes that assure the system has the capability and capacity to perform. They are an assessment of the system to assure it meets the design requirements that satisfy the Measures of Effectiveness.
- Key Performance Parameters - represent the capabilities and characteristics so significant that failure to meet them can be cause for reevaluation, reassessing, or termination of the program. KPP's have threshold values that characterize the major drivers of performance that are considered Critical to Customer.
- Technical Performance Measures - are attributes that determine how well a system or system element is satisfying or expected to satisfy a technical requirement or goal. TPMs assess the design process, define compliance to performance requirements, identify technical risk. TPMs are limited to critical thresholds and include the projected performance of the deliverables to stay within those thresholds.
So when asked what is the percetn complete, take out the KPP's and TPM's and look at your delivered product to see if it is compliant with the planned values? Do ot weigh the proper amount for this point in the project, Does it go fast enough? Does it have the planned reliability? Can it process the transactions properly at the right rate. Does it provide the planned storage capacity.
Does it do what you planned it to do on the planned day you said it would, for the planned budget?
That's how you determine your physical percent complete. Here's a way to lay out those high level measures that will show where you need to assign these measures