The Hard-Nosed Project Manager

Integration of Earned Value and Risk Management webinar

Today I finally listened to the recording of the PMI Risk Management CoP webinar called Integration of Earned Value and Risk Management.

Glen Alleman issued his own comments previously, here are mine.

I am in a situation that is somewhat different from the one discussed in the webinar.  I typically don't work on fixed cost projects so I do my own risk management activities.  My clients do theirs; I do communicate my risk assessment to clients.  The Management Reserve (MR) is invisible to me until a risk turns into an issue that requires funds to mitigate.  The size of the MR is actually unknown to me.  Same goes with any slack they built in after the deadlines they communicate to me.

Given that, if a risk does not materialize or if it is mitigated using the existing budget (with or without drawing on the MR), what is left is returned to the pot for use at a later date (or not).  Same goes with any slack in the schedule.

I would add a Work Package (WP) to the schedule only if the risk, now an issue, involved a missing deliverable.  Otherwise, tasks would be added to an existing work package and to the schedule.  In either case the MR might get drawn down and Earned Value (EV) affected.  If I deliver more value to the project, as opposed to fixing an unforeseen issue, more value is being delivered and that offsets the potential change is cost.

Although it does not happen in my projects; if a risk does not occur, I don't see how leaving the associated funds (or slack) in the PMB would improve performance.  If I read Glen's comments accurately, we are on the same page.  No deliverable equals no value and keeping the extra funds in the calculation would mess up EV.  Same with any extra slack; no issues does not mean you get free slack.

I liked the answer on the use of Monte Carlo simulation in risk management.  Limiting the Monte Carlo simulation to the tasks on the critical path is dangerous in my opinion.  You could have significant changes in the critical path of a schedule depending on the varying work durations during the simulation.

I would also not say that the MR is for "unknowns unknowns" in the schedule.  A bit too Donald Rumsfeld for my taste and also a bit too restrictive in my opinion.

Overall it was an interesting webinar because it gives some insight on how grown ups manage projects.  If a risk become an issue you keep on using good project management practices instead of watching the wheels fall off the cart.  I also liked that there was not too much material for the hour and that the presenter did not have to race through the presentation.

What do you think?  As always questions and comments are welcome.

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Does Earned Value Work on All Projects?

The joke about project management as well has Earned Value is that we use the same words to describe a mouse as we do a herd of elephants.

- Roger Kent in the January 2012 edition of PM Network, Feedback page

Wow!  That is quite a statement.  I started reading this issue because I wanted to read the articles about Agile (more on that in future posts) but this pearl almost made me choke on my sandwich.

Project management is not a one size fits all activity; actually pretty much nothing is.  Project management is also not about dogma.  If someone needs to comfort themselves in project management fundamentalism I suggest they find something else to do.  You don't want to do EV?  Though, it is not because something is difficult for you to do that you just can forget about it.

As for the military saluting and doing as they’re told (another pearl from the same letter), I’ll take that as a compliment.  Soldiers get the job done.

I’ll go back to doing me EV on my crappy, short term, sub $1M, non-defense and non-aerospace project…

What do you think?  As always questions and comments are welcome.

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PMI Project Risk Management CoP webinar 12/19 - Integrating Earned Value with Risk Management

There will be a PMI Project Risk Management CoP webinar titled “Integrating Earn Value with Risk Management" on  12/19at 12h00 Eastern.  This subject is very interesting and was the subject of a post by Glen Alleman.

I won’t be able to attend due to other commitments but will review the recording when it becomes available.

Run, don’t walk (or crawl)!

Yeah, I know, it should be the other way around; but often it is not.  Why people or companies try to start any endeavour directly at the top instead of progressing from their current level evades me.  In project management you often see this with PMOs or Enterprise Project Management (EPM).

Enterprises get into a mad rush to create one or many PMOs when, up to that moment, they had never thought of actually managing projects or of having any type of processes however simple.  Suddenly an Encyclopaedia Britannica sized manual lands on your desk and every newly christened PM must abide by all of its teachings.  The reality is that typically these new processes are ill formed, ill fitting, and bypassed as much as possible.  Of course processes evolve on a weekly basis. 

The PMO craze has been going on for years now and in many organizations is in its Nth incarnation.  PMOs are not useless unless you design them to be that way.

EPM is the newer craze but in many regards follow the same path as PMOs.  I know of an organization where, up to very recently, no schedules where ever prepared yet they have gone whole hog on EPM.  You have to prepare a schedule, upload it, and maintain it.  Simple, no?  Maybe, maybe not:

• You are told not to put too many tasks in your schedule (nothing below deliverables).  When you contradict that edict with a whopping 700 tasks for a 6 month, 10 person project you find out why; the poor server can barely load, save, and publish something that size.  Forget resource levelling; my laptop is more powerful.
• In total contradiction with the prior directive, schedules are treated like a collection of post it notes.  Everything that comes to mind is now required to go into the schedule.
• In total contradiction with the prior directive everything that your sponsor does not want to explain must be taken out of the schedule even if doing so deletes predecessors or successors.  You can always add them later!
• You must stick to the original end date regardless of delays, scope changes, resource shortages, or whatever else happens.
• When you ask for the WBS field to be part of the enterprise template you are asked by the EPM administrator if you mean Work Breakdown Structure.  What else the freaking hell could I mean?  You are then told that you have to wait for a meeting of the steering committee to find out if adding your field will be allowed.  Something tells me that no one on that committee has ever run a project.
• You are told that you need to update a traffic light status based on earned value metrics but promptly find out that none of the EV related fields are visible.  I guess I’m supposed to go to that steering committee for that too.  By the way I found out that the traffic lights are not linked to EV anyway; they are set by hands and there are no guidelines for setting them.  All green anyone?

I guess that, if you insist on jumping off a plainly visible cliff, you may as well run and be out of your misery sooner instead of inching up to it.

What do you think?  As always comments are welcome.

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Job description SNAFU – We have a winner!

It didn’t take much time (30+ minutes) and we have a winner to our Job description SNAFU contest!  Andrew Lavinski correctly identified the problem as being a CPI of 1.0 or less.

They are asking you to stay within 5% of budget which is a feat by itself but even better the CPI has to be below 1. The kicker is that if the CPI goes below 1, your project is costing MORE than budgeted. So, they are asking you to LOSE money, but not more than 5%...

What do you think?  As always comments are welcome.

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Job description SNAFU

Because I love project management and because I’m a proud Canadian I decided earlier this year to create my very own LinkedIn group called CanadianPM.  One the most useful features of LinkedIn groups is their job boards.  I do contribute a lot to my group job board, copying job descriptions I see in other places and publishing those that are sent to me by other LinkedIn users.

A sad observations is that, in many cases, the job descriptions are thrown together by some recruiter with minimal understanding of what he or she is looking for.

Here is an excerpt from a job description I saw yesterday.  See if you can spot a problem with it other than the typo. 

Sucessfully (sic) manage XXX, YYY, ZZZ and other projects as assigned achieving a CPI ratio of 1.0 or less.

Achieve customer satisfaction levels.

All projects delivered with a budget variance of less than 5%.

Report to the PMO bi weekly utilizing Earned Value Management metrics.

The first person, other than Glen B. Alleman, that spots the problem gets bragging rights.  Glen is disqualified from all EV related contest for reasons obvious to all who follow his blog; I have to keep this fair...  If no one answers by Monday, 9/27 at 12h00 Eastern I’ll reveal the glaring mistake.  Enjoy!

What do you think?  As always comments are welcome.

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Earned Value for software development projects is not a myth

I was minding my own business this morning, installing software on my home computer, when I decided to do my email.  There was an email from PMI-ISSIG about the ISSIG Review 2010 Vol. XIV No. 1.  One article that got my attention was “The Myth of Earned Value! (for Software Development Projects)” by Richard Fox.  I’m not including a link because it is copyrighted material and anyway I think the article is plain wrong.

You have to read most of the article before you get to the meat of the matter; basically, Mr. Fox states that EV and software development don’t mix because (my order so it makes sense to me):

• Software project have imprecise requirements. So, you don’t know what you want to achieve?
• Sotware projects are harder to estimate and it is harder to get an accurate progress report from a developer. Never worked construction, have you? This is not a software development exclusive.
• Until the software tests successfully we don’t know that we are done. Well then, claim nothing before then and then claim 100%.  Better yet, have clearly defined milestones with clearly defined deliverables and clearly defined %complete associated to them.

Add these 3 to this quote from the article:

The magnitude of trying to decide how much of the work of many software development activities has been completed may be best expressed by an old method of estimating the “ETC.” This is the 95% rule - “It takes “95% of the estimated schedule/cost to complete 95% of the work and ANOTHER 95% TO Finish it!”

Is it any wonder he claims EV and software development don't mix?  You could also guess who I’d be nominating for the CHAOS award this year…  For those who want to learn something about EV go to Glen Alleman’s blog, Herding Cats and type EV in the search box.

What do you think?  As always comments are welcome.

Connect with me on LinkedIn.  I am a LinkedIn Open Networker (LION); you can use “Friend” to add me to your network, please mention the blog in your request.