How can we go about Calculating Earned Value in Scrum Projects, and what does the Sprint Review Meeting Offer to this process? The Sprint Review and the Sprint Retrospective are often misunderstood. A Sprint Review Meeting is for reviewing the Sprint Deliverables. It is a time for the Product Stakeholders to provide feedback on the Sprint Deliverables. A Sprint Retrospective is a meeting where the Scrum Team can review the Sprint Processes. This provides the feedback needed to improve future Sprints. The Sprint Review is where Earned Value Analysis (EVA) meets Scrum.

For those of you who are unfamiliar with Earned Value Analysis (EVA) and Earned Value Management (EVM), please see our earlier post “Using Earned Value Analysis for Project Management”. This describes EVA variables and computations. It discusses how to compute and report on Earned Value both in Traditional Projects and for Scrum Projects. EVA as a crucial indication of Project status and the Value delivered for every Sprint Review. It plays a part in other areas of the Scrum Value chain, such as Sprint Planning and Daily Stand-Up Meetings.

Calculating Earned Value & The Earned Value Manager

In a Traditional Project, the Project Manager would be accountable for determining Earned Value. In a Scrum Project, the Roleplayer who is accountable for Earned Value Management is the Product Owner (Voice of the Customer). They do this role with the assistance of the rest of the Scrum Team. The frequency of updating Earned Value should be at least weekly, but can even be more frequent. When each User Story is “Done” (complete), Earned Value for the Sprint and the Project as a whole has Changed. The Earned Value can then be recalculated.

Sprint Review: Planned Value in Scrum

Planned Value in a Traditional Project is straightforward. It is normally based on Effort required to do the Work. The total effort in all of the items in the WBS (Work Breakdown Structure) is detailed in the Project Plan. In Scrum Projects, Planned Value is based on the Value provided by the User Stories that are not finished. This Value is identified in the Sprint Planning Meeting. During this meeting each User Story is Assessed for Complexity, instead of hours of Effort. This is because the time to complete Work will vary depending upon the experience of the Scrum Team member. The Complexity however can be agreed by the Team in the Planning Meeting.

When all the User Stories have been Estimated, the Scrum Team can identify the Planned Value for each Sprint. The Planned Value graph is a straight line from zero to the accumulated Planned Value. Planned value starts at zero because at the Planning Meeting, none of the Work has been allocated.

Calculating Earned Value in the Sprint Review.

The calculation and upgrading of Earned Value is based on the results of each Daily Stand-Up Meeting. The Stand-Up Meeting is a report of expected and actual progress a day at a time. Whenever a User Story is declared “Done” (finished), the Earned Value for the Sprint and the Project Changes. The Product Owner decides whether a completed User Story has actually met all the Acceptance Criteria. They are the ones to determine if the User Story is “Done”. There is only one “Earning Rule” used in computing Earned Value in a Scrum; that is the 0/100 guideline. That is due to the fact that a User Story that has not met all the Acceptance Criteria is not “Done”. There is no such thing as partially completed in Scrum.

Where a User Story has been accepted as “Done”, the points allocated to it throughout the Sprint Planning Meeting can be added to the Earned Value to date and the earned value graph can be updated. Depending on the Project, this can take place immediately, or can be completed on a weekly basis. This chart can be shown next to the Sprint Burndown Chart, which it complements. While the final graph will be exhibited and discussed during the Sprint Review Meeting, there is nothing preventing the Product Owner from sending out the latest update to all the Stakeholders as any Changes are applied.

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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 how to improve Value delivered, rather than wait on the Sprint Review, when it is too late to correct the situation.

Calculating Earned Value in the Sprint Review

Where the Earned Value (EV) has been aligned with or has actually outperformed the Planned Value, the Product Owner has updated the EV chart regularly. The final update for the Sprint forms part of the proof of Value delivery, together with any prototyping or pilots available for Stakeholder Review. Preferably, the top of the Earned Value curve ought to converge with the Planned Value curve, which means that every item in the Sprint Backlog has been Done. This does not always happen for a number of factors:-.

• The Team selected too much Work for the Sprint, and some needs to be continued within the next Sprint.
• All the Work was completed, but was not “Done”, i.e. did not fulfill all the Acceptance Criteria, and needs to be taken forward to the next Sprint.
• The least critical Stories in the Backlog were not completed due to the fact that the Team lacked time, and it has been decided to drop these User Stories completely. They are not critical to providing a Working and viable Product at the end of the Project.