Schedule Management Techniques For Complex Projects

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Schedule Management Techniques For Complex Projects. W. Scott Nainis Noblis, Inc. August 12, 2009. Today’s Agenda. Motivation for the topic Why do many projects get behind (and cost more)? How do we track project progress? Role of Earned Value Transition to Earned Schedule - PowerPoint PPT Presentation

Text of Schedule Management Techniques For Complex Projects

  • Schedule Management Techniques For Complex ProjectsW. Scott NainisNoblis, Inc.

    August 12, 2009

    Project Management Seminar Series 2009

    *Todays AgendaMotivation for the topicWhy do many projects get behind (and cost more)?How do we track project progress?Role of Earned ValueTransition to Earned ScheduleHow can we be both Pessimistic and Optimistic at the Same Time?How can Event Chains (and similar simulation approaches) help us?Power of Synergy How can ES and Event Chain work together?How is the schedule management article related to other articles within the SIGMA PMO Edition?

    Project Management Seminar Series 2009

    *Motivation for the TopicHistoric value of quantitative methods for project management role of management science/operations research (MS/OR)PERT (Program Evaluation and Review Technique)CPM (Critical Path Method)Network and Optimization (linear programming, dynamic programming, simulation, etc.)What has MS/OR done for project management lately?Project management tools (e.g. MS Project) have incorporated many of the MS/OR quantitative methodsSimulation (Monte Carlo analysis, simulation-based training, what-if analysis) has been an active area for development

    Project Management Seminar Series 2009

    *Motivation for the Topic (Concluded)What is still one of the biggest problem areas in project management project scheduleProjects come in very late or never (61% IT projects fail / 78% are late or over budget)Project costs and project quality often suffersWhat techniques and approaches can support project schedule management?

    Project Management Seminar Series 2009

    *Why do Many Projects get Behind (and cost more)?Overly optimistic project schedulesHuman naturePolitical pressuresLack of effective responses to project problems as they occurNeed to anticipateTime and cost to implement

    Project Management Seminar Series 2009

    *Why are We Overly Optimistic in Project Estimation?Human nature tends to overestimate achievement and tends to forget negative outcomesDaniel Kahneman and Amos Tversky performed research into the psychological underpinning of such biases (Kahneman received the Nobel Prize in 2002 partially for these theories)Research has shown that people estimate overly-optimistically even in spite of contrary evidencePolitical forces apply pressure for optimistic forecasts even if planners are aware of the risks and less optimisticPressure from supervisors and peersDecision-making forces optimistic forecasting (e.g. competitive contracts)

    Project Management Seminar Series 2009

    *Over-Optimism and Political Pressure Lead to Unrealistic Project SchedulesProject Managers take the optimistic, shortest estimateProject issues during execution are ignoredLengthen planned scheduleRaise costs and lower cost-benefit assessmentRaise issues that need to be resolvedNot prepared ahead of time for many contingenciesDont Forget Plain Old Incompetence

    Project Management Seminar Series 2009

    *Example: Bostons Big DigBoston wanted to submerge the Central Artery- an elevated highway that bifurcated the city for nearly 50 years.Serious planning started around 1980By 1985 the estimate for the work was:Project length 10 yearsProject cost 2.8 Billion dollarsWork concluded December 31st 2007Project length 22 yearsProject cost $14.6 Billion plus about $7 billion in interest for a total of nearly $22 billionStill not done, definitely not not the litigation!

    Project Management Seminar Series 2009

    *Alternative Methods for Project ForecastingConcept of insider forecasting versus outsider forecastingDeveloped in 2006 to the concept of Reference Class ForecastsUse of real data from similar projectsBecome aware of what can actually go wrong with complex projectsTake into account the distributional nature of project activities, impacts and resultsAllow for input and appraisal from those who are not too close to the project

    Project Management Seminar Series 2009

    *Alternative Methods for Project Forecasting (concluded)

    Parametric Software Project Cost and Schedule Estimating TechniquesCOCOMO II, CoStar, Cost Modeler, CostXpert, Knowledge Plan, PRICE S, SEER, SLIM, and SoftCostThe above methods have aspects of being reference-based approachesHow good is the data? Will it be used fairly?Heuristic: Task-based versus Time/Support-based estimation Collective WisdomUse of simulation-based project management tools

    Project Management Seminar Series 2009

    *Heuristic Scheduling ExampleSmall Project budget estimationSimple Data Analysis and Reporting Project of Four tasks:Task-based Approach

    Task 1: Develop Data Collection Plan (Staff A and B - 40 hours each, Staff C 10 hours)Task 2: Collect Data (Staff B, D, and E - 80 hours each)Task 3: Analyze Data (Staff A and B - 80 hours each)Task 4: Produce Results Presentation Report and Deliver Report (Staff A and B - 60 hours each, Staff C - 15 hours)Total Staff Hours = 625 hours + 10% contingency = 690 hoursPlacing Tasks End-to-End would result in 2.5 month schedule, rounded up to 3 months.StaffA Main InvestigatorB Right-hand supportC - Oversight MangerD - Date CollectorE Data Collector

    Project Management Seminar Series 2009

    *Heuristic Scheduling Example (Concluded)Time/Support-based Approach

    Experience tells us this is no less than a four month projectStaff A is the project leader day-to-day 70% of time requiredStaff B is the other main on-going support person 50% of time requiredStaff C is the oversight senior manager 10% of time requiredStaff members D and E are focused on data collection 50% of time required over a 1.5 month windowAssume 158 hours available per staff per average monthAllocation: Staff A 440 hours, Staff B 320 hours, Staff C 60 hours, Staff D and E 120 hours each = total 1,060 hours.About 50% greater hours than the Task-based approach, 33% -38% longer schedule

    Project Management Seminar Series 2009

    *How do We Track Project Progress?Start with a base-line project scheduleProject subtasks and milestones completedKeep track of project expenditures compared to project budgets and credit for task completedKeep track of change control status and map back to current schedule estimates may not be that apparent

    Project Management Seminar Series 2009

    *Role of Earned Value ManagementEarned Value Management (EVM) has developed over the years as an important approach to management of both project budget and scheduleTrack project for budgeted versus actual expendituresUse the metrics from project financial measures to track project progressRequired by OMB for most software projectsOMB Circular A-11, Part 7 (ANSI/EIA Standard 748) 7Time is typically not an explicitly tracked quantity

    Project Management Seminar Series 2009

    *Earned Value (EV) = 48 at week 10Earned Value and Schedule Performance

    Project Management Seminar Series 2009

    *Earned Value and Schedule Performance (Continued)CV= 48 48 = 0SV and SPI still as before.Earned Value and Cost PerformanceCV= 48 79 = -31CPI = 48/79 = 0.61CPI = 48/48 = 1.00

    Project Management Seminar Series 2009

    *Earned Value and Schedule Performance (Continued)

    Project Management Seminar Series 2009

    *Earned Value and Schedule Performance (Continued)

    SV reaches 45 and then goes to 0 at the end of the project

    Project Management Seminar Series 2009

    *Earned Value and Schedule Performance (Concluded)

    Project Management Seminar Series 2009

    *Earned Value and Schedule Performance (Concluded)SPI reaches a low of 0.72 but then tends back to 1.0 as the project completes 7.5 months late!Schedule Delay

    Project Management Seminar Series 2009

    *What is Earned Schedule?Simple, but elegant conceptUses EVM data to produce a more useful index of project schedule statusDevised in 2003 by Walter Lipke, software project manager who has pioneered the use of EVM for software development project managementEmpirical studies found Earned Schedule (ES) to be a superior predictor of project schedule and completion

    www.earnedschedule.com

    Project Management Seminar Series 2009

    *Calculating Earned Schedule (ES)ES = 7 (first 7 weeks of schedule progress) + Portion of week seven accomplished [(48-45)/(54-45)=0.33] = 7.33 weeks

    Project Management Seminar Series 2009

    *How Can We be Both Pessimistic and Optimistic at the Same Time?

    Monte Carlo simulation analysis allows us to consider reference class forecastingDistributional impacts on activities duration and costTakes into account the interaction of project activity eventsLeads to longer, more costly and pessimistic forecastsNeed a way to counter-balance the pessimistic trends with Monte Carlo simulationConsider risk moderation responsesWhat if? responses considered ahead of time

    Project Management Seminar Series 2009

    *Basically We Need to Establish a Risk Analysis Exercise During Project Planning and Continue It During Project Execution Source: Jane Powanda, Noblis, Inc.

    Project Management Seminar Series 2009

    *How can the Event Chain Method help us?An external event can occurs which impacts the status of one or more project activitiesIn response to the first event subsequent events are triggered to respond to the effects of the first eventEvent Chains are established and simulation software is used to track and manage all the events across the project activitiesInterventions included in response events attempt to modify and manage the inherent risk to the project

    Project Management Seminar Series 2009

    *Project Activities Can be Linked Through an Event ChainExcitedState Events can be external and autonomous a Triggering Event

    Event can be in response to a Triggering event

    Project Management Seminar Series 2009

    *Event Chains Can Initiate Mitigat