Friday, June 29, 2012

Recruitment of Project Managers

One of the most important activities of Program Management is to assign Projects to Project Managers. That's why I often think about ways of recruiting people for each component. The people of Human Resources many times have told me how difficult is, for them, to find persons for this special profile. I have already made a kind of structured advice that I would like to share with whom be interested.

There are good and bad Project Managers, nobody is perfect, but you would be interested in finding the best person that your budget and circumstances allow. My advice is to put attention in three characteristics or skills:
  1. One of these skills is easy to obtain, if the candidate hasn't got this skill, he/she could quickly obtain it.
  2. The second skill is not so easy to obtain, if the candidate hasn't got this skill, he/she could slowly obtain it, as long as somebody else gives opportunities to him/her.
  3. The third skill is so difficult to obtain that if the candidate hasn't this skill, it could be almost impossible to change that fact. Don't waste your time with that candidate.
The three skills are esential part of a good Project Manager and are described as follows.

The first skill, the one that is easy to obtain, is knowledge. If you want to be a Project Manager and you don't have this skill, don't worry, it is very easy to obtain, you can learn. Many trainers are dedicated to help people like you with these themes and you can learn the basics in a short time. For the people of Human Resources, my advice is that you can train people, do never reject a good candidate because he/she hasn't had formal education in Project Management.

The second skill, the one that is very difficult to obtain, is experience. You can't quickly obtain experience. There is an intrinsic contradiction in that. You need to be dedicated, pacient and open minded to get experience. It's slow and are no much things we can do to accelerate that. There is no such a thing as a good Project Manager that has never failed in a project. You get more experience when you fail and easy success creates dangerous people. For the people of Human Resources, my advice is never hire a Project Manager that seems perfect. The best one is somebody that has made mistakes and is still learning about it. Never reject a good candidate because he/she has made mistakes.


The worst part of getting experience is the cost. Not too many organizations want to pay for the mistakes of Project Managers because it is very expensive. You can take advantage of the mistakes of Project Managers in other organizations. These other organizations have already paid the cost of the experience that you can obtain for free. Nevertheless, it is obviously a dangerous bussiness, the next asignment for that person needs to be at the level of the experience that he/she has. A huge challenge is going to burn the person. A tiny one is so boring that you are going to loose the person in the midle of the project.

The third skill, that fact that is almost impossible to change, is personality. According to many definitions, personality is something that define's you, those characteristics that comes with you since your birthday. A good Project Manager is not shy, has good communication skills, is so smart that you can't notice that, is a balanced person and strong in values. It's easy to distinguish, give this person an opportunity and she/he will become a leader. If you are not such a person, let me say that you wouldn't be easily.

The three winners are: knowledge, experience and personality, ordered from fast to slow, easy to impossible, cheap to expensive. A simple recipie for the most difficult dish that you ever have prepared.

Wednesday, March 21, 2012

Progress Measurement in Activities with Zero Cost


How much is the cost of waiting? Sometimes there is a financial cost because of the frozen assets, at other times there is an indirect cost related with waiting human resources. Nevertheless, this indirect cost is commonly modeled as a general separated work package. In the most common case, there are activities without cost; at least, there are activities without “direct cost”. This is the reason why you can find the field called “delay” in the majority of the project planning tools. See the following example of the second coat of painting.



The Planned Value, as we commonly know it, doesn’t change during the waiting time. This is because the PV is measured in the dimension of cost and the “delay activity” doesn’t have cost. As a consequence, EV1 and EV2 have the same value at t2. Seeing Earned Value, it looks like the project is equally good in both situations. Unfortunately, the project is delayed by time “d” in the second case.

Somebody could say that the solution is to observe earned schedule (ES), because ES is measured in time. Well, my answer is no, according with the most common way to define ES, earned schedule fails too. Let’s take a look, ES is commonly defined as “the time at which the amount of earned value (EV) accrued should have been earned”. Then, when t=t2, ES1 = ES2. It doesn’t help.

My recommendation is to use a measured ES instead of a calculated ES. What does this mean? Well, divide the Schedule Progress Value in units of time to each measurement period. The Schedule Progress will be automatically accredited at the end of the period if the “waiting time” already started, otherwise, if the delay didn’t start, then no progress will be accredited. It’s impossible to have a Schedule Variance in the cost dimension with this method but it is possible to have a Schedule Variance in the time dimension if the delay didn’t start on time. Doing this, when t=t2, ES1 = t2 and ES2 will be t1.

It is important to warn you about people trying to sell “earned schedule calculators”. This problem continues if you use an “earned schedule calculator”. This problem is only solved using “earned schedule measuring”.

Friday, January 6, 2012

Program Management vs Project Management

Have you ever thought that your project would be a program? “If all you have is a hammer, everything looks like a nail” [Bernard Baruch]. Is your problem a nail or a screw? Is it possible that you see your needs as a project because you know about project management? According with the PMBoK© of the PMI®, a big project can be divided into sub-projects. According to “The Standard of Program Management”© of the PMI®, a program is a “group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually”. I think that sometimes to manage related “components” as a project or as a program is simply a decision. You can manage them in both manners, but this will probably be the most important decision you will take in the process and it is going to significantly increase or decrease your probabilities of success.

In Program Management there are “components” that can be “projects” or other kinds of work, like “ongoing services”. If you need to manage something that can’t be defined as a project because of its continuous nature, then you don’t have a big project, you have a program.

In Program Management you decide to start components if some conditions are satisfied. You are not going to start to build something that nobody can maintain or operate. In Program Management this is always an explicit concern and in Project Management it depends on the project plan. If you need to review the start and finish of components according to superior reasons, you probably have a Program.

In Program Management the promise to the sponsors and stakeholders is more related with benefits than scope. Of course a program has a scope but the emphasis is put on benefits instead of scope. If your promise sounds like “give dwelling to a hundred people” and you are designing a solution for that; or your promise sounds like “generate green energy in an innovative way” and you are visiting innovative facilities in order to decide, then you probably have a program, not a project.

Many Programs are reviewed in decision gates every year and receive new funds after that revision. That’s why a Program manager needs to be prepared for regular auditing processes. If the Program is still useful and is creating benefits, it is probably going to be extended. This seems opposed to the definition of project, however, it is very common in Program Management.

It’s sad to say that I often see managers fail trying to manage programs as if they were projects. I hope you have seen this article before you have to choose and decide wether you need a hammer or a screwdriver.

Sunday, October 30, 2011

Behind schedule since project planning

If you have two parallel activities preceding one, your project will be probably late. This is not rhetoric and certainly not ironic. It’s a mathematical fact.

Let’s take a plan of two activities ending at the same time. Let’s suppose the time estimation for the activities was made so that it’s equally probable to finish each activity before or after the estimated ending time t (the common way). The probability that both activities end in a moment less or equal to t, will be the product P( x <= t )P( y <= t), hence ½ * ½ = ¼. It means that it is improbable that activities end on time.

The most likely finish time can be calculated adding the mean duration to the start time. The duration is a non deterministic variable. It has a probability distribution that depends on the activity nature. Nevertheless, I’m going to show this simple fact doing mathematics with two activities with different exponential distributions starting at different times. The result can be seen in the following image. The two activities can be modeled as one. The most probable ending time of the composite activity can be obtained adding delta (δ) to the ending of the parallel activities.



What is the importance of this? This is a common problem doing plans. There are projects condemned to being late from the planning stage. Make the plan using feeding buffers as it is recommended by the people of “critical chain”. This is a good manner to avoid this problem. Of course you can ask consultants like me, to help you with these issues.

Proof

Let's calculate the most probable finish time of the composite activity.


The density function has the following probability:


The formula is:

The inferior limit d is because the function has zero value before the limit:


Replacing with the exponential probability functions:


Reordering:


Integrating:

The result is the finish of the activities plus delta (δ):


Wednesday, September 14, 2011

Risk in Project Management

Project appraisers have the tendency to be over optimistic. There are two clear tendencies that govern this behavior. One comes from a natural human characteristic and the other comes from voluntary, deliberate and ethically reprehensible actions.

Wishful thinking is the formation of beliefs and making decisions according to what might be pleasing to imagine instead of appealing to evidence, rationality or reality. Holding all else equal, subjects will predict positive outcomes to be more likely than negative outcomes. In one straightforward experiment, all other things being equal, participants assigned a higher probability to picking a card that had a smiling face on its reverse side than one which had a frowning face.

In other way, planners may deliberately underestimate costs and overestimate benefits in order to get their projects approved, especially when projects are large and when organizational and political pressures are high.

No matter the origin of over optimism, you need to overcome it. The result of a project will be always better if you work with reality. Let me say something important: risk is part of reality. Even more, risk is part of the cost. That part of the cost is named “Expected Monetary Value of Risk” (EMV) and it exists.

Let’s make a physical analogy. Quantum mechanics, also known as quantum physics or quantum theory, states a fundamental limit on the accuracy with which certain pairs of physical properties such as the position and momentum of a particle, can be simultaneously known. This is also known as the uncertainty principle.

In practice, it means that we work with the probability of being at a position in a determined moment. It does not mean that matter doesn't exist. It means that there are properties that can't exactly be known, in certain conditions. Try to kick a brick of quantic matter without shoes. You are going to realize that matter exists. You are going to feel exactly the same if you ignore the Expected Monetary Value of Risk when calculating ETC (estimate to complete) of a project. The same is valid to calculate the budget of a project.

How is EMV calculated?


Friday, August 19, 2011

Program Overseeing

Let's remember first that a Program is "a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually". Interpreting the definition, there are actions that could be taken in order to improve the whole result, even though some of these actions could be bad for a project in particular. In this article, I'm going to explore the basic actions for a program.

I have used certain common graphs to oversee programs for years that I'm going to change in this article, in order to present a new graph that bears in mind concepts of "earned schedule".

In the following graph, every bubble is a project. As it was explained at definition, I have replaced the x-axis by SPI, calculated as ES/AT instead of EV/PV. Otherwise, using the classical definition of SPI, every project is going to finish over the y-axis. Using SPI=ES/AT, the final position of a project will be determined by the time performance.



In this graph, the size of a bubble is determined by ETC. According to this, every project is going to end as a point.

In the following quadrant, we see the result of a bad estimation or a remarkable execution. In any case, it's better to analyze details because there is an opportunity of improvement. If the EAC confirms the tendency, my recommendation is to cut budget of the yellow project as a formal change control and increase the budget of the red project in the opposite quadrant. With the increment of budget, the red project should "buy time" that means to use the new economic resources to improve the time performance.



In the following quadrant, we see a more common situation. The blue project has a bad cost performance with a good time performance. If the EAC confirms the tendency, my recommendation is to "sell services" to the green project in the opposite quadrant. It means that blue project is going to be delayed because of a new charge of work, but this is not a problem. In return, the green project is going to release the economic resources that the blue project needs. Both changes need to be formal; otherwise we are going to patronize a bad practice: scope creep.



The last recommended actions are only ideas for an hypothetical ideal situation. Not always the proposed changes can be done. Naturally, the program manager needs to apply his own criteria after consider the real conditions.

Monday, August 1, 2011

EVM Forecasting Analysis

It's good reviewing graphically EVM forecasting in order to understand possibilities and limitations. The EVM most known formulas need certain corrections to be used in practical applications. These corrections came from the practice of "earned schedule". Let's remember the definition of Earned Schedule (ES), projecting the current value of EV over the PV curve. We could use the "t" following the acronym to differentiate the Schedule Performance Index calculated with ES from the classical Schedule Performance Index calculated as EV/PV, as you can see at following picture.

Click to maximize

Using triangles similarities, it’s possible to obtain the Estimate At Completion (EAC) in the time dimension, as you can see at following picture.

Click to maximize

 
Now we can remember that the maximum value of EV is BAC. Then we have an end point and with it we can trace a linear forecasting of EV.

Click to maximize

 
Analogically, Cost Performance Index can be used as a ratio to forecast the Estimate At Completion in the dimension of cost. Using EAC it's possible to have a forecasting for AC.

Click to maximize

 
This way, we can have a forecast for cost and time. This way of forecasting EV and AC is taking the past as enough information to predict the future. A better result is obtained if we categorize activities such way that the past performance is applied only to similar activities in the future.

Monday, July 11, 2011

EVM Web

I have created Earned Value Management Web (http://evmweb.com), a collaborative system based on EVM. It has an "Integrated Changes Control" too. It is free for majority of users. Temporally the system is available in English and Spanish and is open to beta testers.

Like many other professionals, I discovered EVM while I was preparing my PMP certification test. I found that it is possible to implement an EVM system over many common project management systems even datasheets, possible but not probable. I had been slave of the datasheet for years. The efforts of implementing the system were comparable with benefits. I have found that those systems are not focused on EVM and I decided to create something more specialized. Sign up now. I hope to receive your opinion and your help to improve it.

Tuesday, June 21, 2011

EVM for Small Projects and Big Projects

Have you ever managed a small project?. Off course, small projects are the rule and big ones are the exception. Nevertheless, all of us have learned about how to manage big projects and only a few of us have learned how to manage small ones.
If you only have experience in small projects, don’t be ashamed of that. Small projects have small budgets and go very fast. If you don’t think that fast projects with small budgets are difficult, probably you don’t know too much about projects. Sometimes, I have thought that good project managers really are tested in small projects.
It’s easy to say what a kick-off meeting needs to have, when you have weeks and even more to prepare it. When you have only a couple of days to prepare it, you don’t have too much time to think about philosophy. In that case, you better know today what is necessary to say, because you will not have another opportunity.
Have you ever tried to oversee a small project using EVM?. Well, tell me if this doesn’t sound familiar to you: It’s is almost impossible to know how the cost that has being spent. If you are not agreeing with last statement, think again. A few of main reasons for this are:
  • The first report of accountability probably is going to be as late as the project.
  • The majority of bills are received close to the end of the project.
  • Human resources efforts are controlled counting (with the fingers of your hands) how many people you can see and comparing with how many people have you planed.

Receive a few suggestions of an expert in small projects (me):
  1. Maintain it as simple as possible
  2. Is there a simpler form of EVM that can be used in small projects? Yes, there is. EVM doesn’t mean you need to measure every hour spent in your project. A good way to avoid the task of oversee each hour, is to define mean values and big units of efforts, like month-person.
  3. EVM's standard measurement methods include the alternative of LOE (Level of Effort). It means you can measure human resources efforts, like project management, to be accounted automatically when the time goes on.
  4. Another simplification is possible. The Accounting Principles say that a cost is accounted when it occurs. No matter if the bill was printed and, certainly it doesn't matter if it was in your hands. Define at the beginning of project a mechanism to formalize the cost, even though the accounting could go slower.
Off course, using a good and simple EVMS will be a big help to diminish the efforts to oversee a project. Let's remember that I promised to launch a web based EVMS in July 2011. I’m working on it.

Thursday, June 9, 2011

NASA proposed to reduce requirements for Earned Value Management System for firm-fixed price (FFP) contracts

According to the Federal News Radio, recently NASA proposed to scale back its requirements for establishing and maintaining an Earned Value Management System for firm-fixed price (FFP) contracts. It means that for small FFP contracts, there is not going to exist the need of a complete application of the known technique.

I have used EVM in small projects for many years with a spreadsheet and an assistant. The Practice Standard for Earned Value Management of the PMI has 50 pages and is very easy to read and apply. The ANSI/EIA-748-B-2007 has less than 25 pages and is equally easy to apply. Nevertheless, I have reviewed some public documents of NASA about EVM and I think that the system is big and complex. Probably, the processes of NASA were designed for projects larger than US$ 50 millions.

EVM is a good technique that combines measurements of scope, schedule, and cost in a single integrated system. When properly applied, it provides an early warning of performance problems even for small projects. It is clear that the majority Project Management Systems are not focused in EVM and are not a very good help. That’s why I’m building a simple web based EVM system that is going to be launched on July of this year. Please, send me a message if you want to become a beta tester for it.