What is Earned Value Analysis and how does the Sprint Review assist? This is a description of where Earned Value Analysis (EVA) fits in the context of Scrum. For those of you who are unfamiliar with Earned Value Analysis (EVA) and Earned Value Management (EVM), please see our earlier article “Using Earned Value Analysis for Project Management”. This describes EVA variables and computations and how to determine and report on Earned Value both in Traditional Projects and for Scrum Projects. We advise that you utilize EVA as an essential indication of Project status and Value delivered for every single Sprint Review. It plays a part in other areas of the Scrum Value chain too, such as Sprint Planning and Daily Stand-Up Meetings.

The Product Owner as Earned Value Manager

In a Traditional Project, the Project Manager would be accountable for calculating Earned Value. In a Scrum Project, the Roleplayer who is responsible for Earned Value Management is the Product Owner. The Product Owner is supported by the rest of the Scrum Team (Scrum Master, Product Owner and Development Team), when doing this. The frequency of updating Earned Value should be at least weekly, however this can be done even more frequently; each time a User Story is “Done”(complete), Earned Value for the Sprint and the Project as a whole has actually Changed, and the Earned Value can be recalculated.

Planned Value & the Sprint Review

Planned Value in a Traditional Project is straightforward, since it is normally based on Effort required to do the Work. This is the sum of all items in the WBS (Work Breakdown Structure), which belongs to the Project Plan.

In a Scrum project, Planned Value is based on the sum of the Value given to the User Stories that are to be completed. These Values are determined in the Sprint Planning Meeting; each User Story is Assessed for Complexity, rather than hours of Effort. This is since the time taken to finish the Work will vary depending on the experience of the Team member, but the Complexity can be agreed by the Team in the Planning Meeting. When all the User Stories have been Estimated, the Product Owner can utilize the sum of all the points to come to the accumulated Planned Value for the Sprint. The Planned Value graph is a straight line from zero to the accumulated Planned Value. This is because at the Planning Meeting none of the Work has been allocated.

If the Product Owner wishes to Refine the Planned Value curve, this can be Done by plotting the graph using the sequence of User Stories and their point Values in the Sprint Backlog. This should be the order in which the User Stories will be completed.

Determining Earned Value in the Sprint Review.

The calculation and updating of Earned Value is based on the outcomes of each Daily Stand-Up Meeting. The Stand-Up Meeting is a report of expected and actual progress a day at a time. Every time a User Story is declared to be “Done” (finished), the Earned Value for the Sprint and the Project Changes. There is only one “Earning Rule” used in computing Earned Value in a Scrum; that is the 0/100 guideline. That is because a User Story that has not met all the Acceptance Criteria is not “Done” and there is no such thing as partially completed in Scrum.

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Where a User Story has been accepted as “Done”, the points assigned to it during the Sprint Planning Meeting can be contributed to the Earned Value to date and the chart or graphs can be updated. Depending on the Project, this can take place immediately, or can be completed on a weekly basis. The Earned Value chart can be displayed beside the Sprint Burndown Chart, which it matches. While the final chart will be exhibited and discussed throughout the Sprint Review Meeting, there is absolutely nothing preventing the Product Owner from sending the current update to all the Stakeholders as any Changes are applied. If the Earned Value is matching or exceeding the Planned Value, the Stakeholders’ Confidence levels should be high. Where the Earned Value is not Meeting expectations, the Product Owner can choose to halt the Sprint and discuss with the Development Team on how to improve Value provided. This means the team does not need to wait for the Sprint Review, when it is far too late to correct any issues.

Talking About Earned Value in the Sprint Review.

Where the Earned Value (EV) has actually been aligned with or has actually outperformed the Planned Value, the Product Owner updates the EV chart on a regular basis. Ideally, the top of the Earned Value curve ought to converge the Planned Value curve. This indicates that every item in the Sprint Backlog has been Done. This does not always happen for a number of reasons:-

• The Team picked too much Work for the Sprint, and some requirements to be brought forward to the next Sprint.
• All the Work was completed, but was not “Done”, i.e. did not meet all the Acceptance Criteria, and needs to be taken forward to the next Sprint.
• The least vital Stories in the Backlog were not completed because the Team ran out of time, and it has been decided to drop these Stories entirely, as they are not important to providing a Working and feasible Product at the end of the Project.