Performance Based Management Handbook

PERFORMANCE–BASED
PROJECT MANAGEMENT®
The Principles, Processes, and Practices used to increase the Probability of
Program Success (PoPS) to accompany the book of the same title from AMACOM
Books, 2014.
V2.0
Niwot Ridge, LLC
Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

2
Performance–Based Project Management®
is a registered trademark of Niwot Ridge, L.L.C.
Performance–Based Project Management ® ISBN 978–0–8144–3331–7
is a publication of American Management Association,
Copyright© 2014
CMMI® is a Registered Trademark of Carnegie Mellon University, Pittsburg, PA
All material in this document is Copyright © 2002 ― 2017
Glen B. Alleman, Niwot Ridge L.L.C.
This publication may not be reproduced, stored on a retrieval system, or
transmitted in whole or in part, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without prior written permission
from Niwot Ridge L.L.C.
Send requests for reuse to glen.alleman@niwotridge.com

Chapter Title Page
Chapter 0 Performance–Based Project Management® 5
Chapter I Principles and Processes of Performance–Based Project Management® 53
Chapter II The 10 Principles of Performance–Based Project Management® 63
Chapter III Deploying Performance–Based Project Management® 87
Chapter IV Process 1.0 – Identify Needed Systems Capabilities 95
Chapter V Process 2.0 – Establish the Requirements Baseline 105
Chapter VI Process 3.0 – Establish the Performance Measurement Baseline 115
Chapter VII Process 4.0 – Execute the Performance Measurement Baseline 125
Chapter VIII Process 5.0 – Continuous Risk Management 135
Chapter IX Graded Application of Performance–Based Project Management® 163
Chapter X Tools and Artifacts used in Performance–Based Project Management® 179
Appendix A References for each Chapter 225
Table of Contents
3

Performance–Based Project
Management® integrates
Principles, Processes, and
Practices, to provide actionable
information to the decision
makers to increase the
Probability of Program Success.
This information provides
performance to plan, risk
reduction, measures of
Effectiveness and Performance
of the delivered products and
services, estimates to complete,
and estimates at completion.
0Performance–Based Project Management®
in a Nutshell
Chapter
Chapter 05 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

FiveImmutablePrinciples
ofProjectSuccess
1. What does Done Look Like? Ten Practices Implementing the Five Processes, supporting the Five Immutable Principles
2. What’s the Plan to Reach Done?
1.CapabilitiesDrive
Requirements
2.RequirementsIdentify
Deliverables
3.WorkPackages
produceDeliverables
4.MasterSchedule
SequencesDeliverables
5.ProgressMeasuredas
PhysicalPercent
Complete
6.WorkAuthorization
AssuresProper
Sequencing
7.EarnedValueIdentifies
performance
8.Compliancewith
TechnicalPerformance
MeasuresAdjustEV
9.PerformanceFeedback
adjustswork
sequencing
10.Futureperformance
basedonTCPI
3. What resources are needed to reach Done?
4. What risks are encountered on the way to Done?
5. What are the units of measure of progress to plan?
Five Processes Supporting the 5 Principles
1.Identify
Needed
Capabilities
Define Capabilities as operational Concepts
Define Operational Concepts as Scenarios or Use Cases
Simultaneously assess – needs, costs and risks of capabilities
Define explicit, balanced, and feasible alternatives
2.Establish
Technical,
Schedule,
and Cost
Requirements
Perform Fact Finding for technical, cost, schedule baseline
Gather and classify requirements
Evaluate and Rationalize Requirements
Prioritize requirements using risk adjusted measures
Integrate and validate Requirements
3.Establish
Performance
Measurement
Baseline to
produce
products to
meet the
project
requirements
Decompose Work Packages and Planning Packages
Assign Accountability for the deliverables
Arrange Work packages in logical order
Assign Work Package Measures of Performance
Develop BCWS for Work Packages
Set the Performance Measurement Baseline
4.Execute
Performance
Measurement
Baseline
Perform the authorized work in the planned order
Accumulate and Report Work Package performance
Take Corrective actions to stay on plan
Maintain the Performance Measurement Baseline
5.Perform
Continuous
Risk
Management
Identify technical and programmatic risks
Analyze risks
Plan and execute the risk handling strategies
Track risk handling activities
Control or accept risks
Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017 Chapter 06

Chapter 0
Management®
In A Nutshell
5 Principles, 5 Processes, and 5 Practices to
Increase The Probability of Project Success
Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 20177 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

Why Performance–Based Project Management®?
§ Successful projects deliver
capabilities:
§ Not work efforts,
§ Not cost expenditures,
§ Not documentation, test
results, or the processes.
§ These are all needed, but
they’re not Deliverables.
§ For success, projects must
deliver tangible
beneficial outcomes,
assessed in units of
measure meaningful to the
decision makers.
Principles, Processes, and Practices for
Increasing the Probability of Project
Success†
† Program Success Probability, John Higbee, Defense Acquisition
University, 9 May 2005
Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017 8/26

1. What Does DONE Look
Like?
2. How Do We Get to DONE?
3. Is There Enough Time,
Money, and Resources, To
Get to DONE?
4. What Impediments Will Be
Encountered Along The
Way to DONE?
5. What Units of Measure are
used to confirm Progress
To Plan Toward Done?
All Successful Projects Require Credible
Answers To These 5 Questions …

5 Critical Practice Groups Needed to Implement
the 5 Principles of Project Success
¨ Define the Work Breakdown
Structure(WBS).
¨ Identify the Organizational
Breakdown Structure (OBS).
¨ Integrate the WBS and OBS.
¨Organization
¨ Schedule the work.
¨ Identify the Products and
Milestones.
¨ Set the Time Phased Budget.
Planning and Budgeting
¨ Record Direct Costs.
Accounting
¨ Determine Variances.
¨ Sum Data and Variances.
¨ Manage Action Plans.
Performance Analysis
¨ Incorporate Changes to all
plan budgets and technical
deliverables.
Revision Management
Chapter0
10

Credible Data Is Need to Increase
The Probability Of Program Success
¨ Concept of
Operations (ConOps)
¨ Operational
Scenarios and Use
Cases
¨ Integrated Master
Plan (IMP)
¨ Value Stream Maps
(VSM)
¨ Key Performance
Parameters (KPP)
¨ Measures of
Effectiveness (MoE)
¨ Program Planning and
Controls (PP&C)
¨ Integrated Master
Schedule (IMS)
¨ Work Packages (WP)
and Planning
Packages (PP)
¨ Earned Value
Management (EVM)
¨ Technical and
Programmatic Risk
Management (RM)
¨ Measures of
Performance (MoP)
¨ Estimate At
Completion (EAC)
¨ Estimate To Complete
(ETC)
¨ To Complete
Performance Index
(TCPI)
¨ Independent Estimate
At Completion (IEAC)
¨ Technical Performance
Measures (TPM)
Chapter0
11

Systems Management Guides the Conversion of
this Data into Actionable Outcomes
¨ Systems Management is the set of organizational
structures and processes to rapidly deliver dependable
technological outcomes within a predictable time and
budget.
¨ Complexity in large scale systems is not driven by the
scale, but rather by the heterogeneity of the
components and their individual underlying complexity.
¨ Managing the complex individual components, their
interactions, their cost, schedule, and technical
performance elements is the role of Systems
Management.
¨ Performance–Based Project Management® connects cost,
schedule, and schedule performance data to provide
actionable information to the decision makers.
Chapter0
12

16 Program Management Activities
Program Enablers
Program Process Capabilities
Business Enablers
Chapter0
13

Origins of
¨ This is planning
in the large.
¨ This is planning
in the presence
of change.
¨ The focus is on
transformational
outcomes.
¨ Capabilities start with a mission
level analysis.
www.rand.org
Chapter0
14

4+1 questions every project must answer
Performance–Based Project Management® integrates five
critical program management process areas with – Cost,
Schedule, and Technical Performance Measures.
The inclusion of Technical Performance Measures (TPM)
separates this approach from conventional methods based
solely on managing cost and schedule.
In conventional approaches, the cost and schedule baseline
and their variances generate the data for Earned Value
variables that are used to make programmatic decisions.
In Performance–Based Project Management®, Earned Value
measures are integrated with measures of Physical Percent
Complete (PPC) derived from Technical Performance
Measures (TPM) at planned assessment points in the
Integrated Master Schedule (IMS).
The Events and Milestones defined in the Integrated Master
Plan (IMP) describe the planned technical or operational
maturity of the products or services measured against their
actual technical performance.
The Earned Value measurements are used with Technical
Performance measures for each deliverable to produce a
credible measure of progress and a credible forecast of
future performance using the To Complete Performance
Index (TCPI). The result is increased visibility and credibility
of the Independent Estimate at Completion (IEAC).
As the program progresses, technical and programmatic risks
are identified, their mitigation or retirement planned and
executed, and adjustments to the program made to assure
planned progress is maintained.
Successfully executing the program requires a Program
Planning and Controls discipline that identifies what “Done”
looks like, measures progress toward “Done,” identifies the
risks and impediments to reaching “Done,” and assures timely
corrective action to maintain progress toward “Done.”
“Done” is always defined in units of measure meaningful to
the decision maker. The best tangible evidence are the
Deliverables needed to meet the requirements that fulfill the
system’s requested Capabilities recognized as success for the
program.
Using this approach, Deliverables fulfill the requirements that
meet the system or business performance criteria, produced
at the planned time, using the planned budget. This
performance is measured as Physical Percent Complete and
is the only Credible measurement of progress.
With the planned requirements fulfilled, the system or
operational capabilities become available to the customer at
the planned time.
Chapter0
15

The 4+1 Questions
Every Successful Project
Answers
Capabilities Requirements Plans Execution
2. What technical and operational requirements are needed to
deliver these capabilities?
1. What capabilities are needed to fulfill the Concept of Operations†, the
Mission and Vision, or the Business System Requirements?
3. What schedule delivers the product or services on
time to meet the requirements?
4. What periodic measures of
physical percent complete assure
progress to plan?
What impediments to success, their mitigations, retirement plans, or “buy
downs are in place to increase the probability of success?”
+ Continuous Risk Management
† A Concept of Operations (ConOps) describes the characteristics of a system from the point of view of an individual who will use that system. It is
used to communicate the quantitative and qualitative system characteristics to all stakeholders.
Œ

Ž

Chapter 0Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 201716 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

Addresses …
Project Management Case Study, Pierre Bonnal, CNAM IIM MBA Program, June 2004
Chapter0
17

Identify Needed
Capabilities
Establish a
Performance
Measurement
Baseline
Execute the
Performance
Measurement
Baseline
Capabilities
Based Plan
Operational
Needs
Earned Value
Performance
0% /100%
Technical
Performance
Measures
System Value
Stream
Technical
Requirements
Identify
Requirements
Baseline Technical
Performance
Measures
PMB
Changes to
Needed Capabilities
Changes to
Requirements Baseline
Changes to
Performance Baseline
Œ

Ž


Increasing the Maturity of Project Processes
and Deliverables with Meaningful Measures
1. Identify Needed Capabilities to achieve program
objectives or the particular end state. Define these
capabilities through scenarios from the customer point of
view in units of Measure of Effectiveness (MoE)
meaningful to the customer.
2. Define the Technical And Operational Requirements that
must be fulfilled for the system capabilities to be
available to the customer at the planned time for the
planned cost. Define these requirements in terms that are
isolated from any implementation technical products or
processes. Only then bind the requirements with
technology.
3. Establish the Performance Measurement Baseline
describing the work to be performed, the budgeted cost
for this work, the organizational elements that produce
the deliverables from this work, and the Measures of
Performance (MoP) showing this work is proceeding
according to cost, schedule, and technical performance.
4. Execute the PMB’s Work Packages in the planned order,
assuring all performance assessments are 0%/100%
complete before proceeding. No rework, no transfer of
activities to the future. Assure every requirement is
traceable to work and all work is traceable to
requirements.
5. Perform Continuous Risk Management for each
Performance–Based Project Management® process area
to Identify, Analyze, Plan, Track, Control, and
Communicate programmatic and technical risk.
The integration of these five process areas is the foundation
of Performance–Based Project Management®.
Each process area stands alone and at the same time is
coupled with the other process areas. Each process area
contains specific steps for producing beneficial outcomes to
the project, while establishing the basis for overall project
success.
Each process can be developed to the level needed for
specific projects. All five process areas are critical to the
success of any project.
If a process area is missing or poorly applied, the capability
to manage the project will be jeopardized, possibly in ways
not know until the project is too far along to be recovered.
Each process provides information needed to make decisions
about the majority flow of the project. This actionable
information is the feedback mechanism needed to keep a
project under control. These control processes are not
impediments to progress, but are the tools needed to
increase the probability of success.
Chapter0
19

Increasing the Maturity of Project Work
Processes and Deliverables
Chapter0
20
Identify
Capabilities
Needed for
Success
Identify
Requirements
to Deliver
Capabilities
Establish
Performance
Measurement
Baseline
Execute
Performance
Measurement
Baseline
§ Define Capabilities
§ Define Concept of
Operations
§ Assess Needs, Cost, and
Risk Impacts
§ Define Balanced and
Feasible Alternatives
§ Fact Finding
§ Gather And Classify
§ Evaluate And Rationalize
§ Prioritize Requirements
§ Integrate And Validate
§ Decompose Scope
§ Assign Accountability
§ Arrange Work
§ Develop Budget
§ Assign Performance
§ Perform Work
§ Accumulate Performance
Measures
§ Analyze Performance
§ Take Corrective Action
Perform Continuous Risk Management (CRM)
Define the Measurable
Capabilities of each Project
Outcome
Assure All Requirements
Provided In Support of
Capabilities
Define Measures of
Performance and
Effectiveness
Ensure Cost, Schedule, and
Technical Performance
Compliance

What is a Deliverable?
Project Management Case Study, Pierre Bonnal, CNAM IIM MBA Program, June 2004.
Chapter0
21

Define the set of capabilities needed to achieve the project objectives or the particular end state
for a specific scenario. Using the Concept of Operations (ConOps), define the details of who,
where, and how this capability is to be accomplished, employed, and executed.
Œ
Define the technical and operational requirements for the system capabilities to be fulfilled. First,
define these requirements in terms isolated from any implementation details. Only then bind the
requirements with technology.

Build a time–phased network of work activities describing the work to be performed, the
budgeted cost for this work, the organizational elements that produce the deliverables, and the
performance measures showing this work is proceeding according to plan.
Ž
Execute work activities, while assuring all performance assessment represent 100% completion
before proceeding. This means – No rework, no forward transfer of activities to the future. Assure
all requirements are traceable to work & all work is traceable to requirements.

Apply the processes of Continuous Risk Management for each Performance–Based Project
Management® process area to: Identify, Analyze, Plan, Track, Control, and Communicate
programmatic and technical risk.


§Partition system capabilities into classes of service within operational scenarios.
§Connect the capabilities to system requirements using some visual modeling notation.
§Define Measures of Effectiveness (MoE) and Measures of Performance (MoP).
§Define the delivery schedule for each measure of performance and effectiveness.
§Define scenarios for each system capability.
§Connect these scenarios to a Value Stream Map of the increasing maturity of the program.
§Assess value flow through the map for each needed capability.
§Identify capability mismatches and make corrections to improve overall value flow.
§Assign costs to each system element using a value flow model.
§Assure risk, probabilistic cost and benefit performance attributes are defined.
§Use cost, schedule and technical performance probabilistic models to forecast potential
risks to program performance.
§Make tradeoffs that connect cost, schedule, and technical performance in a single location
that compares the tradeoffs and their impacts.
§Use Measures of Effectiveness (MoE) and Measures of Performance (MoP) for these
alternative tradeoffs.
Define the capabilities needed to achieve a desired objective or a particular end state for a
specific scenario. Define the details of who, where, and how these capabilities are to be
accomplished, employed, and executed.
1.1
1.2
1.3
1.4
Œ

What Does A Capability “Sound” Like?
Chapter0
24

Identifying Needed System Capabilities
Identifying System Capabilities is the starting point for any
successful program. Systems Capabilities are not direct
requirements, but statements of what the system should
provide in terms of “abilities.” For example there are four
capabilities needed for the Hubble Robotic Service Mission:
1. Do no harm to the telescope.
2. Change the Wide Field Camera.
3. Connect the external battery umbilical cable.
4. Attached the de-orbit module for later use
How is this to be done and what are the technical,
operational, safety and mission assurance requirements?
Don’t really know yet, but the Capabilities guide their
development.
The critical reason for starting with capabilities is to establish
a home for all the requirements. To answer the question “why
is this requirement present?” “Why is this requirement
needed?” “What business or mission value does fulfilling this
requirement provide?”
Capability statements can then be used to define the units of
measure for program progress. Measuring progress with
physical percent complete at each level is mandatory. But
measuring how the Capabilities are being fulfilled is most
meaningful to the customer.
The “meaningful to the customer” unit of measures are critical
to the success of any program. Without these measures the
program may be cost, schedule, and technically successful
but fail to fulfill the mission.
The process flow to the right is the starting point for
Identifying the Needed Capabilities and determining their
priorities.
Starting with the Capabilities prevents the “Bottom Up”
requirements gathering process from producing a “list” of
requirements – all needed – that is missing a well formed
topology. This Requirements Architecture is no different than
the Technical or Programmatic architecture of the system.
Capabilities Based Planning (CBP) focuses on “outputs”
rather than “inputs.” These “outputs” are the mission
capabilities that are fulfilled by the program.
Without the capabilities, it is never clear the mission will be a
success, because there is no clear and concise description of
what success means. Success means providing the needed
capabilities, on or near schedule and cost.
The concept of CBP recognizes the interdependence of
systems, strategy, organization, and support in delivering the
capability, and the need to examine options and trade‒offs
in terms of performance, cost and risk to identify optimum
development investments.
CBP relies on Use Cases and scenarios to provide the context
to measure the level of capability.
Chapter0
25

What Should We Do?
Where Are We Now?
Abstracted from:
“Capabilities‒Based Planning – How It Is Intended
To Work And Challenges To Its Successful
Implementation,” Col. Stephen K. Walker, United
States Army, U. S. Army War College, March
2005
Chapter0
26

§Produce an overall statement of the problem in the operational context.
§Develop the overall operational and technical objectives of the target system.
§Defined the boundaries and interfaces of the target system.
§Gather required system capabilities, functional, nonfunctional and environmental
requirements, and design constraints.
§Build the Top Down capabilities and functional decomposition of the requirements in a
Requirements Management System.
§Answer the question “why do I need this?” in terms of operational capabilities.
§Build a cost / benefit model using probabilistic assessment of all variables, their
dependencies, and impacts.
§For all requirements, perform a risk assessment to cost and schedule.
§Determine criticality for the functions of the system.
§Determine trade off relationships for all requirements to be used when option
decisions must be made.
§For all technical items, prioritize their cost and dependency.
§Address the completeness of requirements by removing all “TBD” items.
§Validate that the requirements are traceable to system capabilities, goals, and mission.
§Resolve any requirements inconsistencies and conflicts.
Define the technical and operational requirements that must be met for the system capabilities to be
delivered. Define these requirements in terms isolated from any technology or implementation. Assure
each requirement is connected to a need system capability.
2.1
2.2
2.3
2.4
2.5


What Is a Requirement?
Chapter0
28

Identifying Requirements
Requirements are defined attributes for an item prior to the
efforts to develop a design for that item. System requirements
analysis is a structured, or organized, methodology for
identifying an appropriate set of resources to satisfy a system
need (the needed capabilities) and the requirements for those
resources that provide a sound basis for the design or selection
of those resources.
Requirements act as the transformation between the
customer’s capabilities needs and the design concept
implemented by the organization’s engineering resources.
The requirements process decomposes a statement of the
customer need through a systematic exposition of what that
system must do to satisfy that need. This need is the ultimate
system requirement which all other requirements and designs
flow.
There are two fundamental classes of requirements.
§ Process Performance Requirements
§ Product Performance Requirements
Process Performance Requirements define how the work
processes are used to produce a beneficial outcome to the
customer.
Product Performance Requirements define the product
specifications and how they are related to the process
requirements.
As well as the product and process requirements, there are
functional and non‒functional requirements.
These non‒functional requirements play a significant role in
the development of the system. Non‒functional requirements
are spread across the entire system or within individual
services and cannot be allocated to one specific software
artifact (e.g., class, package, component).
This makes them more difficult to handle than functional
requirements. The specifics of the system’s architecture, such
as highly distributed services bring up additional difficulties.
The distinction between process and product requirements
lays the foundation for the Work Breakdown Structure
(WBS). The WBS, the Related Integrated Master Plan (IMP)
and Integrated Master Schedule (IMS), also focus on this
separation.
The success of the project or program depends on defining
both the product and the processes that support or
implement the product.
When properly connected, the Requirements Taxonomy, the
Work Breakdown Structure, the IMP, and the IMS “foot and
tied” to the Performance Measurement Baseline (PMB) to
provide the traceability of the increasing maturity of the
deliverables (vertical) and the physical percent complete of
the work efforts (horizontal).
Chapter0
29

Identifying Requirements†
† Systems Requirements Practices, Jeffery O. Grady, McGraw Hill, 1993
Chapter0
30

Build a time–phased network of activities describing the work to be performed, the budgeted cost for
this work, the organizational elements that produce the deliverables from this work, and the
performance measures showing this work is proceeding according to plan.
Decompose the program Scope into a product based Work Breakdown Structure (WBS), then further
into Work Packages describing the production of the deliverables traceable to the requirements, and to
the needed capabilities.
3.1
Assign responsibility to Work Packages (the groupings of deliverables) to a named owner
accountable for the management of the resource allocations, cost and schedule baseline, and
technical delivery.
3.2
Arrange the Work Packages in a logical network with defined deliverables, milestones, internal
and external dependencies, with credible schedule, cost, and technical performance margins.
3.3
Develop the Time–Phased Budgeted Cost for Work Scheduled (BCWS) for the labor and material
costs in each Work Package and the Project as a whole. Assure proper resource allocations can be
met and budget profiles match expectations of the program sponsor
3.4
Assign objective Measures of Performance (MoP) and Measures of Effectiveness (MoE) for each Work
Package and summarize these for the Project as a whole.
3.5
Establish a Performance Measurement Baseline (PMB) used to forecast the Work Package and
Project ongoing and completion cost and schedule performance metrics.
3.6
Ž

What Does a Credible Plan and
Schedule Look Like?
Chapter0
32

Establishing the Three Elements of the
Performance Measurement Baseline
The Performance Measurement Baseline (PMB) is the primary
assessment document for assuring the credibility of a
program plan. The PMB is the baseline of the cost, schedule
and deliverables for each Work Package in the plan.
Constructing the PMB requires knowledge of the business
requirements, skill in developing the Work Packages that
produce the deliverables for these requirements, and
discipline in assembling the cost, schedule and relationships
between the Work Packages. It is the discipline that requires
the most focus for the planners and program controls staff.
Without this discipline, the development of a credible
baseline is simply not possible.
In the end the planners and program controls staff must
“know” in intimate detail each Work Package, its
deliverables and resource requirements, the performance
measurement criteria, and the dependencies that form the
critical path through the program schedule.
The concept of Performance–Based Project Management® is.
§ Deliverables are the units of measure of progress to plan.
§ Deliverables are what the customer has paid money for.
§ Deliverables contain the business capabilities, the
associated value that fulfill the requirements of the
business plan.
There are three elements to the Performance Measurement
Baseline:
The Technical Performance Baseline is the requirements flow
down and traceability map for each deliverables in the
program.
§ A critical performance measure of the Technical
Performance Baseline is the stability of requirements. The
expected technical achievement for the actual progress is
compared using periodic measurements or tests starts with
the Technical Performance Baseline.
§ An important aspect of the Technical Performance Baseline
is to define the units of measures for each deliverable that
defines what “done” looks like at each incremental
assessment of maturity.
The Schedule Performance Baseline is the sequence of Work
Packages and Planning Packages that produce the products
or services from the program. This baseline contains the
schedule margin derived from the Monte Carlo simulation
described in DID 81650.
The Cost Performance Baseline is the “authorized
time‒phased budget‒at‒completion (BAC) used to measure,
monitor, and control overall cost performance on the
program.” This budget (BCWS) is held in the Control
Accounts, the Work Packages and Planning Packages owned
by the Control Account Manager.
Chapter0
33

Establishing the Three Elements of the
Performance Measurement Baseline
Cost Baseline
Schedule Baseline
Technical Baseline
Determine
Scope and
Approach
Develop
Technical
Logic
Develop
Technical
Baseline
Develop
WBS
Define
Activities
Estimate
Time
Durations
Sequence
Activities
Finalize
Schedule
Identify
Apportioned
Milestones
Determine
Resource
Requirement
Prepare
Cost
Estimate
Resource
Load
Schedule
Finalize
Apportioned
Milestones
Determine
Funding
Constraints
Approve
PMB
Chapter0
Perform
Functional
Analysis
34

Execute the planned work, assuring all work is 100% complete before proceeding to the next
planned work package. No rework, no forward transfer of activities or features. Assure every
requirement is traceable to work and all work is traceable to requirements.
§ Using the Work Package sequencing, release work to be performed as planned.
§ With the responsibility assignments, identify the accountable delivery manager to guide the
development of the products or services for each Work Package.
4.1
§ Using Physical Percent Complete or Apportioned Milestones, capture measures of progress to plan
for each Work Package.
§ Report this Physical Percent Complete in a centralized database for each Work Package and the
program as a whole.
4.2
§ Compare the Physical Percent Complete against the Planned Percent Complete for each period of
performance.
§ Construct cost and schedule performance indices from this information and the Physical Percent
complete measures.
4.3
§ With Cost and Schedule performance indices, construct a forecast of future performance of cost,
schedule, and technical performance compliance.
§ Take management actions for any Work Packages not performing as planned.
4.4
§ Record past performance based on Work Package completion criteria.
§ Record past future forecast performance estimates in a historical database.
§ Forecast next future performance estimate against the Performance Measurement Baseline.
§ Report this next future performance estimate to the program stakeholders.
4.5


How Do We Know We Are Making
Progress to Plan?
Chapter0
36

Executing the Performance Measurement
Baseline (PMB)
With the Performance Measurement Baseline established, its
execution is now the next critical activity.
The execution process is called the “program rhythm.” this
means the processes are performed in a repeated manner –
at least on a monthly basis and many times on a weekly
basis.
This business rhythm must create actionable information for
the program manager on a time scale that actually allows
actions to be taken.
For Government programs this time scale is at a minimum
once a month – the Contract Performance Report – in the
form of DI‒MGMT‒81466A.
A larger question must be answered though. How long is the
Program Manager willing to wait before she discovers she is
late? Waiting one month seems risky.
Many programs have weekly status reviews which answer the
question “where are we in terms of progress to plan?”
In the Performance–Based Project Management® method, the
measure of this “progress to plan” is provided by the
tangible physical deliverables from the work efforts.
These tangible, physical deliverables must be defined in the
work packaged created during the Planning process of
Performance–Based Project Management®.
The measures of physical percent complete can be applied
on weekly boundaries in a variety if ways:
1. To actually have weekly deliverables.
2. Have apportioned milestones for each week.
3. Have tasks that are one week long and record
0%/100% complete at the end of each week.
In all cases, a measure of physical percent complete is
mandatory if the program manager is to receive actionable
information.
The important process here is to have an agreed on measure
of performance that is defined before the work starts.
Keep these measures and the work efforts that produce to
“fine grained” durations.
Focus on answering the question How long are we willing to
wait before we find out we’re late?
The answer to this question must be short enough to take
corrective action so you are in fact not late.
Chapter0
37

Executing the Performance Measurement
Baseline (PMB)
Chapter0
38

§ Identify and classify risks in a Risk Register. Separate reducible and Irreducible risks
§ Manage this Risk Register through a Risk Management Board.
§ Connect these risks and their handling and margins in the Master Schedule.
§ Convert risk data into risk decision‒making information.
§ Use this analysis information as the decision basis for the program manager to work on the “right”
risks.
§ Turn risk information into decision making information and actions (both present and future).
§ Develop actions to address individual risks, prioritize risk actions, and create an integrated risk
management plan to retire the risk or handle it when it turned into an issue.
§ Monitor the status of risks and actions taken to ameliorate risks.
§ Identify and monitor risks to enable the evaluation of the status of risks themselves and of risk
mitigation plans.
§ Risk communication lies at the center of the model to emphasize both its pervasiveness and its
criticality.
§ Without effective communication, no risk management approach can be viable.
Continuous Risk Management starts with the underlying principles, concepts, and functions of risk
management and provides guidance on how to implement risk management as a continuous
practice in programs and the organizations that management programs.
5.1
5.2
5.3
5.4
5.5


Analyze
Plan
Track
Control
Identify Risks, Issues, and
Concerns
Evaluate, classify, and prioritize
risks
Decide what should be done
about each risk
Monitor risk metrics and
verify/validate mitigations
Make risk decisions
Subproject and partner
data/constraints, hazard
analysis, FMEA, FTA, etc.
Risk data: test data, expert
opinion, hazard analysis,
FMEA, FTA, lessons learned,
technical analysis
Resources
Replan Mitigation
Program/project
data
(metrics information)
Statement of Risk
Risk classification, Likelihood
Consequence, Timeframe
Risk prioritization
Research, Watch (tracking
requirements)
Acceptance Rationale, Mitigation
Plans
Risk status reports on:
Risks
Risk Mitigation Plans
Close or Accept Risks
Invoke contingency plans
Continue to track
Perform Continuous Risk Management
Chapter0
40

Integrating all the Parts Into a Whole
For increase the probability of project success, we need all
the parts of the project’s architecture to being place.
This starts with the Statement of Work, the Concept of
Operations, Statement of Objectives and a similar narrative
document and the supporting graphics showing what the
system will do, who is involved, and the artifacts and
outcomes of the results from the project.
With these in hand, we can build the Work Breakdown
Structure for the deliverables. The WBS is product centric,
along with the services that produce the products. The WBS
does not describe the organizations producing the products.
That is done in the Organizational Breakdown Structure
(OBS). At the terminal nodes of he WBS are the Work
Packages that produce the deliverables.
From the WBS, the technical and operational requirements
can be derived. These define the behaviors of the
deliverables through Key Performance Parameters. The
customer’s KPPs come first, followed by the project’s KPPs in
the CWBS.
The Integrated Master Plan (IMP) describes the Program
Events, Significant Accomplishments, and Accomplishment
Criteria needed to increase the maturity of each deliverable
through the project’s lifecycle. The IMP is the single most
important document for properly executing the project.
Without the IMP, we cannot tell what Done looks like.
From the IMP, the Integrated Master Schedule (IMS) is
developed. The IMS sequences the Work Packages that
perform the work to produce the deliverables. This sequence
defines the critical path, the resources needed to perform the
work, the order of the work, and the dependencies between
the work efforts.
Using the IMS, the Earned Value Management techniques for
each Work Package is defined. Measures of Physical Percent
Complete are the best choice.
For each Work Package, Technical Performance Measures
(TPM) are used to assure the resulting outcomes meet the
requirements of the SOW, SOO, and ConOps.
With all these components, the Performance Measurement
Baseline can be established, showing the time phased
budget, work effort, deliverables, and assessment of
increasing maturity of the outcomes.
This PMB is then risk adjusted for reducible and irreducible
risks. With risk retirement work activities for the reducible
risks funded on baseline and schedule margin in front of key
deliverables to protect them from the irreducible risks.
After each status period, the risks are reassessed, margin
burn down recalculated, risk reduction reassessed from the
baseline work and a new risk adjusted Estimate to Complete
developed and changes made to “Keep the Program
Green.”
Chapter0
41

Integrating all the Parts into a Whole
Chapter0
Risk Management
SOW
SOO
ConOps
WBS
Technical and Operational
Requirements
CWBS &
CWBS Dictionary
Integrated Master Plan
(IMP)
Integrated Master Schedule
(IMS)
Earned Value Management
System (EVMS)
Objective Status and Essential Views to support the proactive management
processes needed to keep the program GREEN
Performance Measurement Baseline (PMB)
Measures of
Effectiveness (MOE)
Measures of
Performance (MOP)
Measures of Cost –
Schedule Progress
JROC
Key Performance Parameters
(KPP)
Program Specific
Key Performance Parameters
(KPP)
Technical Performance
Measures (TPM)
CWBS
42

From Mission Capabilities to Done
Measures of Effectiveness (MOE) – are the operational
measures of success that are closely related to the
achievements of the mission or operational objectives
evaluated in the operational environment, under a specific
set of conditions.
These measures are stated in units ,meaningful to the buyer.
They focus on the capabilities independent of any technical
implementation.
Measures of Performance (MOP) – characterize physical or
functional attributes relating to the system operation,
measured or estimated under specific conditions.
These measures are attributes that assure the system has the
capability and capacity to perform. They are an assessment
of the system to assure it meets the design requirements to
satisfy the Measures of Effectiveness.
Key Performance Parameters (KPP) – Represent the
capabilities and characteristics so significant that failure to
meet them can be cause for reevaluation, reassessing, or
termination of the program. KPPs have a threshold or
objective value that characterize the major drivers of
performance that are considered Critical to Customer (CTC).
Technical Performance Measures (TPM) – are attributes
that determine how well a system or system element is
satisfying or expected to satisfy a technical requirement or
goal.
TPMs assess design progress, define compliance to
performance requirements, identify technical risk, are limited
to critical thresholds, and include projected performance
goals.
Connecting the Mission Need – capabilities produced by the
project – with the MoEs, MoPs, KPPs, and TPMs must be done
for the project to have a chance of success.
Along with these attributes are …ilities, many times are
called non-functional requirements
§ Usability
§ Maintainability
§ Scalability
§ Availability
§ Extensibility
§ Security
§ Portability
Chapter0
43

From Mission Capabilities to Done
Chapter0
“Coming to Grips with Measures of
Effectiveness,” N. Sproles, Systems
Engineering, Volume 3, Number 1, pp. 50–58
MoE
KPP
MoP TPMMission Need
Acquirer Defines the Needs and Capabilities
in terms of Operational Scenarios
Supplier Defines Physical Solutions that
meet the needs of the Stakeholders
Operational
measures of success
related to the
achievement of the
mission or
operational
objective being
evaluated.
Measures that
characterize
physical or
functional attributes
relating to the
system operation.
Measures used to
assess design
progress,
compliance to
performance
requirements, and
technical risks.
44

4+1Critical Success Processes
Capabilities,
Requirements &
Deliverables
Program
Architecture &
Dependencies
Work
Planning and
Sequencing
Performance
Measurement
Baseline
Programmatic
& Technical Risk
Management
§Balanced
Scorecard
§Concept of
Operations
§Statement of
Objectives
§Integrated Master
Plan (IMP)
§Gaps
§Overlaps
§Interfaces
§Integrated Master
Schedule (IMS)
§Schedule margin
to protect critical
deliverables
§Cost And Schedule
Baseline
§WBS
§RAM
§Resource Loaded
IMS
§Risk Registry
§Risk Handling
Plans
§Contingency And
Management
Reserve
§Requirements
Traceability
§Value Stream
Mapping (VSM)
§Work Packages
§Planning Packages
§Technical
Performance
Measures (TPM)
§Risk Integrated
With IMS
§Risk Trending
§Measures Of
Effectiveness (MoE)
§Design Structure
Matrix (DSM)
§Earned Value
Management
§Measures Of
Performance
(MoP)
§Monte Carlo
Simulation
Chapter0
47

Program Support Services
Business
Process
Reengineering
Balanced
Scorecard
Organizational
Change
Management
DCMA
Compliance
DCAA
Compliance
§ Michael Hammer
trained
reengineering
processes
§ Program
governance
scorecard
§ Integrated Project
Team
development
§ Earned Value
Management
System
Deployment
§ Cost Accounting
Standard (CAS)
system
deployment
§ Project
Management
process
improvement
§ Program
performance
dashboards
§ Performance
management
training
§ EVM System
Description
development and
application
§ Integration of the
EV Engine with a
CAS compliant
accounting system
§ Value stream
mapping
§ Strategic
management
connected with
execution
§ Measurable
Process
improvement
§ EVMS Validation
preparation
§ DCAA and DCMA
compliance of
EVMS
Chapter0
48

Tangible Benefits of
Performance–Based PM Capabilities Benefits to the Customer
Program, Planning, and Controls
Rapid creation of the risk adjusted Performance
Measurement Baseline.
Earned Value Management ANSI‒748C compliant processes, tools, and training.
Programmatic and Technical Risk
Management
Credible integrated risk management process
guided by DoD, DOE, AACE, and PMI standards.
Management Process Improvement Value focused organizational change management.
Program Performance Assessment Unbiased External Independent Reviews (EIR).
Proposal support – Management Volume IMP/IMS, Basis of Estimate (BoE), and Risk sections.
Chapter0
49

Performance–Based Project Management® Puts
You On the Road to Success …
Where are we going?
How do we get there?
Are there enough resources?
What are impediments to progress?
How do we measure progress?

Practices of Performance–
Based Project Management®
guide the application of the 5
Principles and the 5 Process
Areas in this handbook.
These practices define the
reasons for each process,
connect each practice to a
beneficial outcome, and
integrate the processes into a
seamless delivery system. IConnecting Principles and
Processes With Practices
Chapter
Chapter I53 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

10 Practices of Performance–Based Project
Management®
Principles are the source of guidance for the Performance–
Based Project Management® Practices.
A principle is a “general truth, a law on which other are
founded or from which others are derived.” [Webster]
For the principles of program and project management to be
effective they must :
§ Express a basic concept
§ Be universally applicable
§ Be capable of straightforward expression
§ Be self evident
The 10 Practices of Performance–Based Project
Management® guide the application of the process areas.
These practices encompass the entire life cycle of a project
or program, from inception and the discovery of the business
or system capabilities, through requirements elicitation, to the
creation of the Performance Measurement Baseline (PMB), to
the execution of this baseline.
The practices of Performance–Based Project Management®
provide several feedback loops to assure that subsequent
activities provide measurable information to correct gaps
that exist in the previous activities. This iterative and
incremental approach to program management assures the
periods of assessment for corrective actions are
appropriately spaced to minimize risk while maximizing the
delivered value to the program.
Performance–Based Project Management® can be the basis
of conventional as well as Lean and Agile program
management methods.
The illustration the next page are the 10 Practices of
Performance–Based Project Management®. Each Practice is
developed in detail later in this handbook. For now
understanding the dependencies between the principles is
important.
Information produced by the Practices derived from the
Processes must be done in a sequential manner. This is not a
“waterfall” approach, but rather an incremental elicitation of
the information needed to successfully manage the program.
Skipping forward in the sequence of Principle, creates
systemic risk for both the programmatic and technical
elements of the program.
ChapterI
54

Management®
Assess the capabilities being provided through the deliverables
Fulfill the requirements through effort held in the Work Packages
Produce deliverables from
Work Packages
Planned BCWS
Physical % Complete
WP’s contain deliverables
that fulfill requirements
Capabilities
topology defines
requirements
flow down
WP flow must describe the
increasing maturity of the
product or service
Producing the deliverables in the planned
sequence maintains the value stream to
the customer
ChapterI
55

5 Process Areas of
Five core process form the basis of Performance–Based
Project Management®. These processes represent a
sequence of activities that increase the maturity of the
programmatic aspects of a project or program.
The plans that result from these efforts describe the
increasing maturity of the product or services that are the
deliverables from the program.
In order to develop and execute a Plan, a set of
requirements is needed. Before these requirements can be
developed, an understanding of the system capabilities
should be developed.
1. Identify Needed System Capabilities ‒ Define the set of
capabilities (business, operational, or technical) needed
to achieve the program objectives or a particular end
state for a specific scenario using the Concept of
Operations (ConOps). CONOPs is a verbal or graphic
statement, in broad outline, of an assumption or intent in
regard to an operation or series of operations, mission,
or system.
2. Establish Requirements Baseline – defines the technical,
organizational, and operational requirements that must
be in place for the system capabilities to be fulfilled.
Define these requirements in terms isolated from the
implementation details. Only then, bind these
requirements with the technical alternatives.
3. Establish Performance Measurement Baseline – build a
time‒phased network of scheduled activities describing
the work to be performed, the budgeted cost for this
work, and the organizational elements that produce the
deliverables from this work. Define the technical
performance measures showing how this work proceeds
according to the technical and programmatic plan.
4. Execute the Performance Measurement Baseline –
execute the Performance Measurement Baseline Work
Packages, while assuring all performance assessments
represent measures of Physical Percent Complete.
5. Continuous Risk Management – identify, plan, and
budget risk mitigation or retirement activities at assure
impediments to progress are handled.
These five process areas must all be present in some form,
for program success. To skip any process area, or
performance the process area out of order Capabilities,
Requirements, Baseline, and Execution, with Continuous Risk
Management lays the foundation for a Troubled Project.
Each process area builds on the previous area to increase
the fidelity of the actionable information needed by the
decision makers.
This method is independent of any specific development of
engineering process – iterative, incremental, and linear
processes are all equally effective
ChapterI
56

5 Processes of Performance–Based Project Management®
10PracticesofPerformance–BasedProjectManagement®
Chapter I
5
Identify Needed
Capabilities
Establish a
Performance
Measurement Baseline
Execute the
Performance
Measurement Baseline
Capabilities
Based Plan
Operational
Needs
Earned Value
Performance
0% /100%
Technical
Performance
Measures
Business or
Mission Value
Stream
Technical
Requirements
Identify Requirements
Baseline
Technical
Performance
Measures
PMB
Changes to
Needed Capabilities
Changes to
Requirements Baseline
Changes to
Performance Baseline
Chapter IPerformance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 201757 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

5 Performance–Based Project Management®
Processes
Performance–Based Project Management® is a
comprehensive approach to managing cost, schedule, and
technical performance of programs and projects by
assessing the interaction between programmatic and
technical processes. The method starts by capturing the
technical and operational needs of the proposed system.
These are stated in a Concept of Operations describing how
the system operates, how it fulfills the stated mission, what
major components comprise the system, and how they interact
with each other.
From the capabilities description of the Concept of
Operation, technical and operational requirements are
elicited. These requirements define the development progress
of the deliverables captured in the Performance
Measurement Baseline (PMB). This PMB is constructed from a
collection of Work Packages, arranged in a logical network
describing the increasing maturity of the products or services
needed to deliver the stated capabilities. Measures of
physical percent complete are used for each Work Package
and the deliverables they produce. Performance–Based
Project Management® is a Systems Engineering approach to
program and project management [INCOSE], [Stevens].
This method incorporates all three aspects of a program
performance measurement process – Cost, Schedule, and
Technical Performance Measures (TPM).
The inclusion of the TPMs distinguishes the Performance–
Based Project Management® from more conventional
approaches to Program, Planning, and Controls.
In conventional approaches, the cost and schedule baseline
and the variances generate the values for Earned Value.
In the Performance–Based Project Management® method,
measures of Physical Percent Complete are derived from
pre–defined targets of Technical Performance. The Earned
Value variables are augmented with adjustments from the
Technical Performance compliance for each deliverable to
produce a true assessment of progress.
Technical Performance Measures integrate technical
achievement with earned value using risk assessments that
provides a robust program management tool to identify
early technical and programmatic disruptions to a program.
[Pisano] TPMs:
Provide an integrated view across all programmatic and
technical elements.
Support distributed empowerment implicit in the IPT
approach, through interface definitions.
Logically organizes data resulting from systems engineering,
risk management, and earned value processes.
Provide a "real time" indication of contract performance and
future cost and schedule risk.
Support the development of systems thinking within an
integrated program model focused on the interface
definitions.
ChapterI
58

5 Performance–Based Project Management®
Processes
ChapterI
59

1. Identify Needed Systems Capabilities – Define the Measures of Effectiveness (MoE) Performance–Based Project Management®
DEFINE CAPABILITIES AS OPERATIONAL CONCEPTS
Partition system capabilities into classes of service within operational scenarios, identifying actors, processes, and data
Connect capabilities to system requirements using sysML, or some modeling tool to reveal interdependencies and resolve conflicts
Define Measures of Effectiveness (MoE) for these capabilities in units meaningful to the customer and connect each MOE to a Mission need statement
Develop an Integrated Master Plan for the sequence of delivering the needed Capabilities
DEFINE OPERATIONAL CONCEPTS WITH SCENARIOS OR USE CASES
Define scenarios for each system capability, and the measureable benefits to the program’s outcomes
Connect these scenarios in a Value Stream map showing the sequence of work and the produced value
Assess value flow through the map for each needed capability
Identify capability mismatches and make corrections to improve overall value flow
ASSESS NEEDS, COST, AND RISK OF THE CAPABILITY SIMULTANEOUSLY
Assign costs to each system element using a value process model
Assure risk, probabilistic cost and benefit performance attributes are defined
Use cost, schedule, and technical performance probabilistic models to forecast potential risks to program performance
DEFINE EXPLICIT, BALANCED, AND FEASIBLE ALTERNATIVES
Make tradeoffs that connect cost, schedule, and technical performance in a single “trade space” model
Measures of Effectiveness and Measures of Performance are the raw materials for these tradeoffs
2. Establish Requirements Baseline – DEFINE MEASURES OF PERFORMANCE (MOP)
PERFORM FACT FINDING
Produce an overall statement of the problem in the operational context
Develop the overall operational and technical; objectives of the target system through Measures of Performance (MoP) for the requirements
Define the boundaries and interfaces of the target system
GATHER AND CLASSIFY THE REQUIREMENTS
Gather required operational capabilities, functional, nonfunctional, and environment requirements and design constraints
Build a Top Down Capabilities and Functional decomposition of the requirements in a flow down tree using a requirements tool
EVALUATE AND RATIONALIZE REQUIREMENTS
Answer the question “why do we need this?” in terms of operational benefits
Build a cost / benefit model using probabilistic assessments of all variables and dependencies
For technical requirements, perform a risk assessment to the cost and schedule
PRIORITIZE REQUIREMENTS
Determine the criticality for the functions for the system’s mission
Determine tradeoff relations for all requirements to be used when option decision are made
For technical items, prioritize the cost and dependencies
INTEGRATE AND VALIDATE REQUIREMENTS
Address completeness of requirements by removing all TBD items
Validate the requirements agree and are traceable to capabilities, goals, and the mission
Resolve any requirement inconsistencies and conflicts
Chapter IChapter IPerformance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 201760 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

3. ESTABLISH PERFORMANCE MEASUREMENT BASELINE – DEFINE TECHNICAL PERFORMANCE MEASURES (TPM) Performance–Based Project Management®
DECOMPOSE REQUIREMENTS INTO WORK PACKAGES AND PLANNING PACKAGES
Decompose the program scope into a product based Work Breakdown Structure (WBS)
Decompose the WBS into Work Packages describing the production of all deliverables and processes traceable to the requirements
ASSIGN ACCOUNTABILITY FOR THE DELIVERABLES FROM EACH WORK PACKAGE
Assign accountability for Work Packages to a named owner for the management of resource allocation, cost baseline, and technical delivery
ARRANGE WORK PACKAGES IN A LOGICAL ORDER
Arrange Work Packages in a network with defined deliverables, milestones, internal and external dependencies, appropriate schedule and cost margin
DEVELOP THE BUDGETED COST FOR WORK SCHEDULED (BCWS) FOR EACH WORK PACKAGE AND PLANNING PACKAGE
Develop a time‒phased Budgeted Cost for Work Scheduled (BCWS) for labor and material costs in each Work Package
Develop a time‒phased Budgeted Cost for Work Scheduled (BCWS) for the program as a whole
Assure proper resource allocations can be met and budget profiles match expectations of the program sponsor
ASSIGN WORK PACKAGE MEASURES OF PERFORMANCE (MOP), KEY PERFORMANCE PARAMETERS (KPP), AND TECHNICAL PERFORMANCE MEASURES (TPM)
Assign an objective Measure of Performance (MoP) for each critical Work Package deliverable
Trace critical deliverables to the Measure of Effectiveness (MoE) defined in the Capabilities baseline
Summarize these Measures of Performance (MoP) and Measures of Effectiveness (MoE) for the program as a whole
Assign measures of Physical Percent Complete for each Work Package
Assign measures of Physical Percent Complete for the program as a whole
SET THE PERFORMANCE MEASUREMENT BASELINE (PMB)
Establish a Performance Measurement Baseline (PMB) used to forecast Work Package and Project ongoing and completion cost and schedule metrics
4. Execute the Performance Measurement Baseline (PMB) – Maintain Cost, Schedule, and Technical Performance
PERFORM AUTHORIZED WORK IN THE PLANNED SEQUENCE
Using the Work Package sequencing, release work to be performed as planned
With the RACI based RAM, the Accountable delivery manager guides the development of the products or service for each Work Package
ACCUMULATE AND REPORT WORK PACKAGE PHYSICAL PERFORMANCE
Using Physical Percent complete or Apportioned Milestones, capture the measures of “progress to plan” for each Work Package
Report the Physical Percent Complete in a centralized system for each Work Package and he program as a whole
ANALYZE WORK PACKAGE PERFORMANCE
Compare the Actual Percent Complete against the Planned Percent Complete for each period of performance
Construct cost and schedule performance indices from this information and the Physical Percent Complete measures
TAKE CORRECTIVE MANAGEMENT ACTION FOR ANY VARIANCE IN WORK PACKAGE PERFORMANCE
With the cost and schedule performance indices, construct a forecast of future performance of cost, schedule, and technical performance compliance
Take management actions for any Work Packages not performing as planned
MAINTAIN PERFORMANCE MEASUREMENT BASELINE’S INTEGRITY
Record past performance based on Work Package completion criteria
Record previous future performance estimates in a historical database
Forecast future performance against the Performance Measurement Baseline
Report the future performance estimate to the program stakeholders
Chapter IChapter IPerformance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 201761 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

Program Events
Define the availability
of a Capability at a point in
time.
Accomplishments
Represent requirements
that enable Capabilities.
Criteria
Represent Work Packages
that deliver the Requirements.
Work
Package
Work
Package
Work
Package
Work
Package
Work
Package
Work
Package
Work
package
Structure of a Performance–Based Plan
§ Each Event or Milestone represents the availability of one or more capabilities.
§ The presence of these capabilities is measured by the Accomplishments and their Criteria.
§ Accomplishments are the pre–conditions for the maturity assessment of the product or service at
each Event or Milestone
§ Performance of the work activities, Work Packages, Criteria, Accomplishments, and Events or
Milestones is measured in units of “physical percent complete”
Integration of Planning and Scheduling
ChapterI
62

10 practices guide the
deployment of Performance–
Based Project Management®
and the application of the 5
Process Areas.
These 10 practices form the
basis of the “theory” of
Performance–Based Project
Management®, while the
Process Areas enable the
Principles. II10 Practices
Chapter
Chapter II63 Performance–Based Project Management®, Copyright © Glen B. Alleman, 2012 - 2017

Management®
Assess the capabilities being provided through the deliverables
Fulfill the requirements through effort held in the Work Packages
Produce deliverables from
Work Packages
Planned BCWS
Physical % Complete
WP’s produce deliverables
that fulfill requirements
Capabilities
topology defines
requirements flow
down
WP flow must describe the
increasing maturity of the
product or service
Producing the deliverables in the planned
sequence maintains the value stream to
the customer
ChapterII
64

10 Practices of
Practices in Order of Increasing Maturity
1 Capabilities drive system requirements. All requirements must be traceable to a capability.
Requirements identify technical and process deliverables. All deliverables must be traceable to a
requirement.
Work Packages describe the production of deliverables.
Integrated Master Schedule (IMS) arrange the Deliverables, Accomplishments, Criteria, and Work
Packages into a logical – risk adjusted – activity network.
Work Package progress is measured as Physical Percent Complete against the planned progress at time
of the performance assessment.
Work Authorization assures the sequence of Work Packages produce progress at the planned rate for
the planned cost, with the planned product maturity at each assessment point in the IMS.
Earned Value describes the current performance and provides information about future performance.
Conformance with Technical Performance Measures adjusts Earned Value for rework, quality, or delayed
features, using Units of Measure meaningful to the decision makers.
Performance feedback from each WP and program level Earned Value adjusts the WP sequence and
resource allocation to reestablish an on–time, on–budget schedule.
Future performance is based on the To Complete Performance Index (TCPI), Independent Estimate At
Complete (IEAC), and the adjusted work sequence.
ChapterII
65

Capabilities Drive System Requirements
The practices for defining a capability address the flexibility
needed to ensure system responsiveness and sustainability in
a context of constant change, while delivering tangible
benefits to the buyer.
These include: Agility, Tailorability, and measures of a
System Element’s coupling and cohesion.
Governance principles provide guidance to institutionalize a
process, including its continued assessment and evolution over
time in support of the tangible system benefits.
These include: Enforced Rules & Responsibilities, Workflow
Guidance, Continuous Improvement, Transformation enablers.
The core concept of Capabilities Based development is to
focus on the delivery of value. The concept of “Value
Focused Thinking” starts with two methods of decision
making: the 1st focuses on competitive analysis between the
various alternatives, and the 2nd focuses on attaining
organization values as the fundamental objective of any
decision making process. [Pagatto 07]
During the development of the Concept of Operations for
each capability, assumptions must be made in the absence of
specific technical and operational information. To avoid
unwelcome surprises, some form of assumptions based
planning is needed. 1) Make operational plans, 2) Describe
plausible events, 3) Identify the “signposts” for potential
problems, 4) Discover shaping actions that shore up uncertain
assumptions, and 5) take hedging actions to better prepare
for the possibility that an assumption will fail [Dewer02].
Capabilities planning consists of several core processes that
describe the system capabilities in the absence of the
specific technical or operational requirements.
Discover what is not known by reaching a sufficient basic
knowledge level setting the problem space.
Identify problems by understanding the current process,
along with people and technology involved.
Establish boundaries and solution elements. These are
grouped into five categories:
1. Orientation principles align the process on a sound
theoretical basis issued from generally accepted practices
in the areas of engineering, modeling, and acquisition.
These principles include: Capability Thinking, Architecture
Models, Evolutionary Development, and Deliverables
Centric planning.
2. Communication principles enforce the standardization of
vocabulary and structure of information to be exchanged
within or outside the process.
These include: Standardized Formats and Common
Terminology to describe the system capabilities.
3. Collaboration principles enable active and timely
participation of all stakeholders involved in the
engineering of a capability.
These include: Collaborative Engineering and Information
Sharing between the contributors of the system capability
elements.
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Capabilities Drive System Requirements
¨ Establish the system capabilities by describing the fundamental ideas about the
system through the operational behavior.
¨ Do this before the technical and process requirements are elicited.
¨ Use these Operational Concepts (OC) to describe how the system achieves the
beneficial outcomes before any commitments are made to the implementation.
¨ Use a Capabilities Based Assessment (CBA) to define gaps in the current system and
the approaches to providing capabilities within a specified functional or operational
concept.
¨ Construct three capability assessments: Functional Area Analysis (FAA),
Functional Needs Analysis (FNA), and Functional Solutions Analysis (FSA).
¤ Functional Area Analysis (FAA) is a capabilities based task analysis that provides the
framework for assessing required capabilities for the success of the system.
¤ Functional Needs Analysis (FNA)assesses the ability of the current system to accomplish
the needed tasks identified in the FAA, in the manner prescribed by the concept under the
operating conditions and to prescribed standards.
¤ Functional Solutions Analysis (FSA) is an operationally based assessment of the
potential strategies, organizations, training, leadership and education, personnel, facilities,
and materials (technologies) for solving open of more of the capability needs.
ChapterII
67

Requirements Identify Technical and
Process Deliverables
Inadequate requirements engineering is a common problem
in the development of any complex system.
There are many issues associated with requirements
engineering, including failure to define the system scope,
failure to foster understanding among the different
communities affected by the development of a given system,
and failure to deal with the volatile nature of requirements.
These problems lead to poor requirements and the
cancellation of development, or else the development of a
system that is later judged unsatisfactory or unacceptable,
has high maintenance costs, or undergoes frequent changes.
[Young04], [Grady06]
By improving requirements elicitation, the requirements
engineering process can be improved, resulting in enhanced
system requirements and potentially a much better system.
Requirements engineering is decomposed into the activities
of requirements elicitation, specification, and validation. Most
of the requirements techniques and tools today focus on
specification, i.e., the representation of the requirements.
The Performance–Based Project Management® approach
concentrates on elicitation concerns, those problems with
requirements engineering that are not adequately
addressed by specification techniques.
The elicitation methodology to handle these concerns. Is
provided by [Cristel92].
Whatever the actual process used, the following activities
are fundamental to all Requirement Engineering
processes:[Sommerville05]
§ Elicitation – Identify sources of information about the
system and discover the requirements from these.
§ Analysis – Understand the requirements, their overlaps,
and their conflicts.
§ Validation – Go back to the system stakeholders and
check if the requirements are what they really need.
§ Negotiation – Inevitably, stakeholders’ views will differ,
and proposed requirements might conflict. Try to reconcile
conflicting views and generate a consistent set of
requirements.
§ Documentation – Write down the requirements in a way
that stakeholders and software developers can understand.
§ Management – Control the requirements changes that will
inevitably arise.
ChapterII
68

Requirements Identify Technical and
Process Deliverables
¨ Derive the system requirements for each system capability.
¨ Assure a requirement exists for each system capability needed to fulfill the
mission of the system.
¨ Develop the traceability from capabilities to requirements to produce a
“minimalist” system, with each requirement being present only because of a
needed system or mission capability.
¨ Test requirements by answering the question “why do we need this feature,
function, service, or capability?”
¨ Create Technical Performance Measures: [IEEE 1220]
¤ High priority requirements that have an impact on: mission accomplishment,
customer satisfaction, cost, system usefulness.
¤ High risk requirements or those where the desired performance is not currently
being met: the system uses new technology, new constraints have been added,
the performance goal has been increased, but the performance is expected to
improve with time.
¤ Requirements where performance can be controlled.
¤ Requirements where the program manager is able to rebalance cost, schedule
and performance.
ChapterII
69

Work Packages Describe Production of
Deliverables
Staying focused on decomposing the system capabilities into
clearly defined streams of functionality is a critical success
factor. This effort decouples the technical functionality from
the system capabilities – increasing cohesion and reducing
coupling between each stream.
This decomposition is almost never optimal the first time
around. The false sense of urgency to decompose the system
requirements into a Work Breakdown Structure will cause
extra work later on. Investing in a carefully developed WBS
will pay back later in the program by isolating the work
processes into supporting value streams.
There is no set of instructions on how to do this. But starting
the WBS in a graphical form, putting that diagram on the
wall and asking coupling and cohesion questions about the
terminal nodes in the WBS is one way to “test” to goodness
of the WBS.
The construction of the Work Breakdown Structure (WBS)
starts with the decomposition of the requirements into
collections of deliverables. Focusing on the deliverables is
critical.
The Work Packages that result from this decomposition are
the vehicles for producing the deliverables.
When these deliverables exist they provide the capabilities
requested by the system to perform it function.
All resources – internal and external, their dependencies,
and any other items needed to produce the deliverables –
are defined in Work Packages. The Work Package Manager
is accountable for managing all these resources.
If resources are not under the control of the Work Package
Manager, the risk to the success of the deliverables is greatly
increased, because …
Accountability is no longer traceable to a single person –
violating the principles of the Responsibility Assignment
Matrix.
Performance reporting for Physical Percent Complete is no
longer represented by tangible items within Wok Package.
Each Work Package produces one deliverable. This
deliverable may have a Technical Performance Measure
attached – a Measure of Performance (MoP) or Measure of
Effectiveness (MoE). These Technical Performance Measures
connect the dots between Cost, Schedule, and Technical
maturity of the deliverable.
In the absence of Technical Performance Measures, the
Performance Measurement Baseline lacks the ability to
connect physical percent complete with the increasing
maturity of the product or service.
ChapterII
70

Work Packages Describe Production of
Deliverables
¨ Use the Work Packages (WP) executable tasks to produce deliverables at the
conclusion of each WP duration.
¨ Avoid connections between WPs that are not Finish‒to‒Start at the WP
boundaries, this “hides” dependencies.
¨ Work contained in the WP produces a single or small number of deliverables.
¨ Use performance measures at the Work Package level to assess the progress
of the increasing maturity of the deliverables produced by each WP.
¨ Do not measure effort, the passage of time, or consumption of resources as
assessments of progress.
¨ Use apportioned milestones, 0%/100%, 50%/50%, and other forms of
incremental physical progress as a credible measures of percent complete at
the WP level.
¨ When performance measures of actual delivered value are used, the physical
progress of the program becomes a credible measure success.
¨ Measuring Earned Value for each task within the WP may be of little value for
the program without a measure of Technical Performance (Measures of
Effectiveness and Measures of Performance).
ChapterII
71

Master Schedule Sequences Deliverables,
and Work Packages in a Network
Arranging the Work Packages in a logical network is an iterative
process. It should be obvious which major deliverables come first,
second and later.
Building an initial network, plotting that network in the Big Visible
Chart, hanging that chart on the wall and standing in front of it
with all the Work Package Managers is part of developing a
credible PLAN for the program.
The PLAN is the strategy for delivering the business capabilities
the customer asked for. With the Big Visible Chart, this strategy is
made visible – or at least more visible than a list of Work
Packages.
The strategy for delivering the program should be mapped out in
some wall walk manner to make the connections obvious.
This hands on approach is much better than burying the
relationships in a program plan or spread sheet.
Making the first cut is a hands on process. The arrangement of
Work Packages should start with some simple rules:
1. All relationships are Finish to Start. This initial arrangement
provides visibility into the dependencies that will drive
schedule compression. Non FS relationships create
opportunities to use partially complete work in future efforts,
resulting in “rework,” the predecessor efforts are complete.
2. There should be no “lead” or “lag” arrangements. These
create hidden dependencies and hidden schedule
compression.
3. The only constraints on the network should be a “Must Start
On” (MSO) for the start date and “As Soon As Possible”
(ASAP) for all other activities. Any other constraints create
hidden dependencies. This appears harsh at first, but is the
basis of an “ideal” schedule. Other constraints may be added
later, but only for necessary reasons, that are described in the
IMS Narrative.
4. The flow of Work Packages should create a description of the
increasing maturity of the products or services of the project –
not just the consumption of resources and production of
deliverables. This Maturity description should be meaningful to
the customer in terms of business capabilities.
At this point in time we will be able to perform the following
business capabilities.
5. Speaking in these terms, the customer gains insight into the
actual progress of the program. Speaking in consumption of
resources, production of code, passage of milestones is not
that meaningful to the customer
6. Point estimates of cost and schedule are meaningless without
the range of possibilities, the level of certainty in achieving
each value, and how these estimates impact the credibility
that the program will complete on time, on schedule, and with
the planned technical performance.
ChapterII
72

Master Schedule Sequences Deliverables,
and Work Packages in a Network
¨ Arrange Work Packages in an un–constrained Activity Network.
¨ This network is a description of the flow of increasing maturity of the product or service
resulting from the completion of each Work Package.
¨ This network answers the 6 critical questions needed for success:
¤ Who is responsible for performing this the work?
¤ What are the constituent components of the work and what is the evidence that they are complete?
¤ When is this the work required to be completed?
¤ Where will this work be performed?
¤ Why does this work need to be done?
¤ How does this support the acceptance of the product or service by the customer?
¨ Postpone the detailed scheduling until there is a credible WP process flow increases the
visibility into dependencies as well as programmatic and technical risk and its mitigation.
¨ Define the Exit criteria for each WP the describes what “done” looks like and what technical
maturity is needed to proceed to the next WP.
¨ The schedule of work within the WP can then be developed by the “owners” of the work effort
– the Work Package Manager (Control Account Manager).
¨ Cost, Schedule, and Technical Performance values must be described in statistical terms, within
a range of possible values and the probability of their occurrence.
ChapterII
73

Work Package Progress Measured as
Physical % Complete Against Plan
Measuring progress to plan can ONLY be done with Physical
Percent Complete (PPC).
Any other measure of progress can not be connected to the
delivery of business value to the customer. This is the basis of
Earned Value and it is also the basis of Agile Software
Development methodologies. Deliver working code at all
times.
Using the 0% /100% assignment or the Apportioned
Milestone assignment, the Physical Percent Complete is
multiplied by the Budgeted Cost of Work Scheduled
(Planned Value, PV) for the entire Work Package to produce
the Budgeted Cost of Work Performed (Earned Value, EV).
PMI has used BCWP(EV) = PPC X Budget at Completion,
where BAC = Sum(all Work Packages BCWS)
This is the ONLY way BCWP(EV) can be produced. Any other
way creates an invalid baseline measure of progress to plan.
With the Work Packages defined, the BCWS(PV) spreads
for each Work Packages established and the Work
Packages assembled into a credible network, a Performance
Measurement Baseline can be established.
Step by Step check list for setting the baseline:
1. All BCWS spreads have been balanced against
available resources for that Work Package and the
program as a whole. This is a long, difficult and very
unpleasant process. But letting a scheduling tool do this
work has several undesirable outcomes:
§ The longest date usually results, since the tool spreads
the resources according to their availability.
§ The planners of the program will not actually
understand the resource spreads assigned by the
machine
§ The day to day decisions of assigning work will now
be removed from those who can make the decisions
§ The visibility into the logical process of assigning work
is lost and the planners are simple observers
2. All Work Packages have apportioned milestones, 0/100,
50/50, or 25/75 assignments of Earned Value
(BCWP)(EV)
3. All data fields in the schedule have been assigned and
checked
ChapterII
74

Work Package Progress Measured as
Physical % Complete Against Plan
¨ Measure progress as Physical Percent
Complete to provide a credible
assessment of the increasing maturity of
the delivered product or service.
¨ Use each work activity in the Work
Package to provide some form of
progress toward producing the
deliverable.
¨ Use this progress as an incremental
measure of the overall progress of the
Work Package.
¨ Predefine how each work effort
contributes to the overall progress of the
Work Package.
¨ Have the Work Package owner describe
the incremental Physical Percent Complete
is terms of tangible evidence of progress
to plan.
¨ Assure what “done” looks like is defined
in terms of the Physical Percent Complete
of the Work Package, Measures of
Effectiveness, and Measures of
Performance.
¨ Capture this definition in the Work
Package documentation.
¨ Ask the question:
¤ How Long Are You Willing to Wait
Before You Find Out You Are Late?
¨ Measure physical progress to plan soon
enough before that period of
performance arrives, so management
corrections can be made to stay on cost,
schedule and technical performance.
ChapterII
75

Work Authorization Assures Work
Packages Produce Planned Progress
The work authorization system is used by the program
manager and his or her designees in order to approve all
work throughout the course of the current program
management venture.
The work authorization system will typically be in the form of
a list of formally adopted and well‒ documented
procedures. Work authorization procedures specifically
detail who may authorize work to be completed and how
those authorizations may be obtained.
These procedures will include which documents must be
completed prior to work being initialized, and whether there
are any other prerequisites to work being performed at any
particular level during the program. To better assist the
efficiency of program management in larger programs, work
authorization systems sometimes detail the timeline of the
program.
For instance, the work authorization system might include at
which points in time certain portions of the program should
be completed, in which order those tasks are to be
completed, and by whom.
It is important for program management to be aware of how
they convey the work authorization to their staff. To ensure
that spoken words are not misinterpreted, written directions
for the Work Packages provide explicit guidance.
The Work Package can be anything which might need to be
accomplished to produce a deliverable.
By providing a written work authorization, those in program
management can be assured that their wish to have the job
done by the right people, at the correct time, and in the right
order.
The Project Manager needs to be cautious to write out the
exact steps on the work authorization. This prevents
misunderstandings and mistakes along the line. To have the
work done correctly the first time, the manager must have
good communication skills with his workers, both in the writing
of the authorization and in answering any questions which
might arise. Proper direction given to employees in the work
permitting directive will ensure that the task is completed in
the expected manner.
ChapterII
76

Work Authorization Assures Work
Packages Produce Planned Progress
¨ Executing the Work Packages (WP) in the agreed sequence assures
the program proceeds as planned.
¨ This approach starts with a Work Authorization and control
processes and continually monitors, Late Starts, Late Finishes,
Schedule Margin erosion, and Technical Performance Measure
compliance.
¨ Work Authorization does not inhibit the performance of work, but
assures that work is performed in the planned sequence with the
planned programmatic risk reduction, to continuously increase the
maturity of the product or service.
¨ “Out of sequence work” creates programmatic and technical risks:
¤ It disrupts the Earned Value calculations – work without a budget in the
planned period is an overrun. Planned budget without actual work being
performed is recorded as an under run. In both cases EV is reported
improperly.
¤ The strategy developed for sequencing work to increase the maturity of
the product or service is disrupted.
ChapterII
77

Earned Value Describes Current
Performance
From the ANSI‒748 Guideline:
§ The Earned Value Management System (EVMS)
incorporates business best practices to provide strong
benefits for program or enterprise planning and control.
§ The processes include integration of the program scope,
schedule, and cost objectives, establishment of a baseline
plan for accomplishment of program objectives and the use
of earned value techniques for performance measurement
during the execution of the program.
§ The EVMS provides a sound basis for problem
identification, corrective actions, and management
replanning as may be required.
§ Any Earned Value Management System must:
§ Plan all work scope for the program through completion.
§ Integrate program work scope, schedule, and cost
objectives into a baseline plan against which
accomplishments can be measured.
§ Objectively assess accomplishments at the work
performance level.
§ Analyze significant variances from the plan and forecast
impacts.
§ Provide data to higher levels for management decision
making and implementation of management actions.
For the benefits of Earned Value to be fully realized,
thorough planning, combined with the establishment and
maintenance of a baseline for performance measurement is
needed.
The combination of advanced planning, baseline
maintenance, and earned value yields earlier and better
visibility into program performance than is provided by
non‒integrated methods of planning and control.
The key to success is to establish the performance baseline at
the Work Package level. The Work Package is the point at
which work is planned, progress is measured, and earned
value computed.
ChapterII
78

Earned Value Describes Current
Performance
¨ Recognize Earned Value is cost based. Cost Variance and Schedule
Variance have the same units of measure – Dollars.
¨ Use the To Complete Performance Index (TCPI) and the Independent
Estimate At Completion (IEAC) as measures of progress derived from
Earned Value. But they are also measured in dollars.
¨ Using the TCPI and IEAC, the program manager has visibility into the
work performance needed to stay on schedule and the forecast cost
of this effort.
¨ Recognize the credibility of these indices depends on the credibility
of the underlying earned value numbers. This is the primary
motivation for maintaining good data on the program. Otherwise
the Earned Value numbers are not only wrong, they provide no real
value for guiding management in decisions that impact the future
performance of the program.
¨ Consider using Earned Schedule [ES] to complement Earned Value
[PMI EV]. Earned Schedule is a method of deriving schedule
performance from Earned Value data [Lipke], [Henderson04],
[Vanhoucke]
ChapterII
79

Conformance with Technical Performance
Measures Adjusts EV Performance Values
Technical Performance Measures (TPMs) are traditionally
defined and evaluated to assess how well a system is
achieving its performance requirements.
Typically, dozens of TPMs are defined for a system. Although
they generate useful information and data about a system’s
performance, little is available in the program management
community on how to integrate these measures into a
meaningful measure of the system’s overall performance risk.
TPMs may be combined to measure and monitor the overall
performance risk of a system. The approach consists of
integrating individual technical performance measures in a
way that produces an overall risk index.
The Program Manager must be cognizant of three basic
program elements (baselines):
§ Cost
§ Schedule
§ Technical Performance
The first two are tracked through cost and schedule control
systems (earned value).
The last is tracked through the technical performance
measurement (TPM) system. TPM is the program manager’s
early warning system, when correlated to cost and schedule
reports, to provide the complete status of the program.
The TPM method includes selecting Technical Performance
Parameters; assigning weights; linking to CWBS; planning
progress over time; getting data; evaluating variances; and
taking corrective action as needed.
Variances indicate level of risk and detect new risks before
their effects on cost/schedule are irrevocable. The TPM
approach involves:
§ Assessing technical characteristics of the system and
identify problems through tests/analyses.
§ Surfacing inadequacies in time and dollars.
§ Complements cost/schedule performance measurement
§ Providing a basis for cost/schedule revisions.
§ Facilitating the verification of results achieved against
technical requirements and what remaining technical work
can be accomplished within established budgets.
ChapterII
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Conformance with Technical Performance
Measures Adjusts EV Performance Values
¨ Adjust the “Earned Value” forecast of future performance by the
compliance with Technical Performance Measures (TPM).
¨ Correlate Technical Performance Measures with cost and schedule to
provide the complete status of the program.
¨ Use Technical Performance Measures to add “technical achievement”
to Earned Value’s cost and schedule metrics.
¨ Assess the program’s progress in terms of technical compliance,
potential rework, postponed functionality (to later Work Packages
or rolling waves) and other dilutions of the physical progress of the
program.
¨ Use Technical Performance Parameters (TPPs) to indicate key areas
for risk reduction and program success.
¨ Technical Performance Measures (TPMs) are a time–phased progress
plan for achievement of critical TPPs.
ChapterII
81

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