Newsletter Volume 2 No.1

Volume 2, No. 1

“Helping You Accelerate Your High-Tech Development Projects”

Welcome to the ANGOTTI PRODUCT DEVELOPMENT e-mail newsletter!

The goal of this newsletter is to help you accelerate your development projects by sharing some of the many tips, techniques and strategies we’ve honed during our two decades of providing high-tech consulting services.

This issue is part two of two issues that discuss the need for methods to keep track of Project Progress by measuring the project plan against what is actually happening as the plan unfolds. This is one of the most tricky, and often underused part of the Project Manager’s tools.

PROJECT VISIBILITY PART II

Last month, we discussed the need for increasing visibility into project status as critical to project success. (See Newsletter Volume 1 No. 6 for this initial description) This month, we will discuss, more in depth, two unusual methods that allow for improved status reporting. This involves what we will refer to as “Quasi-Earned Value” and “Quasi-Critical Chain” methods of project tracking. The main focus is to show how to create graphical images that improve project visibility.

The purpose is to trade off a “feeling in the tummy” for some more objective measures for a project’s status. Both of these approaches are rather technical, but the results of their use can be very effective, so its worth reviewing them.

USE “QUASI-EARNED VALUE” TO TRACK PROJECT PROGRESS

As mentioned in Part I, one straightforward method to track projects is to use the MS Project to create Reports suitable for this “Earned Value” feature. Unfortunately, this information is only available in the Reports feature of MS Project. The data must be manually transferred from the Reports to a spreadsheet. Generating this information is not straightforward and easy. But the work is worth the effort, if one wishes to make project status more visible. The report data is entered into a spreadsheet that can then used to produce a plot of estimated versus actual accumulated project progress and cost.

THROW AWAY PRECONCEIVED NOTIONS OF EARNED VALUE

To make this method work, one has to throw out any preconceived notion of “Earned Value” and any relationship it bears to the actual financials on a project. We are looking here for a method of obtaining a special plot in the easiest manner possible. What we want is to allow the Project Manager to show the accumulated resource cost “earned” by the completion of tasks, as the project progresses. This is plotted along side what was originally estimated. As each task completes, it “earns” its value as the percentage completion increases towards one hundred percent. Hence, both “expended” resources towards completion and the original plan are shown together plotted over time.

Such an approach normally produces the famous “S” curve of completion for a project, but in this case, the curve is weighted by the value of the resources used. An earlier approach that was used had the completion of tasks marked off and then accumulated. This weighted all tasks equally instead by the size of the resources used. The “Quasi- Earned Value” method shows progress in a way that no milestone chart or Gantt chart could ever do. It provides a “dead reckoning” look at where the project is, compared to where it was originally estimated to be.

WHAT DOES THE GRAPH LOOK LIKE?

The result will look like the graph illustrated at the following link Earned Value. Note that the graph shows three plots marked BCWS (Budgeted Cost of Work Scheduled, Blue), BCWP (Budgeted Cost of Work Performed, Purple) and ACWP (Actual Cost of Work Performed Green) respectively. These are Earned Value terms.

Each of these graphs shows an accumulated number, plotted as a function of time. The BCWS is the accumulated value of the work that was originally scheduled. Hence, it can be plotted at the beginning of the project. It is derived from a crosstab custom report of
cumulative cost of each task versus each 1/3 month period for the project. This is the baseline that is placed into a spreadsheet at the beginning of the project.

The BCWP plot is the accumulated value of the “work performed” as a function of time. It is placed in the BCWS spreadsheet, and is created and updated each week during the project. It is derived from a custom report that shows the BCWP by week. This is also taken from a custom crosstab report that can be created each week during the project. It is then accumulated in the spreadsheet to create the data for the graph. The data changes as the percentage completed for each project is updated each week. This is the “Earned Value” for the project. Tasks that are not complete definitely show up in the graph as a schedule slip.

The ACWP plot is the accumulated value of the ACWP for the project and is derived in a similar manner to the BCWP, but for ACWP. This is a plot of the actual cost of the work performed, accumulated by week. This plot shows how the project actual (scheduled) cost is doing compared to what was originally estimated. Both of these give a powerful look into the project progress.

WHAT DOES THIS GRAPH INDICATE?

The graph illustrated does not have the usual “S” curve, because the project is a “repeatable” one with no need for much “front end” work. This is unlike most Product Development projects. It shows that the project, near the end of September, is about two weeks behind schedule for all tasks being tracked. It is also spending a bit more than planned, about $5,000 more out of about $30K. This is true without regard to what the Gantt chart Critical Path indicates. These are not good trends, and may require corrective action.

USING “QUASI-CRITICAL CHAIN” TO TRACK PROJECT PROGRESS

Critical Chain Style project management has some interesting concepts that are useful in managing projects. Although we are not “true believers” in the Critical Chain approach, both myself and others think it has some merits worth looking at.

One important concept of Critical Chain is the idea of having a schedule buffer built into a project at several points, but especially at the end. These buffers allow for a possibility of having a high probability of creating a project that finishes “on time”.

MORE ABOUT THE CRITICAL CHAIN CONCEPTS

We have two papers on our website, by two PM associates that cover the idea of Critical Chain in greater depth than is presented here. If you are interested in these approaches, you are invited to review them there. The first is by Dr. Dohn Kissinger, of Profit Solutions, “Faster, Better, Cheaper”. The zip file contains a paper by me that describes a set of lecture slides, and the actual set of lecture slides. Dr. Kissinger is a certified Goldratt Institute trainer.

The second paper is by Vincent McGevna, PMP. It to can also be found at Critical Chain as an Extension to CPM. This paper describes some practical ways to use Critical Chain together with Microsoft Project, and without any special “add on” programs.

In both instances, for visibility, the focus in on the buffer size to be used to create a practical contingency.

USING CRITICAL CHAIN METHOD FOR VISIBILITY

To create visibility in a project, the Project Manager can show other managers and the project sponsor a plot of the Critical Chain buffer size plotted as a percentage of the buffer size used over time, starting from the project beginning and continuing throughout the project. This plot shows the actual amount, and the rate of
consumption of the buffer on the project.

From a project management point of view, the standard way to use this approach is to consider the point at which the buffer size reaches 50% of the available buffer to be very significant. This can be assumed to be a major trigger point for a complete project plan update. If the methods outlined in the Kissinger and/or McGevna presentations are used, the buffer should be about equal to 1.0 to about 2.0 times of the Root Sum Square of the difference between the nominal and most pessimistic estimates to complete for the tasks along the CRITICAL PATH. This becomes the buffer that is then added to the end of the project
plan and then tracked via the plot.

GIVE THESE A TRY

The approaches described here are not normally used by project managers. And, except for the “up front” work, they take very little
effort to help track a project and provide very valuable information to help with management decisions.

QUESTIONS

The preceding description of tracking tools is a very short presentation of how these methods might work on a real project. If you want to have a more in depth understanding of the approaches presented, please give us a call at (408) 462-2189 and we will be happy to speak with you.