Tuesday, 02 March 2010 23:00

Managing Complex Projects that are Too Large, Too Long and Too Costly

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ManagingComplexProjects1In an earlier article in the Complex Project Management (CPM) series, we introduced the topic and discussed CPM trends. We also presented the new, validated project complexity model. The model consists of nine complexity dimensions that may (and often do) exist on highly complex projects and programs. In this and subsequent articles we will discuss each complexity dimension in detail.

This article considers the unique complexities of large, long-duration, high-cost projects that pose challenges to project success, and offers both old and new management strategies to handle the complexities. Refer to Table 1: Size/Time/Cost Complexity Profile to examine the nature of these project characteristics as the size/time/cost dimensions increase.

Complexity Dimensions Project Profile
Independent Project Moderately Complex Project Highly Complex Project Highly Complex Program
“Megaproject”

Size/Time/Cost

Size: 3–4 members
Time: < 3 months
Cost: < $250K
Size: 5–10 members
Time: 3–6 months
Cost: $250–$1M
Size: > 10 members
Time: 6 – 12 months
Cost: > $1M
Size: Multiple diverse teams
Time: Multi-year
Cost: Multiple Millions

Table 1: Size/Time/Cost Complexity Profile

What Makes Large, Long, High-Cost Projects Complex?

Of the various elements that combine to make long-duration projects complex, the most significant is the inevitable changes that will occur in the business environment, which will necessitate adjustments to virtually all elements of the project. Knowing this, the successful project leadership team evolves, practicing situational project leadership, adapting and modifying their approach to accommodate the inevitable changes. In addition to adapting to change, the sheer size of the work involved for large projects weighs heavy on the project team. Research has demonstrated that the smaller the project team and the fewer deliverables, the greater the likelihood of project success. Therefore, the project leadership teams need to reduce the size of work packages to "seem like" many small projects, as opposed to one very large endeavor. As a final point, team fatigue and burnout lead to complex human interactions and unavoidable staff turnover, both of which are difficult to predict and manage.

Managing the Complexities of Large, Long, High-Cost Projects

The complexities of large projects require that particular attention be directed to planning the project, developing and delivering the solution, selecting team members, and sustaining a high-performing team over the long haul.

Planning the Project

Six important strategies for planning and structuring large, long, high-cost projects are offered, both conventional and adaptive in nature:

  1. Adaptive management approaches complement traditional practices
  2. Progressive elaboration allows the project to evolve
  3. A systematic, reliable approach to estimating increases confidence and accuracy
  4. Rigorous time and cost management increases reliability
  5. Stage-gate management enables continuous improvement
  6. Rigorous risk management pre-empts challenges and seizes new opportunities

1. Adaptive Management Approaches Complement Traditional Practices

For large projects, the ability to adapt is the difference between success and failure. The leadership team should analyze the situation, correctly answering questions like: Is this really a program? Is it a series of modestly scoped, small projects? Must the project or program deliver a product line, a system of systems? Can the solution be delivered in components? Only after this analysis should management decisions be made. In particular for long-duration projects, success depends on selecting the management approach best suited to deal with the changes that will inevitably occur. The team strives to recognize the nature of the problem and solution, and to understand whether the conventional, reductionist systems/software engineering and project management approaches will work effectively. Only then can we make the right choice of management approaches (e.g., conventional vs. adaptive techniques, appropriate project cycles, the best project team structure). It is also prudent to build continuous customer and end-user evaluation and feedback into the approach to ensure that the project delivers what is needed-which often is not what was originally proposed for large, long-duration projects.[i]

2. Progressive elaboration allows the project to evolve and the solution to emerge

Continuously improve and add detail to the project approach as more information becomes available. Allow more accurate and complete plans to emerge from the successive iterations of the planning process. Instead of trying to plan the entire project, start by scheduling only the activities that define firm basic requirements.[ii] Then, begin to plan activities to develop a conceptual design of the solution at a high level, resisting design decisions that will impose constraints.

3. A systematic, reliable approach to estimating increases confidence and accuracy

Estimating is hard, very hard. One precondition to being assigned as manager of a complex project should be a track record of developing reliable estimates. To increase reliability, use multiple estimating techniques. Educate your project sponsor and other key stakeholders about the fallibility of estimates in general and discuss the reliability they can expect from your specific estimates at key points in the project. Without a doubt, early estimates will be highly unreliable, exhibiting a wide range of variability. Numerous uncertainties are involved when building something unique with a team that has not worked together in the past. However, once the project has executed through a few iterations (if using incremental techniques) or through a few project phases (if using linear techniques), you can begin to gauge the speed of progress and adjust your original estimates accordingly.

4. Rigorous time and cost management increases reliability

Delivering on schedule is one of the main challenges for a long-duration project, simply because of the enormous amount of work to be accomplished. Implement a rigorous process for tracking progress and controlling output. Track progress to the next milestone or release scrupulously. Manage the schedule and budget by establishing a project support team to update and maintain the schedule and budget baselines; emphasize to team members that they should bring any issues that put the next milestone/release in jeopardy to your attention immediately.

5. Stage-gate management enables continuous improvement

Stage-gate management can be used to create opportunities to gather feedback from your customers and your team members on a frequent basis. After completing each phase, iteration, or release, conduct informal team-based quality reviews of deliverables. As part of these reviews, determine what worked well and identify opportunities for improvement to the solution development process and team operations. Subsequently, conduct a formal external quality assurance review of major deliverables and incorporate actions to correct defects found in the deliverables that must be resolved before work can proceed. Update the project cost, schedule, and scope baselines for the remaining near-term project phases/iterations, incorporating lessons learned into the plans. As part of the review process, examine the business case to validate that business benefits will be achieved and the investment is still sound. Conduct a formal project review with the project sponsor and other key stakeholders to secure approval to formally launch and expend funds for the next phase/iteration.

6. Rigorous risk management pre-empts challenges and seizes new opportunities

Few projects perform adequate risk management. For large, long-duration projects, it is essential to identify risks after each iteration/phase and re-examine risk responses to:

  • Ensure the risk response plans are managing known risks
  • Identify new risks and develop risk response plans
  • Identify new project dependencies and interrelationships and develop dependency management plans
  • Identify previously unknown opportunities to increase the business value of the solution

Developing and Delivering the Solution

Five important strategies, both conventional and adaptive, to deliver the solution on large, long, high-cost projects are presented:

  1. Iteration is the best defense against uncertainty
  2. Scope minimization is the key to success
  3. Last responsible moment decision making keeps your options open
  4. Rapid application development reduces time to market
  5. Lean development techniques increase efficiencies

1. Iteration is the best defense against uncertainty

"Projects should always be managed by rapid learning cycles because what we are doing is so complex that nobody knows the answer to begin with."
-T. Gilb, software engineer and author

Research has repeatedly demonstrated that short-duration projects are more likely to be successful than prolonged endeavors.[iii] Oftentimes business transformation projects involve a mix of complex development efforts, such as business process reengineering, legacy IT system replacement, and the creation of new, innovative business practices that rely heavily on technology. To increase the probability of project success, structure your project into multiple deployments of small solution components rather than taking the "big bang" implementation approach. As you develop and deliver the solution in increments, incorporate lessons learned from each increment into the next iteration and constantly test for alignment with business objectives.

The Standish Group Recipe for Project Success (Table 2) asserts that "success is practically in the oven" when a project follows this recipe. Standish reports that it is prudent to reduce the amount of resources to no more than four people, for no longer than four months, at a cost of less than $500,000. For large, long-duration projects, the only way to get the resources down to this level is to structure the effort into a program comprising multiple projects and to use incremental/iterative solution development.

Ingredients Clear business objective; minimized scope (microprojects with rigorous configuration management); constant communication and collaboration; proven, standard, stable software infrastructure (vs. custom code); firm basic requirements; formal methodology; reliable estimates
Mix with Full-time, co-located core team members (experienced business analyst, project manager, business visionary, architects, and developers) coached by an involved executive project sponsor, involved stakeholders, an iterative development process, and effective decision-making tools (requirements tools, project management tools, design/analysis tools, and modeling tools)
Bake No longer than six months; no more than six people; at no more than $750,000 (1999)
No longer than four months; no more than four people; at no more than $500,000 (2001)

Table 2: Standish Group Recipe for Success, 2001

2. Scope minimization is the key to success

The motto of 21st century projects is: "Barely sufficient is enough to move on." The more features and functions, the larger the project; as we have discovered, less is more. Initially, deliver a minimum viable subset of the full solution to start adding value for the organization as early as possible. Then, continue to deliver components of the system in short-interval deployments. Limit the dependencies between solution components to reduce the cost of changes. Design the solution to be flexible and agile to allow the customer to respond to changes in the business need, technology, or market conditions. End the project when the return on investment in additional increments is marginalized.

3. Last responsible moment decision making keeps your options open

Flexibility comes from delaying design decisions and the start of major activities for key project drivers (information flows, technical decisions, and business decisions) until the last responsible moment; that is, the latest moment possible without compromising cost or schedule. This "keep your options open" approach allows for maximum flexibility.[iv]

4. Rapid application development reduces time to market

If requirements are understood and scope is contained, rapid application development (RAD) allows for a greatly abbreviated timeline. RAD is a method of fielding multiple design/build/test/deliver teams to work concurrently. This component-based approach permits incremental testing and defect repair, significantly reducing risk compared to single, comprehensive delivery. Caution: RAD can be costly if (1) requirements aren't well-defined, causing a high risk of requirements defects, or (2) the design is not sound, with a minimal number of well-understood dependencies between increments, which can create a high risk of integration and maintenance issues.

5. Lean development techniques increase efficiencies

Even though the project is long and complex, do not be tempted to apply more rigor than necessary. Produce documents and conduct meetings only if they add value to the project. Continually verify that the project is building the minimum viable solution. Keep in mind the motto: "Barely sufficient is enough to move on."

Selecting Team Members and Maintaining Team Health

For complex, long-duration projects, we offer three suggestions for maintaining team health:

  1. Select team members for the long haul
  2. Attention to team health pays dividends
  3. Share resources to give team members a break in the action

1. Select team members for the long haul

When selecting team members for a long-duration project, keep in mind the special personality traits and coping skills that are needed. Prolonged forced interaction is simply not for everyone. For key positions, select team member who are resilient against social burnout and psychological stress.

2. Attention to team health pays dividends

Longer projects require that attention be directed to the physical and emotional stresses on the project team members. Focusing on the health of the team, making strategic personnel changes at critical junctures to infuse new blood, and providing appropriate team leadership will go a long way in sustaining the team.

3. Share resources to give team members a break in the action

On long-duration projects, critical resources may not always be fully engaged. When this is the case, "lend" them out to a short-duration effort to give the team members a break, allow them to feel the gratification of completing a task or meeting an objective, and then bring them back to your project refreshed and ready to dive back in.

Managing large, long-duration projects
Complexities Management Approaches
  • Too volatile: constant change in:
    • Business goals
    • Competitors
    • Global economy
    • Partnerships and alliances
    • Stakeholders
    • Project boundaries
    • Business objectives
    • Scope
    • Dependencies
    • Interrelationships
  • Too big: the size makes the project unmanageable, unable to identify dependencies and relationships
  • Too long: team fatigue set in, leading to unpredictable human behaviors
Adaptive
  • Adopt the appropriate project cycle and PM practices for the situation
  • Minimize scope
  • Delay design decision until the last responsible moment
  • Use incremental development
  • Use progressive elaboration and rolling wave planning
  • Establish a systematic estimating process using multiple estimating methods
  • Pay close attention to team composition and health.
  • Use lean techniques
  • Use RAD development to increase velocity for well-understood components
Conventional
  • Perform rigorous time and cost management
  • Use stage-gate management
  • Conduct continuous risk management
  • Use a systematic approach to develop reliable estimates

Table 3: Approaches for Managing Large, Long, High-Cost Projects

[i] Linda Vandergriff, Complex Venture Acquisition, 2006. Complexity Conference White Paper.
[ii] The Standish Group International, Inc. Extreme Chaos, 2001.
[iii] ibid.
[iv] Robert Lane, Vincent C. Lepardo, Graham Woodman, How to Deal with Dynamic Complexity on Large, Long Projects. Online at http://www.pbworld.com/library/technical_papers/pdf/32_HowtoDealwithDynamicComplexity.pdf, accessed January 2008), p. 5.

This article was adapted with permission from Managing Complex Projects, A New Model, by Kathleen B. Hass. ©2009 by Management Concepts, Inc. All rights reserved. www.managementconcepts.com/pubs.

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Kathleen Hass is the president of Kathleen Hass and Associates, Inc., a consulting practice specializing in the business analysis, project management, and strategy execution. Ms. Hass is a prominent presenter at industry conferences, author and lecturer. Her expertise includes IT strategic planning, implementing and managing PMOs and BACOEs, facilitating portfolio management, leading technology and software-intensive projects, executive coaching, building and leading strategic project teams, and managing large complex programs. Ms. Hass has over 25 years experience providing professional services to Federal agencies, the intelligence community, and various Fortune 500 companies. Certification include: SEI CMMI appraiser, Baldrige National Quality Program examiner, Zenger-Miller facilitator, and Project Management Institute Project Management Professional. Ms. Hass serves as Director at Large International Institute of Business Analysis. She has authored numerous white papers and articles on leading edge PM/BA practices, the renowned series entitled, Business Analysis Essential Library, a compilation of six titles on critical BA practices. Her book, Complex Project Management, A New Model, was selected to receive the 2009 PMI David I. Cleland Project Management Literature Award to honor the best project management literature published in the last calendar year. Kathleen Hass, PMP, Senior Practice Consultant, can be reached at303.663.8655 Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.kathleenhass.com.

Read 22962 times Last modified on Wednesday, 03 March 2010 10:25

Comments  

0 # SanDallahs 2010-06-29 08:08
Another impressive write-up.
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+1 # Raj sharma 2011-10-18 09:40
hi, the article is very very nice and important as well for all upcoming project mangers...And it also help me .. suggestion is just keep on uploading such kind of articles and blogs...and try to make your website as first ten website in google..
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0 # Joe Dokes 2012-06-03 19:59
Please clarify complex means multiple billions (with a "B" as in boy).
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0 # Les Oliver 2012-07-12 14:21
Although a usefull framework it doesn't quite hit the button for me. Whilst the largely systematic approaches set out are almost unquestionably effective for small, medium and large projects (large does not equate to complex in all cases), I feel for complex projects the lack of a systemic analysis is a significant shortfall in the framework/model presented. I think the most significant indicator of this in the piece presented is it's almost total lack of recognition of the multiple stakeholder dimension that is common in complex projects. I may however of misinterpreted something.
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0 # Ramkumar Ojha 2012-11-22 00:14
The iterative apporach makes a sensible choice to avoid uncertainities identified at begninning. I believe and have been following a milestone planning process as a good approach to this method. Plannning milstones is much more easier than detailing extent at start of the project. "Focus" is always the key in managing such complex and long projects. We are still evolving on milestone planning approach.
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0 # H M Thakur 2012-12-13 06:18
Hi!
The article is quite good and covers the major points and areas of attention so as to stay focused. However, one point which needs little elaboration is how does the volatile environment change the business objectives within a span of year or two.. (listed under Too volatile - Constant Change in ..). To my understanding, the projects are undertaken to meet the business objectives and in fact the projects which do not meet the business objectives are killed at the review gates. Would appreciate little more clarity on this point..
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0 # Lineo 2013-04-07 09:30
Managing Complex Projects that are Too Large, Too Long and Too Costly
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0 # ATKO 2013-07-12 23:29
Righ!!!
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