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Perk Up for PERT

Everything old it seems is new again. One of the earliest programmatic approaches to project scheduling was invented in the heyday of the Cold War. Propelled by inter service rivalries on one side and by the threat of Soviets in the arms race on the other, PERT was born. The Program Evaluation & Review Technique looked beyond a simple Critical Path Methodology (CPM) analysis to introduce the notion of risk into the project schedule. The method was tremendously successful. It was used on the Polaris missile project in the late 50s and early 60s and was credited with enabling the first test launch only 18 months after the start of the project.

The PERT method asks the scheduler to provide three data points for each activity rather than one. Each activity has a best-guess duration but also an optimistic and pessimistic duration as well. The idea is to start by doing the schedule based on only the optimistic, then only the best guess and then finally only the pessimistic durations. As the project progresses and actuals replace the optimistic, best guess and pessimistic durations, the range of risk at project completion decreases.

Why should this matter? Well, if you’re looking at the schedule for any significant-sized project and the result of that schedule says something like “We’ll be done with this project in 2 years, 3 months 6 days and 4 hours, everyone knows that’s a lie. The more likely scenario is that you will be able to estimate within a couple of months yet that’s not how we talk about the schedule. It we had followed the PERT method, we’d have gotten the easiest schedule range from just adding up the optimistic, pessimistic and best guess durations to be able to add “Our most optimistic projection is 2 years and 12 days and our most pessimistic projection is 3 years, 6 months and 4 days”

A range like that may not be what management wants to hear. We know what the reaction from management is likely to be: “You will finish the schedule then based on the most optimistic projection!” But, if you introduce this kind of analysis into every schedule, then you reveal several things straight away. First of all, is the scheduler an optimist (like the one above) or a pessimist? This isn’t trivial. It’s a terribly important thing to know. Also important is the increased credibility of giving a range of dates. It says to the reader that you’ve considered things that could happen to this project (both good and bad) and have given your best possible answer.

For those who spend time in such an analysis, it is also interesting to keep track of the progression of the range. Think about it like this. The day before the last day of the project, the range of possible finish dates is probably very narrow. “We’ll finish tomorrow or maybe the next day,” you might say. On the first day of the project, you would expect the widest range because we have the most number of tasks, which still have optimistic and pessimistic numbers that we’re considering. It’s logical then to expect that the two endpoints (the optimistic and pessimistic) will migrate towards each other as the project progresses. That indicates a healthy advance.

If the endpoints start to move apart during the project, this indicates that we’ve introduced an element of risk into the project that wasn’t there when we started. The endpoints can only move apart when we either add tasks or re-assess the optimistic and pessimistic durations of the remaining work. That’s an easy-to-watch-for warning sign for management that should spark some kind of project review.

We seem to have come a long way since the Polaris missile project but, while PERT did find its fans, it never took off the way that we talk about CPM analysis. Only those esoteric schedulers in the Risk Analysis industry seemed to take any notice and they were working on other things. If you’re interested in schedule and budget risk then you’re probably talking more about statistics that come out of a Monte Carlo analysis, or something much more involved. (“What’s Monte Carlo analysis?” you ask. That’s a subject for another day but suffice to say that the result of such analyses are S-Curves, Bell Curves and probability statistics.)

We still see PERT analysis available in a wide range of project scheduling tools. Some vendors probably wonder why they’re still supporting something that hasn’t got a huge following.

PERT suffered in its popularity not because it was a bad technique (I think it’s a great technique) but because it takes more work. Remember, we’re talking about adding additional elements of data for every single task during the planning process. In some organizations it’s hard enough to get a single data point, never mind three. So given there was more work and no incentive for most project managers to implement the technique, it gradually fell from favor.

So? It’s ancient history right?

Wrong.

While enjoying a quick four-day visit to Sydney, Australia (I’m kidding of course, while I do love Australia, it’s impossible to fly the 26 hours there and the 26 hours back and enjoy only four days in between), I got to meet with and listen to some of the top project managers in the Defense Industry. I took great interest in the sessions on Risk Management, as it’s something I know something about and it’s not often talked about in those terms.

In Australia, defense projects (and other major capital projects) must comply with the AS4360 standard. This standard was first introduced down under in 1995 and thanks in part, I think, to a red-hot economy and a government committed to expanding its defense spending, the AS4360 standard took hold in a big way and has become a staple of large projects there. That might have been the end of this story except that the standard has done so well that there is now talk of the US adopting AS4360 for major capital projects. The Americans will not simply implement AS4360 of course, but those in the know say that the AS4360 promotes a “risk analysis lite” culture that will be quite acceptable to the Defense, Aerospace and Energy projects that should be implementing such techniques.

In particular, one of the components of AS4360 that we’ll likely see promoted is the notion of three-point estimates for schedules, and that is PERT.

As is the case with many project management techniques, if this kind of standard is adopted, it will likely result in the promotion of more risk analysis attention across the US and, ultimately, everywhere else.

If you’ve never done PERT analysis before, it’s almost certainly available to you. Try implementing it with any copy of Microsoft Project. Right click on your menu bar to reveal the PERT toolbar. It will show you how to enter your optimistic and pessimistic analyses and show you a view with the result of your three-point analysis. It’s a worthwhile exercise if you’ve not tried it before and, if you do, you’ll be ahead of the pack and have a taste of project management life from Down-Under.

G’day mate!


Chris Vandersluis is the founder and president of HMS Software based in Montreal, Canada. He has an economics degree from Montreal’s McGill University and over 22 years experience in the automation of project control systems. He is a long-standing member of both the Project Management Institute (PMI) and the American Association of Cost Engineers (AACE) and is the founder of the Montreal Chapter of the Microsoft Project Association. Mr. Vandersluis has been published in numerous publications including Fortune Magazine, Heavy Construction News, the Ivey Business Journal, PMI’s PMNetwork and Computing Canada. Mr. Vandersluis has been part of the Microsoft Enterprise Project Management Partner Advisory Council since 2003. He teaches Advanced Project Management at McGill University’s Executive Institute. He can be reached at [email protected]. This e-mail address is being protected from spam bots, you need JavaScript enabled to view it.

Why I Became a Project Manager

Andrew Miller’s Monthly Blog

These days there are so many attractive jobs out there that kids coming out of school have unlimited choices. Lawyers and doctors make good money; entrepreneurs have a lot of freedom; big companies offer lifetime employment…just a few generalizations. What does project management offer? All of the above!

Ladies and gentlemen, we are on a growing wave of need, a tsunami of project skills, if you will. Everybody wants project managers. Historically, project managers were limited to construction projects and IT implementations. Now, project managers are wanted for every initiative, no matter how large or small. Large companies are developing their own PM methodologies and setting up their own PMOs. Medium-sized companies are hiring professional PM contractors at a dizzying pace; governments are always looking for a good PM. Even small companies are looking to bring on PMs to manage operational teams.

What do we have that everybody wants? It is quite simple really…discipline. We have the discipline to follow processes; we have the discipline to communicate effectively; we have the discipline to budget someone else’s money effectively; we have the discipline to ensure that work gets done on time. Discipline is, indeed, a very valuable commodity.

Most companies do not have a lot of discipline. Spending is out of control; vendors control relationships; structures are slow and top-heavy, and people follow their own agendas. I bet there are few executives right now saying “boy, I wish this organization just had some discipline” (if you are saying that, please call me, I can help with that).

In summation, pick project management. You can make good money just like a lawyer or a doctor; you can have a lot of freedom just like an entrepreneur and you can have lifetime employment, just like working for a big company. It is kind of like professional Utopia, don’t ya think? Right?

is President of ACM Consulting Inc. (www.acmconsulting.ca), a company that provides supply chain and project management solutions. Andrew is PMP certified and has led a variety of clients through complex systems implementations and organizational changes. He is an Instructor of the Procurement and Contracting course, part of the Masters Certificate in Project Management program through the Schulich School of Business Executive Education Centre (SEEC) in Toronto. Andrew has an International MBA from the Schulich School of Business with majors in Logistics and Marketing. He can be reached at [email protected].


Andrew Miller

How to Start a Project Management Company without an IT Professional

Have you ever noticed that IT professionals are grumpy? I think that part of the reason is because they never get calls like this: “Hey IT professional, just calling to say that everything is working okay today and you’re great!”

The calls are typically more like this: “Hey IT professional, why is it that the only messages our spam filter prevents from getting through are our sales leads? Luckily, however, it does let all the Viagra ads through, which is good because it gives us something to read while we’re not selling anything. Did they have classes in spam filtering at the college you supposedly went to?”

Working in IT is somewhat like being a fireman. You can never respond to the fire fast enough, regardless of what you do. If I were starting a project management company today, I wouldn’t even buy a server. Rather, I would do everything with Software-as-a-Service, or SaaS (which means it is hosted online on someone else’s server). I would use a customer relationship management (CRM) tool like Salesforce, a contact management tool like Sugar, and an accounting application like Quickbooks Online Edition. I would also outsource my email and document storage.

In a nutshell, if I were starting a brand new project management company today, I would really try to have no servers at all, thereby avoiding the stale Linux/Windows debate. Without servers and their accompanying headaches, my IT professional could focus on serving our customers instead of building a bunch of technology infrastructure that is, at this point, redundant. IT professionals at project management consultancies have enough work to do without being constantly interrupted with projects such as installing a new network. These tasks can be accomplished elsewhere, which saves your IT professional time. And as we all know, time is money, especially in the project management world.

Not only that, but servers require updates, maintenance, backups and more backups, which, once again, translates into plenty of work. Very few companies, regardless of their size, do a good job with backups. Disks have grown faster than tapes have and this is causing a real problem: Where do we put all the data? Not only that, but all disk drives fail eventually. After 10 years in business, I’ve seen a number of disk drives tank, and it is never, ever convenient.

Consider this: if a tornado (or a disgruntled employee) obliterated all your servers right now, how long would it take you to get it all going again? How do you know the tapes will work? And where are they? Not in the same room as the servers, I hope. Did you know that tapes can sometimes be written to but not read from due to the technology of the tape drive and the error rate on the tape itself? Are those machines still for sale so you can buy replacements for the ones that were destroyed? Where would you get that copy of the operating system you were running? How many millions of patches from Microsoft did it have on it again? And how long will it take to install them?

But wait a minute. “What if a tornado destroys the SaaS site of my chosen vendor?” you ask. That’s a great question.

At my company, Journyx, we have hundreds of customers who run their business on our SaaS site. If we weren’t up and running, pretty much immediately after such an event, we would be out of business and I would be out of a job.

That frightening vision is very motivating to me. So much so that we have redundant hardware, lots of backups, tapes in a salt mine, multiple sites for data, etc. No one can do a better job of keeping our application up and running than we can.

“But what if someone nefarious and evil steals my data and gives it to my competitor?” you ask.

The bank has all of your data, and you aren’t worried about them giving it away. What’s the difference? What about the phone company? They know a lot about you. SaaS companies should be under the same constraints for protecting your company’s privacy as banks and telephone firms are. And so far, they all seem to be doing a fine job. For example, I’ve never heard of anyone swiping a competitor’s sales leads out of Salesforce.

If you’re starting a new project management company today, go SaaS. Get a laptop. An office at Starbucks. If your time, your data security, and your piece of mind are worth anything, it’s definitely cheaper.


Curt Finch is the CEO of Journyx (http://pr.journyx.com), a provider of Web-based software located in Austin, Texas, that tracks time and project accounting solutions to guide customers to per-person, per-project profitability. In 1997, Curt created the world’s first Internet-based timesheet application – the foundation for the current Journyx product offering. Curt is an avid speaker and author, and recently published All Your Money Won’t Another Minute Buy: Valuing Time as a Business Resource.

Let

Having been involved with project management over the last two decades, I have seen a great evolution in what is expected of a good project manager. The traditional measure of a great PM was one who could focus solely on the success of his or her project to the exclusion of all else. In the name of ‘focus’ (aka blinkers), we might have been allowed to ignore what was going on around us in the organization, be selfish in negotiating the best resources, use creative estimating skills to get a generous budget, zealously guard that ‘signed off’ scope document and cross the finish line on time and on budget!!

Not so any more (thank goodness!). How often have we tripped on a project that was on time and on budget but was not deemed to be successful? As organizations embrace the concept of projects being the most effective method of executing strategy, they are demanding more from their project managers. Much to many a project manager’s dismay, the success criteria for projects are no longer confined to a list of deliverables, meeting timelines and budgets. Measures of success now often include specific references to:

  • Customer satisfaction
  • Increased revenue
  • Decreased costs
  • Seamless transformations

Could it be that projects, and therefore project managers, are now being held accountable for business results?

What an exciting yet intimidating prospect!! The project manager of the past thrived only because there was a huge assumption that every project initiated was the right one, and ‘someone’ usually the project sponsor, would take care of the minor matter of actually delivering the results. The reality is, that in a competitive market place, the way many progressive organizations rely on project management practices has changed significantly. Some of the changes in organizational behaviour are:

  • Management of project portfolios
  • Movement from individual projects to programs tied to delivering business value
  • Recognition that business strategy needs to be flexible
  • More sophisticated measurement of results
  • Global risk management

Though even today an overwhelmingly large number of projects relate to technology and engineering, more and more organizations have recognized the value of applying project management to the full spectrum of their business. It is commonplace to have projects that bring about organizational development, business acquisition and mergers, product development and launch, business process re-engineering, and even strategy formulation and strategic planning.

This more demanding and complex environment, combined with growing demand for leaders to fill the void left by retiring ‘boomers’, provides project managers with an unbelievable opportunity. The time is right to change the role of a project manager from ‘technical implementer’ to ‘strategic enabler’.

Does this shift mean that the traditional strengths of sound project management principles are no longer valued? Quite the contrary. We do need to, however, go beyond applying the people, process and tools aspects of project management. So what can we do to meet the new expectations?

  • Find out as much as we can about the business strategy our project is aligned with and linked to. Ask questions till we are comfortable that we understand the specific business goals and the rationale behind them.
  • Make sure that all activities and deliverables in our project are able to support the strategy and business objectives most effectively.
  • Be innovative and persuasive if we think there is a better way to get to the desired outcome.
  • If our project is a part of a program or portfolio, have a clear and accurate understanding of the interdependencies with other projects within the program and the portfolio. Prepare for contingencies.
  • Be prepared to take the back seat and play second fiddle to a more important initiative – we don’t have to be primary to be critical to the organization’s success.
  • Show integrity. If our project is going to deliver the outcomes but not the business benefits, speak up.
  • In our plan, include organizational change management considerations, as typically benefits are realized within the business operations. Make sure mechanisms are in place to measure and monitor how effectively our project is contributing to business results after it’s completed.
  • Constantly assess the validity of the project in relation to business objectives, especially if it’s one of significant duration. The competitive landscape and, therefore strategies, change quickly. Be prepared to be flexible enough to change direction accordingly.

But first and foremost, let’ s take off our blinkers!


Ruchira Chatterjee, MA, PMP, is a senior consultant with SPM Group, www.spmgroup.ca. With over 20 years of direct project management experience, Ruchira has led a number of highly successful programs and projects both in IT and business areas. She recently successfully directed the transition of a facilities management outsourcing program for a client representing $400 million annual revenue. She was the program director on a $35 million program related to wealth management system implementation resulting from an acquisition. She managed a program to bring about the operational and technology transformation of a property casualty business division. On multiple occasions she has held accountability for projects to bring about organizational changes, start up new departments and implement new processes. She has also managed a variety of technology projects related to such areas as conversions, expert systems implementations, vendor systems selection and implementations.

With a M.A in Economics from Calcutta University, India, Ruchira has also completed a Company sponsored Executive Management training program at Kellogg, Northwest University. She is a Project Management Professional (PMP) as certified by the Project Management Institute (PMI). Ruchira can be reached at [email protected]

How

Editor’s Comments

In Let’s Take off Our Blinkers! Ruchira Chatterjee, uses an equestrian analogy to warn of the danger of too narrow a focus on the success of a particular project, to the exclusion of other corporate priorities. She points out that the success of a project can’t always be judged on the fact that it came in on time and on budget. She says that today’s project success criteria are much broader.

How to Start a Project Management Company without an IT Professional by Curt Finch addresses the idea of having a project management with no, or very few servers. His point is that by having the servers outside the company, the IT professionals within the company can focus on serving customers instead of worrying about solving internal IT problems.

Our bloggers are back with their take on the many issues that project managers have to face every day. Also, please take a look at our forums and give us your views on the important project management issues that our readers are discussing.

And, as always, we’d like to hear what you think of this issue and what you want to see in the future.