Earned Value Management is predicated on the creation of a Performance Management Baseline (PMB). The PMB can be thought of as a super estimate that defines what work is planned to be done by what date and at what cost. Many companies spend a tremendous amount of time creating these super estimates since contracts are written against them, customer expectations are set against them and a project can be judged to be a success or failure benchmarked against the PMB. (And in a world of constrained budgets, underperforming against the PMB can mean death for a project.)
There are many Agile criticisms of creating this level of estimating. For example, I was listening to an old interview with Mike Cohn on the Controlling Chaos podcast about Agile Estimating. Towards the beginning of the interview he talks about the fear developer’s have of giving estimates. He said an estimate is pretty much used to beat a developer over the head with (as an attempt at “management.”) He also brought up the point that people spend too much time estimating assuming that an estimate is a firm a commitment -which it unfortunately does often get turned into.
Given that EVM is a requirement for many organizations, how can a contract be written or stakeholder expectations and stakeholder sponsorship be developed in such a way that accounts for the inherent uncertainty in the estimating process? How can PMB’s be made more realistic, while still giving stakeholders the governance they require?