Agile Earned Value Manifesto - A Paradigm Shift in Enterprise Project Portfolio Management

About the Author:

Leo is a seasoned management consultant with over a decade of experience in strategic planning and innovation. Fluent in English, Spanish, and Portuguese, Leo holds an MBA from Florida International University and currently oversees a diverse portfolio of programs exceeding 30+ teams, with a budget exceeding $30 million.

Agile Enterprise Project Portfolio Management Earned Value Manifesto

Agile Earned Value Management offers a revolutionary approach that bridges the gap between the agility of Agile methodologies and the financial precision of Earned Value Management (EVM). By combining the best of both worlds, we can achieve a more accurate, transparent, and value-driven approach to project management. Agile EVM was outlined in a 2006 article by Sulaiman, Barton, and Blackburn (2006), EVM was later adapted for the Scrum framework; more recently, Agile EVM is widely used, as noted by Alex Zhezherau (2024), a product director at Wrike.

• Value-Driven Iteration: Every iteration should deliver tangible value, measured in both features and dollars.
• Agile Precision: Embrace Agile principles while maintaining the financial rigor of EVM.
• Story Value as Currency: Replace story points with dollar-based story values for a direct link to business outcomes.
• Fine-Grained Budgeting: Create detailed budgets for each business requirement to ensure accurate cost tracking.
• Iteration-Based Baselines: Establish BCWS at the start of each iteration for real-time performance tracking.
• Transparent Cost Tracking: Use a robust timekeeping system for accurate ACWP capture.
• Comprehensive Performance Metrics: Calculate Cost Variance, Schedule Variance, EAC, and ETC for a holistic view of project performance.

Core Principles

• Human-Centric Approach: Prioritize collaboration and problem-solving over rigid processes.
• Deliverable-Focused: Focus on functional software that meets customer needs.
• Customer-Oriented: Build strong relationships with customers and prioritize their satisfaction.
• Adaptability: Embrace change as an opportunity for improvement.

The Riddle of Agile Earned Value Management:

Like a flower, a project blooms through various stages. The petals represent metrics, the root represents planned work, the stem represents actual work, water represents earned value, and the bud represents variances. By understanding these elements, we can navigate project management with greater precision.

Conclusion

Agile Earned Value Management offers a powerful combination of agility, precision, and value-driven outcomes. By replacing story points with story value, creating detailed budgets, and utilizing earned value metrics, organizations can ensure that every iteration delivers tangible results and contributes to project success.

Acronyms

• EVM: Earned Value Management
• BCWS: Budgeted Cost of Work Scheduled
• ACWP: Actual Cost of Work Performed
• EV: Earned Value
• CV: Cost Variance
• SV: Schedule Variance
• EAC: Estimate at Completion
• ETC: Estimate to Complete
• CPI: Cost Performance Index
• SPI: Schedule Performance Index