40 Section 3
Quality planning can be key to a successful EVM implementation. Concepts for continuous improvement,
management responsibility, policy compliance, and auditing can all come into play in an EVM implementation.
EVM can be helpful in project benchmarking. Additionally, the project team should discuss how EVM will handle
delivery of products and services that do not meet quality expectations.
The communications planning approach should include the baseline reviews and approvals that are needed
and the stakeholders who need them. The reporting requirements (including variance thresholds), level of
integrated analysis (such as risk with schedule and costs), and requirements for updated analyses need to be
determined. The communications management plan defines thresholds for EV criteria of schedule variance
(SV), cost variance (CV), cost performance index (CPI), and schedule performance index (SPI) and notes when
stakeholders are informed and by what methods if thresholds are exceeded.
For procurement planning, the project team determines whether to use EVM for any procurements, and if
so, specific instructions for the vendor(s) may be required. Considerations for advance payments, retention
money for performance bonds, and payments for material on-site along with other procurement terms need
to be considered. In addition, the project team determines how the vendors will integrate EVM data into the
overall project’s EVM data and how performance measurement periods will be aligned. If EVM is flowed down
to vendors/subcontractors, then plans should be adjusted to acknowledge the need to develop how Schedule,
Cost, Risk, and other Project Management Knowledge Areas are fed from input provided by the vendors/
subcontractors.
Planning stakeholder engagement should consider how EVM will affect engagement efforts along with
EEFs and OPAs driven by particular stakeholders. The stakeholder engagement plan can address how the
EVM implementation will affect engagements, whether formal or informal. Where appropriate, stakeholder
engagement activities should be included in the PMB.
3.3 DEVELOPING DATA AND INTEGRATING THE SCOPE, SCHEDULE, AND COST
BASELINES CONSIDERING RESOURCES AND RISKS
The development and integration of the scope, schedule, and cost baselines need to be aligned with the plan/
criteria outlined in the project management plan and EVM-related OPAs. In most cases, this is an iterative process
that extends into the execution phase, especially when rolling wave planning is used. For the portion of the project in
which EVM is being implemented, integrated scope, schedule, and cost baselines need to be created, which will form
the basis for the PMB.
41
In creating the performance measurement baseline, five Knowledge Areas (Project Scope Management, Project
Schedule Management, Project Cost Management, Project Risk Management, and Project Resource Management)
need to be integrated (see Figure 3-1) in such a manner that the scope, schedule, risk, and cost are associated at a
common level across the baselines (either CA, WP, or activity) with an established performance measurement method.
Project Budget
Control
Accounts
(CAs)
Undistributed
Budget (UB)
Non-PMB
(Not measured by EV)
Management
Reserve (MR)
Performance Measurement
Baseline (PMB)
Planning PackagesWork Packages CR
CR
CR
CR Planning PackagesWork Packages
= Contingency Reserve
Figure 3-4. Performance Measurement Baseline (PMB) Creation
With the integration of the scope, schedule, and cost baselines, the organization of the project baselines needs to
be consistent. This should follow the PMBOK
®
Guide project budget components as outlined in Figure 3-4 (also see
the example in Appendix X4). When setting the budget, the project team determines which costs are in and out of the
project budget. Cost, such as indirect or overheads, following OPAs and EFFs related to the project, could be excluded.
Usually a management reserve (MR) has been determined, which is also typically outside of the cost baseline.
The project team also determines whether all or just a portion of the costs will be included in the integrated PMB.
42 Section 3
These provide the scope and schedule baselines that are integrated for the PMB. Note that contingency reserves can
be allocated at either the control account, work package, or planning package levels. During the planning process,
some scope/budget may not yet be distributed to a particular CA, but may be considered as part of the PMB. In this
case, the scope and its allocated costs are held in what is often known as undistributed budget (UB). One can look
at undistributed budget as a special CA that is holding scope with associated activities and costs that have not been
scheduled, therefore are not yet time phased into a planning or work package within a particular CA.
Control Account
Contingency
Reserve
Work
Package
Work
Package
Work
Package
Planning
Package
Control
Accounts
Work
Package
Control Package
Contingency
Reserve
Activities
Activities
Activities
Figure 3-5. Control Account Components
Once the CA structure is set, detailed planning occurs within the CA with work packages, planning packages, and
a contingency reserve (see Figure 3-5 and the example in Appendix X4). The project team decides to what level the
scope, schedule, and cost baselines will be integrated (i.e., at the CA or work package or activity level). At a minimum,
scope, schedule, and cost should be integrated at the CA level, but can be further broken down with the performance
measure method applied down to the scope within an activity level along with schedule and costs.
Future scope, especially when a rolling wave concept is being used, can be put into CAs with only planning
packages. These future CAs can be a summary of what is eventually broken out into more detailed work packages or
possibly a separate CA. (In some industries, the CA that summarizes future work is called a summary-level planning
package.) A CA with only a planning package is often used so all project work that will have EVM applied can be
43
planned to some level within the integrated baseline at the start of the project. This collection of near- and future-term
CAs forms the PMB.
Sections 3.3.1 through 3.3.5 describe concepts that the project team should consider within each Process Group.
Each of these elements need to be integrated to establish the basis for the PMB portion of the project budget.
3.3.1 RESOURCE MANAGEMENT
Resource management is where the level of management effort is determined, which sets the OBS and the structure
of responsibility within the RAM. This process sets the management structure by determining the CA structure, which
sets the lowest level by which the project will be managed.
3.3.1.1 ASSIGN RESPONSIBILITY WITHIN AN ORGANIZATIONAL BREAKDOWN STRUCTURE (OBS)
Projects can be undertaken within the existing structure of an organization or under a structure tailored for the
particular project. Often integrated teams are used, with combined resources from various organizations. Various
approaches can be taken depending on the needs of the project and the organizational policies. In either case, the
organizational structure for the project itself should reflect the lines of authority and communications within the
project. It should also reflect who is responsible for accomplishing the work.
The resulting structure used by the project team becomes the organizational breakdown structure (OBS) used within
EVM. The OBS, whether a hierarchical representation of the project organization, an integrated team structure, or some
other hybrid structure illustrates the relationship between project activities and the responsible organizational units
that perform those activities. The structure relates the control accounts to the organizational units with established
lines of communications.
3.3.1.2 INTEGRATE WBS AND OBS INTO THE RESPONSIBILITY ASSIGNMENT MATRIX (RAM)
Integrating the WBS on one axis of a matrix and the organizational structure on the other axis helps the team
illustrate how the work and the responsible organization are integrated. Initially, the individual or team assigned the
responsibility for any given element of work may or may not be identified. As with other aspects of the project, the
OBS can evolve through the rolling wave process or in other phases of the project.
Following the initial work integration, the project manager collaborates with the appropriate organizational
managers (frequently called functional or line managers) to identify the individual or team who will be assigned with
44 Section 3
the responsibility and authority for performing the work. That individual/team should participate, if not lead, the effort
which determines and develops the budget and schedule to accomplish that work (i.e., the what, when, and how
much of the work).
The responsibility assignment matrix (RAM) (see Figure 3-6 and the example in Appendix X4) shows the integration
of the work in the WBS and the resource management structure in the OBS. In Figure 3-6, the OBS is structured with
integrated project teams (IPTs), which group resources into teams. The RAM provides a visual that helps ensure each
element of the project scope is assigned to a person or a team for management. The RAM delineates levels of control
and responsibility and indicates the authority levels for the project.
The CAs for a project are determined by deciding which OBS and WBS intersections make up the CAs. All of the CAs
do not need to be created at the same level of the WBS or OBS; therefore, many options are available to the project
manager. Figure 3-6 noted two CAs which are at the same OBS level, but different WBS levels.
Figure 3-6. Example of Responsibility Assignment Matrix (RAM)
Responsibility Assignment Matrix with Work and Organizational Breakdown Structures
Program A
RAMWBS OBS
WBS Title
01 Project Name
1.1 Project Management
1.2 Planning
1.3 Smart Building
1.3.1 Building
1.3.2 Information System
1.4 Handover
OBS Title
01 Project Team
01.01 Controls Team
01.02 Design Team
01.03 Construction Team
01.04 Scrum Team
# Control Account WBS OBS Budget
CA-001 Project Management 1.1 01.01 $336,000
CA-002 Planning Phase 1.2 01.02 $67,700
CA-003 Construction 1.3.1 01.03 $928,080
CA-004 Information System 1.3.2 01.04 $61,280
CA-005 Handover Phase 1.4 01.01 $13,000
PMB $1,406,760
Management Reserve $93,240
Project Budget $1,500,000
The CA is a management control point where scope, budget, actual cost, and schedule are integrated and compared
to EV for performance measure. When determining whether a group of work (the WBS) and organizations (the OBS)
should be pooled into a CA, the following considerations should be addressed:
Will the work be performed by one or more functional organizations or a multifunctional integrated project team?
Using an integrated team may allow the effort to be collapsed into a single CA, while the use of various
functional organizations may require a different CA for each responsible organization. Often, previous CAs
close and new CAs open as the project migrates from one rolling wave milestone to another. The different CAs
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