Earned Value Management (EVM) is a project management method that some people love and others don't. This is why Tempo Budgets for JIRA makes it really simple to choose which kind of project to create and to switch back and forth between using EVM and traditional project management techniques.
[callout class="user"]If you’re a Project Manager, a fan of EVM, and wish to track project financials seamlessly within JIRA, then this post is for you. [/callout]
Benefits of Earned Value Management
Earned Value Management (EVM) is a PMI approved concept. This post assumes you’re already familiar with EVM, but in a nutshell it’s the practice of tracking the work done at each stage of the project and calculating the Earned Value (EV) as well as planned and actual costs.
If you’re interested in learning more about some of the benefits of agile EVM, read about them in this other great post.
Setting up your Project
In order to create an EVM project, you simply create a folio using Earned Value Management.
Tempo Budgets provides a few different options of what to track in your folios. When creating a folio, the create folio window asks you what you would like to track. If you're using Earned Value Management, all you need to do is choose the Earned Value option, as seen below.
[callout class="tip"] Don't worry if you decide later on that you no longer want to track earned value (EV), you can easily turn this on and off in the folio configuration at any point. [/callout]
The next step to getting your EVM folio, or project, up and running is to define the scope. Scope is very important if you’re working with Earned Value Management. It’s essential to have clearly mapped out the work required for the project, so that the earned value is accurately calculated. It might be a tedious task to have to set this up in advance, but the little extra effort will save both time and money in the long run.
Luckily JIRA Software, JIRA Core, or JIRA Service Desk combined with Tempo Folio provides a great solution to plan the scope of your project as painlessly as possible.
[callout class="tip"]If, for instance, you already have a JIRA project set up, which encompasses all of the anticipated issues for the project and time estimations, then most of the planning is already done.[/callout]
Tempo Budgets will automatically create a folio around your chosen scope, which can be defined by any of the criteria seen below.
Once you’ve created your folio and defined a scope, the hard part is over. Now you just need to add your staff, planned costs, and planned revenue (if you’re tracking revenue).
Add your folio's staff
You can add staff members to your folio in many ways. It’s possible to add individual JIRA users, import the staff from a previous folio, or add a Tempo Team.
[callout class="tip"]We suggest that you set up Tempo Teams to have all of your team members centralized in one place to easily use across Tempo products. If you’re unsure how to do that, see here. [/callout]
To add a staff, go into the folio overview and click on the staff tab. After you've added your staff, you can view a summary of all staff members at any time.
Plan the costs of your folio
The next step is to plan some costs for your folio. Again, there are many ways to do this depending on what works best for you. The available options include:
- Plan costs and expenses individually
- Create a lump sum as the planned value, if you do not need the values to be detailed.
- Plan from estimates and allow Tempo Budgets plan required positions based on the estimated effort of work within the folio's scope.
- Plan from staff and let Tempo Budgets populate planned costs from the details of the staff members.
- Import from CSV
[callout class="tip"]If you’re interested in more information about the different ways to create a budget in Tempo Budgets, see here. [/callout]
If you've already created a Tempo Team and added that team, then the easiest option is to plan from staff. Once you click on that option, you are then again presented with even more options. These options include:
- Plan from staff based on staff members' availability
- Plan from staff based on staff members' planned effort
- Plan from staff based on staff members' assigned issues
If you’re using EVM and already have the issues within the scope clearly defined and assigned to your staff members, it might be a good idea to plan from staff based on staff members’ assigned issues. In this case, I have not yet assigned any issues to my team, so I’m going to plan based on staff member’s availability.
[callout class="user"]If you don't already have a team set up to work on this project and have planned out the scope of the project and estimated the work effort on the JIRA issues in detail, then the plan from estimates is the best option. [/callout]
Once I’ve chosen one of those options, my planned costs have been automatically populated. Any extra expenses or positions can be easily added manually afterwards by planning an expense.
As you can see in the above screenshot, it says DRAFT in the top right above the expenses. This means that your baseline has not yet been approved. If you’d like to approve it, just click approve. It’s also possible to create multiple baselines to compare and contrast different scenarios.
[callout class="user"]This feature is really useful if you’re the one creating a budget for a project, but your superior needs to approve it. In this case you can keep it in draft mode until they approve, or even create multiple baselines for them to review.[/callout]
If you’re using JIRA worklogs or Tempo Timesheets for painless time tracking and reporting, work logs will be automatically converted into actual costs. If not, the cost rates for the JIRA users or roles will be converted in real-time.
If you also have other expenses that are not human resources related, then you can easily copy them to actual or simply book expenses in the actual section as expenses come in.
If you wish to track revenue, you can plan it in much the same way that you plan costs, so I’m not going to go into detail here. One great option is to plan revenue based on your planned costs and simply add a mark-up, allowing Tempo Budgets to automatically populate the planned revenue section.
[callout class="tip"]As always, you can turn revenue tracking on and off at any stage of your project in the folio configuration. [/callout]
Tracking costs in real-time
Once you’ve set up your folio and added all of the data you have, you can start tracking the progress in real-time. If you’re tracking earned value, then the data shown in the overview will reflect that.
You can also easily generate an earned value report, which gives you the periodic earned, planned, and actual value for the expense types you have selected. Easily set the parameters for this report according to timeframe, frequency, account, label, or custom fields. It’s also possible to filter it further by category, role, or type of expense.
To do this, simply go into the report tab and click on “earned value report”. You will then be presented with a report that looks like this.
Easily export this information to Excel, or print it if needed.
Now you should know how to set up your folio to plan and track the costs of your project using Earned Value Management.
Happy budgeting adventures.