From Russia With Love:

Transcription

1 From Russia With Love: Truly Integrated Project Scope, Schedule, Resource and Risk Information Vladimir Liberzon, PMP and Russell D. Archibald, PMP

2 Presentation Objectives Describe proven methods used in Russia: Success Driven Project Management/SDPM: Unique aspects Discuss its application on a real project Compare SPDM with earned value & critical chain methods

3 Success Driven Project Management/SDPM Planning Stage: Set target dates and requirements Calculate success probabilities Determine contingency reserves required Execution and Control: Calculate current probability of achieving goals Track success probability trends Manage contingency reserves

4 Success Probability User defines acceptable probability of success to meet specific scope, schedule & cost targets System forecasts resulting required resources and contingency reserves

5 The Project Planning Dilemma Goals: Complete project ASAP with minimum cost, and also Develop plan with guaranteed 100% success But 100% plan will not be competitive today

6 Resolving the Dilemma Competitive, realistic plan must: Make success of project probable (something less than 100%) But still make it acceptable to project stakeholders Requires evaluation and negotiation of various target success probabilities leading to well-informed decision to proceed

7 Resource Critical Path/RCP True (resource) critical path must reflect ALL schedule constraints: resource, finance, supply, calendar, & imposed dates All constraints must be considered in both forward & backward passes

8 All Project Information Is Inter-related Project scope affects schedule, resources, cost, & risk On many projects this information is not truly integrated because: Separation of responsibilities Most PM software does not properly integrate and calculate it

9 Eight Integration Methods Used 1. Systematic scope definition (indentured structures) 2. Network planning 3. Resources: Consumable, renewable, created Units, teams/crews, interchangeable units Assigned to project activities Constraints in both forward & backward passes

10 Eight Integration Methods (Cont d) 4. Activity durations calculated: scope or volume rate 5. Risk simulation based on 3 estimates of: Resource usage or productivity rates Work scope & volume Activity duration (if estimated directly) Calendar/weather variation

11 Eight Integration Methods (Cont d) 6. True (resource) critical path calculated: Logical & schedule constraints Resource limitations in both the forward and backward passes Progress to date 7. Actuals reported and compared, contingency reserves tracked

12 Eight Integration Methods (Cont d) 8. Current probabilities of success calculated and trends determined: Schedules Costs Resources

13 Methods Unique to SDPM 1. Multiple breakdown structures 2. Resource information & analysis 3. Activity duration calculation or estimation 4. Resource critical path, resource floats, & contingency resource reserves 5. Risk simulation & success probability analysis 6. Success probability trends

14 1. Multiple Project/Work Breakdown Structures Life cycle phase Deliverables Physical areas Responsibilities Functional type of work Cost account Contract Others

15 2. Resource Information & Analysis Two types: Consumable: materials, supplies & other expendables Renewable: labor, equipment, facilities Units, teams, or assignment pools Standards for resource productivity per activity volume unit of work

16 3. Activity Duration Calculation or Estimation Activity volume is estimated (any measurable units) Volume often used as initial estimate & duration calculated using resource productivity factors Uncertainties forecast by varying productivity factors

17 4. Resource Critical Path True critical path reflects ALL schedule constraints: Network logic, resource, finance, supply, calendar, imposed dates Activity float must reflect ALL constraints Most PM software packages ignore resource constraints on backward pass: incorrect critical path

18 4. Resource Critical Path/RCP (Cont d) Activity resource float & resource critical path reflect resource constraints during backward pass Activity resource float used feasibly: Shows possible delay considering set of available resources Add financial & resource constraints to critical chain you then have RCP

19 5. Risk Simulation & Success Probability Analysis Single, deterministic estimates produce plans with low probability of success Risk simulation produces reliable results Range estimates are used for all initial data: Optimistic, most probably, pessimistic

20 5. Risk Simulation & Success Probability Analysis (Cont d) Most probably and pessimistic often include additional activities & costs, may employ different resources & calendars Define desirable probabilities: target dates, costs, consumption rates for main P/WBS elements Analysis determines related requirements

21 5. Risk Simulation & Success Probability Analysis (Cont d) Data is basis for negotiating & approval to proceed Negotiations may establish new targets Success probability is defined as the probability of meeting targets: Dates, cost, quantity Success probability best indicator of current project status during execution

22 5. Risk Simulation & Success Probability Analysis (Cont d) Target schedule is the backward pass resource constrained schedule using most probable estimates Contingency reserves or buffers: Difference between activity start times (or cost, material requirements) in the optimistic and target schedules

23 6. Success Probability Trends Success probabilities calculated periodically and stored Their trends show current project status Negative trend indicates corrective action needed Positive trend indicates performance is OK

24 6. Success Probability Trends (Cont d) Success probabilities change due to: Performance status Changes in risk estimates Project managers are encouraged to solve uncertainties ASAP This can increase success probabilities even with activity finish delays & cost overruns

25 6. Success Probability Trends (Cont d) Postponing problem activities leads to negative trends in success probabilities This attribute of success probability trends is especially useful in new product development project management

26 Illustration Using an Actual Project Our forum discussion now turns to actual project displayed on the walls Displays are too large to include in these slides and the written paper Next slide shows how the success probability trends are presented

27 Probability Trends for Sample Project

28 EVA Trends for Sample Project CPI% SPI% CPI & SPI trends Percent

29 SDPM and Earned Value Analysis SDPM success probability trends reflect performance results plus network dependencies & project risks EVA reflects only performance results Sample project on previous slide: SPI exceeds 100% on August 11 But probability of meeting baseline finish date equals zero (next slide)

30 Probability Trends for Sample Project

31 Earned Value Analysis EVA approach not totally integrated EVA considers sunk costs but not: Network logic dependencies Project risks Resource performance (productivities) EVA problems illustrated in following slides for simple project

32 Sample Project Gantt Chart

33 EVA of Sample Project If activity 3 is started first (in spite of the Gantt chart schedule) then after the first week the SPI will be 10 or 100% But on-schedule completion will be impossible!

34 EVA of Sample Project

35 Using EVA Recommend applying EVA to critical path activities only Cannot use EVA from one project phase to forecast results of another phase if resources are different.

36 Common Features: SDPM & Critical Chain Method/CCM Resource critical path is same as critical chain CC project buffer analogous to SDPM contingency time reserve Resource float is analogous to CC feeding buffers Both recommend using optimistic estimates to set schedule

37 Differences With Critical Chain Don t agree that one should always avoid multi-tasking Don t accept CC assumptions that: Critical chain never changes Only one project drum [critical] resource exists Our experience: critical resources change in different project phases

38 Differences With Critical Chain CC more qualitative than quantitative Time & cost reserve usage evaluation: SDPM: Success probability trends show if reserves expended faster or slower than planned; more effective than: CC: Qualitative judgment whether buffers were properly utilized

39 Experience Using SDPM Applied for over 15 years in Russia: Construction Software development Telecommunications Defense Ship building Many other areas Spider software automates the process

40 Recommendations for Implementing SDPM Simulate uncertainties to obtain probability distributions Set desired target probabilities, then calculate requirements to meet them Use data to negotiate realistic commitments

41 Recommendations for Implementing SDPM (Cont d) Set agreed dates & costs, calculate success probabilities Set optimistic targets for project implementers and manage calculated contingency reserves

42 Recommendations for Implementing SDPM (Cont d) Control risks, revise & recalculate success probabilities reflecting progress, changes, & risk estimation updates Manage with success probability trends: Negative trends: take corrective action regardless of current level of success probabilities

43 Conclusions For effective project management, truly integrated information is required: Scope Schedule Resources Cost Risk

44 Conclusions (Cont d) Truly integrated information is practical to produce Identifying the resource critical path and calculating success probability trends produce more successful project performance

45 Are These Methods Practical? Applied to hundreds of projects over past 15 years Comparisons of calculated results using other popular PM software packages show significant differences

46 Questions? As time permits now, and During the remainder of the Congress Via /web: Vladimir Liberzon Russ Archibald Info on Spider package:

47 Thanks for Listening We appreciate your comments We look forward to further feedback and exchange