MBH1123 Project Scope, Time and Cost Management Prepared by Dr Khairul Anuar. Lecture 8 Project Time Management - IV

Transcription

1 MBH1123 Project Scope, Time and Cost Management Prepared by Dr Khairul Anuar Lecture 8 Project Time Management - IV MBP1123 Scope, Time & Cost Management Prepared by Dr. Zohreh

2 Content 1. Alternative PERT/time 2. Scheduling Problems 3. The Myths of Schedule Compression 4. Critical Chain 2

3 1. Alternative PERT/time Because of the many advantages of PERT/time, numerous industries have found applications for this form of network. A partial list of these advantages includes capabilities for: Trade-off studies for resource control Providing contingency planning in the early stages of the project Visually tracking up-to-date performance Demonstrating integrated planning Providing visibility down through the lowest levels of the work breakdown structure Providing a regimented structure for control purposes to ensure compliance with the work breakdown structure and the statement of work Increasing functional members ability to relate to the total program, thus providing participants with a sense of belonging 3

4 1. Alternative PERT/time Even with these advantages, in many situations PERT/time has proved ineffective in controlling resources. Earlier we defined three parameters necessary for the control of resources: time, cost, and performance. With these factors in mind, companies began reconstructing PERT/time into PERT/cost and PERT/performance models. PERT/cost is an extension of PERT/time and attempts to overcome the problems associated with the use of the most optimistic and most pessimistic time for estimating completion. PERT/cost can be regarded as a cost accounting network model based on the work breakdown structure and capable of being subdivided down to the lowest elements, or work packages. 4

5 1. Alternative PERT/time The advantages of PERT/cost are that it: Contains all the features of PERT/time Permits cost control at any WBS level The primary reason for the development of PERT/cost was so that project managers could identify critical schedule slippages and cost overruns in time to correct them. 5

6 2. Scheduling Problems Every scheduling technique has advantages and disadvantages. Some scheduling problems are the result of organizational indecisiveness, such as having a project sponsor that refuses to provide the project manager guidance on whether the schedule should be based upon a: least time, least cost, or least risk scheduling objective. As a result, precious time is wasted in having to redo the schedules. 6

7 2. Scheduling Problems However, there are some scheduling problems that can impact all scheduling techniques. These include: Using unrealistic estimates for effort and duration Inability to handle employee workload imbalances Having to share critical resources across several projects Overcommitted resources Continuous readjustments to the WBS primarily from scope changes Unforeseen bottlenecks 7

8 3. The Myths of Schedule Compression Simply because schedule compression techniques may exist does not mean that they will work. While most people are willing to accept that costs could exceed expectations, and might even take a perverse delight in recounting past examples, the same is not true of deadlines. This is probably due to the fact that cost over runs are resolved in-house, while schedule issues are open and visible to the customer. There might be ways in which a schedule can be held no matter what happens. 8

9 3. The Myths of Schedule Compression In general, you can only be sure that a task will finish on time if: The scope of work is flexible, at least to some extent. It will be possible to calibrate the task from the early part of the work to tell if the planned work rate is adequate. You can raise the work rate and/or reduce the scope of work to bring the task back on target in the time left after you find it is heading for an overrun. There are five common techniques for schedule compression, and each technique has significant limitations that may make this technique more of a myth than reality. Refer Table 12 3 in Kerzner. 9

10 3. The Myths of Schedule Compression "Crashing" the schedule means to throw additional resources to the critical path without necessarily getting the highest level of efficiency 10

11 4. Critical Chain Executives use projects as a primary means to meet their goals. In trying to meet their goals, executives often describe three major challenges in project management: Choosing the right projects from among a large pool Getting each project to completion more quickly Funneling more projects through the organization without adding resources Critical Chain is a project management methodology designed to address the latter two goals. 11

12 4. Critical Chain Critical Chain is based upon a general improvement methodology called the Theory of Constraints, which addresses the first executive goal choosing the right projects. Choosing the right projects is part of strategic planning As executives attempt to release new projects into the organization, they often hear complaints that people are overloaded. Inevitably, they face a conflict between moving resources to the new project and allowing resources to continue working on existing projects. People in the organization may also urge the executive to delay the start of the new project while the executive feels compelled to move ahead. 12

13 4. Critical Chain Executives believe that their role is to push people as hard as they can to perform to high standards. As a result, the reaction of many executives to the resource conflict is to demand that existing projects be finished earlier so that their new projects can begin sooner. These demands leave project managers with their own huge conflict. In order to finish a project sooner, most project managers find that they are forced to either reduce scope or quality or add resources, which will exceed the budget. None of these alternatives is acceptable to executives. 13

14 4. Critical Chain The resulting behavior, which is now prevalent in many organizations, is the fodder for a new approach called Critical Chain Project Management. When project and resource managers fail to convince executives to delay the start of a new project, they often take three actions that lead to many other negative effects: Multitasking of resources Working toward cutting task estimates Managing people very closely to ensure that they meet their due dates 14

15 4. Critical Chain Since executives are a major part of the system of projects inside organizations, Critical Chain recognizes that executives are part of the problem. To solve the problem and have a major impact on project results, executives must therefore be part of the solution. The Critical Chain solution to scheduling and managing projects was derived from a methodology called the Theory of Constraints (developed by Dr. Eliyahu M. Goldratt) 15

16 4. Critical Chain Goldratt applied the 5 focusing steps: These steps are: 1. Identify the system s constraint. 2. Decide how to exploit the constraint. 3. Subordinate everything else to the above decision. 4. Elevate the system s constraint. 5. If, in a previous step, the system s constraint has been broken, go back to step 1. 16

17 4. Critical Chain Within any project, the Critical Chain is defined as the longest chain of dependent events where the dependency is either task or resource related. This definition assumes that the longest chain is the one that is most likely to impact negatively the overall duration of the project. The Critical Chain is not necessarily equivalent to the project duration since, sometimes, there are noncritical tasks that begin before the Critical Chain tasks begin. The Critical Chain solution recognizes the Critical Chain as the leverage point for reducing the project s duration. 17

18 4. Critical Chain The first focusing step, identify, recognizes that managers put practices into place that block the reduction of the Critical Chain. The exploit and subordinate steps implement changes to condense the Critical Chain (in other words, to shorten the amount of time it takes to complete a project). Critical Chain implements major behavioral changes in project managers, resource managers, team members, and executives. The only way that so many people in an organization can accept such fundamental changes is through a deep understanding of the current behaviors, the new behaviors required, and the benefits. This is usually accomplished through education of executives, project managers, resource managers, and team members, followed by policy and measurement changes. 18

19 These changes include: 4. Critical Chain An end to the practice of measuring people in any way on the accuracy of their estimates An end to the practice of measuring people on meeting due dates for individual project tasks A system, agreed to by all executives and senior managers, of allowing new projects to start only when a strategic resource is available The recognition of the need to strategically protect projects from task time variations, by using properly placed buffers. 19

20 4. Critical Chain The significant reduction of the practice of multitasking by moving toward dedicated work on project tasks The implementation of multiproject software with the data actually being used by executives, resource managers, and project managers. Critical Chain reports present a common and accurate picture of the organization s projects and a systematic and logical way to manage variances. The implementation of buffer management as a key management and executive process for identifying project problems during execution 20