# Category Archives: Project Controls

All project controls including EVM and Scheduling

## CPI Stability Myth

As part of an on-going project to publish a history of EVM (target August 2022) I’m reviewing a lot of resources accumulated over a number of years. One of the first outputs is an update to our paper The CPI Stability Myth – this review and update draws on a number of new resources to show where the research is applicable, where the 20% stability myth does not apply.

## CPM Anomalies Invalidate Monte Carlo

A couple of weeks ago I posted on some of the anomalies in CPM logic that will cause unexpected results: CPM Scheduling – the logical way to error #1. A comment on the post by Santosh Bhat started me thinking about the effect of these logical constructs on risk analysis.

The various arrangement of activities and links shown in CPM Scheduling – the logical way to error #1 (with the addition of a few more non-controlling links) follow all of the scheduling rules tested by DCMA and other assessments. The problem is when you change the duration of a critical activity, there is either no effect or the reverse effect on the overall schedule duration.

In this example, the change in the overall project duration is the exact opposite of the change in the duration of Activity B (read the previous post for a more detailed explanation).  For this discussion, it is sufficient to know that an increase of 2 weeks in the duration of ‘B’ results in a reduction of the overall project duration of 2 weeks (and vice-versa).

The effect these anomalies on the voracity of a Monte Carlo analysis is significant. The essence of Monte Carlo is to analyze a schedule 100s of times using different activity durations selected from a pre-determined range that represents the uncertainty associated with each of the identified risks in a schedule. If the risk event occurs, or is more serious, the affected activity duration in increased appropriately (see more on Monte Carlo).

In addition to calculating the probability of completing by any particular date, most Monte Carlo tools also generate tornado charts showing the comparative significance of each risk included in the analysis and its effect on the overall calculation.  For example, listing the risks that have the strongest correlation between the event occurring and the project being delayed.

Tornado charts help the project’s management to focus on mitigating the most significant risks.

When a risk is associated with an activity that causes on of the anomalies outlined in CPM Scheduling – the logical way to error #1 the consequence is a reduction in the accuracy of the overall probability assessments, and more importantly to reduce the significance of the risk in tornado charts. The outcome of the anomalous modelling is to challenge the fundamental basis of Monte Carlo. There are more examples of similar logical inconsistencies, that will devalue Monte Carlo analysis, included in Section 3.5 of Easy CPM.

Easy CPM is designed for schedulers that know how to operate the tools efficiently, and are looking to lift their skills to the next level. The book is available for preview, purchase (price \$35), and immediate download, from: https://mosaicprojects.com.au/shop-easy-cpm.php

## BIM in Australia is years behind the world

The successful introduction of Building Information Modelling (BIM) is a multi-year program that requires national government leadership and a road map. All aspects of the construction / engineering industry and its supply chain need to be working to the same standards so that information is exchangeable, and compatible. There is also a massive education and culture change needed to transition an industry from a historical culture of competitiveness and combativeness to one focused on efficiency, collaboration and mutual benefit.

A recent report by the Federal Government has suggested it may be a good idea for government agencies to move to a ‘digital be default’ mode of working, which was essentially the same position as was held in 2017.  Five yeas later, no real change, and \$billions in potential savings that could have funded a lot more work continues to be wasted.

For more click through to our published article BIM in Australia: https://mosaicprojects.com.au/Mag_Articles/AA017_BIM_in_Australia.pdf

## CPM Scheduling – the logical way to error #1

Section 3.5 of Easy CPM looks at some of the logical scheduling errors that are easy to introduce into a schedule, and that for the most part will not show up in the automated checking tools applying test such as the DCMA 14 point assessment (see more on the DCMA assessment at: https://mosaicprojects.com.au/WhitePapers/WP1088_DCMA-14-Point.pdf)

The naming convention used below is borrowed from Miklos Hajdu.  In all cases the links shown in the diagram are the controlling links, in a ‘live’ schedule there are likely to be many other links as well.

Reverse Critical

In this logical configuration, the change in the overall project duration is the opposite of any change in the activity duration.

A reduction of 1-day in the duration of activity B will lengthen the project duration by one day, an increase of 1-day will reduce the project duration by one day.

Neutral Critical Open ends (dangles) have the effect of isolating the activity duration from the schedule. The project duration is unaffected by either a 1-day decrease, or a 1-day increase in the duration of activity B. There are two variants, SS and FF:

In both cases it does not matter what change is made to activity B, there is no change in the overall duration of the project.  This is one of the primary reasons almost every scheduling standard requires a link from a predecessor into the start of every activity and a link from the end of the activity to a successor, however, even with other links in place, if the control is through either of the scenarios above, the result is still the same.

Bi-critical Activities

Finally, for this post, any change in the duration of activity B will cause the project duration to increase.

A 1-day reduction of the duration of activity B will lengthen the project duration by one day, and an increase of 1-day will also lengthen the project duration by one day.  Bi-critical activities depend on having a balanced ladder where all of the links and activities are critical in the baseline schedule. Increasing the duration of B pushes the completion of C through the FF link. Reducing the duration of B pulls the SS link back to a later time and therefore delays the start of C.  The same effect will occur if the ladder is unbalanced or there is some float across the whole ladder, it is just not as obvious and may not flow through to a delay depending on the float values and the extent of the change.

Easy CPM

There are more examples of similar logical inconsistencies included in Section 3.5 of Easy CPM. Easy CPM is designed for schedulers that know how to operate the tools efficiently, and are looking to lift their skills to the next level. The book is available for preview, purchase (price \$35), and immediate download, from: https://mosaicprojects.com.au/shop-easy-cpm.php

## It’s a wrap! Over \$15,000 donated to UNICEF

Project Managers 4 The World, Charity Event on April 27 & 28, 2022: 24 hours talk around the clock in support of children and families from Ukraine is over.  The event was a great success thanks to Patric Eid, Oliver F. Lehmann, and a panel of 24 speakers from around the world:  https://charity-conference.com/speaker-list-april-27-2022/

I am proud to have been a part of this unique, 100% volunteer event.

My presentation was: Governing and Leading Projects using Earned Value Management (EVM). Good management and good governance require good information. When implemented effectively EVM is a robust, practical system focused on assessing and supporting the managers of a project. Based on the framework in ISO 21508, this presentation will provide an overview of the 11 steps needed to implement EVM effectively.

There’s no fee or registration to download the paper, but please take a minute and donate to UNICEF’s work with children in Ukraine:  https://www.unicef.org/emergencies/war-ukraine-pose-immediate-threat-children

## Project Management in the time of COVID

The first in a series of five papers by Dr. Lynda Bourne, commissioned by PM World Journal, has been uploaded to the Mosaic website.

Uncertainty – Is it time to rethink? considers what uncertainty might mean post-pandemic. Through a discussion of the concept of a Zone of Uncertainty, the paper considers how the current heightened awareness of uncertainty and unknown unknowns can contribute to more effective risk management practice, and how the introduction of the concepts of resilience, persistence, and adaptability may assist individuals, groups, and organizations to recover, review and reform their practices.

PM World Journal is a free monthly project management journal, see more at: https://pmworldjournal.com/

## Practical EVM

Introducing Earned Value Management (EVM) into an organization needs a staged approach. There is a need for new tools, new processes, and a management culture change to make use of the new information.  Implemented properly, EVM is far more than a simple ‘add-on’ to either the scheduling tool or the cost management tools. Both of these systems are still needed, to support the added value created by a practical Earned Value Management System (EVMS). An effective EVMS is a performance management system designed to assess and assist the performance of the project’s management team.

Our latest article Practical EVM, looks at using the Easy EVM Workbook as a low cost, practical stepping stone on the journey towards creating the management culture and systems needed to take advantage of a fully-featured EVM software tool.

See more on Earned Value Management: https://mosaicprojects.com.au/PMKI-SCH-040.php

## Murphy’s Law is not an excuse, it is a call to action!

To apply Murphy’s Law proactively, you need to think through everything before you start work and ask yourself if this part fails, does the system still work?  This article looks at the historical origins of Murphy’s Law and how to use the concept to avoid problems.

For more on risk management see: https://mosaicprojects.com.au/PMKI-PBK-045.php#General

## The Origins of Cost Engineering

The latest paper in our series on the origins of project controls has been published in the March edition of Project Management World Journal.

This paper traces the origins of accounting, through cost accounting, to cost engineering. Download the full paper from: https://mosaicprojects.com.au/PMKI-ZSY-020.php#Process1

This is the part of a series of papers looking at the origins of the structures underpinning Earned Value Management (EVM):

1. The History of Scheduling (these papers are stand-alone, but the schedule is a key support to EVM)
2. The Origins of WBS & Management Charts
3. The Origins of Cost Engineering
4. The Origins of EVM (full update planned for mid-year)

As always, we are happy to receive feedback and additional information to help improve this history resource which is freely available to everyone: https://mosaicprojects.com.au/PMKI-ZSY.php

## Sizing EVM Work Packages

Following on from my last post EVM – Six things’ people don’t get! I’m seeing far too many examples of EVM systems that are set up to fail, either because the people doing the work think the WBS should reflect the project chart of accounts or the WBS should be part of the schedule. Both are a recipe for failure! However, like most people with a good understanding of EVM, and almost all of the books, in the first article I did not explain why this is the case.

Correcting this omission is the focus of my latest article EVM – Sizing Work Packages.  This article shows why the basic requirement for a work package are that is it big enough to have a manager appointed with the authority to manage the full scope of the work (cost, time, quality, etc), and that it will be open long enough to allow management control to be exercised.

The example I used in Sizing Work Packages was a theoretical \$15 million, 10-month project to design and construct a rail bridge.  The schedule for this size of project would likely be in the region of 100 to 200+ activities (maybe more).  While the project cost controls would likely contain around 50 to 150+ line items. In both of these controls tools this level of detail is needed for effective control. However, for the same project, an effective EVM system needs around 10 work packages laid out in a block diagram they would cover:

These ten work packages are of a sensible size, they are likely to align with a typical management structure, summary activities in the project schedule and the project cost system. Assuming the data transfer from these other systems is robust, the work packages are capable of being rigorously assessed and controlled using standard EVM metrics in a straightforward spreadsheet.

For more on Sizing Work Packages and pragmatic EVM, see Mosaic’s EVM and ES webpage: https://mosaicprojects.com.au/PMKI-SCH-040.php