How to Track Costs in Agile Phases of Hybrid Projects?

What EVM Adaptation Works Best for Hybrid PMP Cost Management?

Learn to track Agile costs in hybrid projects using adapted EVM for value-driven metrics, balancing predictive baselines with sprint flexibility to control budgets effectively in PMP certification scenarios.

Question

You are managing a hybrid project that combines traditional project management with Agile methodologies. In one of the Agile phases, you need to track costs to ensure that the project stays within budget. You are faced with different approaches to managing costs in Agile phases. In a hybrid project, which approach should you use to effectively track costs during the Agile phases?

A. Use fixed-cost budgeting to track the costs in each sprint.
B. Use time tracking for team members and charge back costs based on hours worked.
C. Use value-driven metrics such as earned value management (EVM) adapted for Agile.

Answer

C. Use value-driven metrics such as earned value management (EVM) adapted for Agile.

Explanation

In hybrid projects combining predictive and Agile methodologies, tracking costs during Agile phases requires adapting Earned Value Management (EVM) to measure value delivered per iteration against planned budget and actual costs, using metrics like story points for earned value, sprint burn-up charts for planned value, and team velocity for progress assessment to ensure alignment with overall project funding. This value-driven approach replaces rigid fixed-cost sprint budgets by focusing on business value from completed user stories, enabling early variance detection (e.g., CPI from EV/AC) while accommodating scope adjustments via backlog refinement, unlike simplistic time tracking which ignores value or fixed budgets which stifle Agile flexibility. It integrates predictive cost baselines with Agile tools for hybrid control, supporting predictive certification principles of performance measurement in mixed environments.