MANAGING RISK OF DELAY – Forecasting and Management (Part 12)

This post is the twelfth in a series of discussions regarding various aspects of time management as it relates to the risk of delay.  This post addresses the managerial aspects of forecasting related to time management.

Planning for and implementing (time-related as opposed to cost-related) forecasting is, perhaps, one of the most important aspects of Time Management and, consequently, Managing Risk of Delay.  As with progress assessment, timely (early) detection of trends (positive and negative) allows timely managerial action.  Timeliness of action has a heavy influence over the effectiveness of Time Management.  In project work, it is imperative that one finds problems quickly and fixes these problems rapidly.  In order to implement timely action, professional and realistic time forecasting is required.

The challenge associated with managing time is intensified in the case of larger and more complex projects as well as fast-track and high technology projects.

In order to professionally manage time (and, therefore, risk of delay) the manager must have a time baseline [typically a Critical Path Method schedule and a Performance Measurement Baseline – please see earlier posts on these topics] and a method to recognize variations from the baseline.  In order to detect variances, the managerial team must have an effective process to update the schedule (or time model) including a meaningful forecast of anticipated future performance.

As a project/construction/contracts/business manager and similar, it is imperative that you define your project execution approach as it relates to schedule updates and time-related forecasting.  The “water-shed” or uses of the information are enormous.

Use of forecasts for crafting a “politically correct” message can be counterproductive.  Further, it diminishes the value of this important managerial tool.

In this discussion, I will use two key references:

Under the heading As a Forecasting Tool, Murray Woolf observes and advises:

“Using the Execution Schedule as a forecasting tool to routinely predict project outcomes is very popular.  Information derived from Execution Schedule Editions can be used to identify status and trends and then speculate on likely project completion or future work performance.” [p28]

The common and sophisticated method of forecasting time-related performance is through the use of CPM schedule updates.  The popular planning and scheduling software packages are very powerful and many publications and forums provide sound advice regarding forecasting.  Since the technical aspects of this subject are complicated, we will leave detailed discussion for a later post.

Updating and forecasting the critical and near-critical path work is a key managerial support function.  It is imperative that it be done professionally and consistent with the Project Management Plan.

The PMI Practice Standard covers SCHEDULE ANALYSIS AND FORECASTING in Chapter 3, pages 17-18.  The headings of this discussion are:

“Schedule Variance (Are we ahead of behind schedule?)

“Schedule Performance Index (How efficiently are we using time?)

“Time Estimate at Completion (When are we likely to finish work)?

Classic EVM uses cost as the resource for performance measurement.  However, other resources (e.g. Contract Value, Planned Man-Hours, and Subcontract Value) can be better choices.  This should be covered in the Project Management Plan.

Consider two simple examples:

  1. “Planning as incorporated in the CPM schedule relies on a certain trade achieving production at X units per man-day.  Actual performance on similar work shows production at .75X units per man-day [negative or worse performance].  While the project is on schedule at this update, what should the forecast reveal?”
  2. “During a particular portion of a project, the planned progress is 4% per month.  During the prior three reporting periods, the highest progress achieved is 3%.  The project is on schedule at this time.  What should the forecast reveal?”

In both cases, the forecast must consider prior performance and mitigation or recovery action may be indicated.

When M&M undertakes an assignment involving program/project development, planning and/or management, we integrate both critical path time management and Earned Value Management practices and procedures into project execution.  With this approach, the project management team can identify time management issues early and fix them quickly.  Mitigation of progress issues or events requires timely recognition (and notice, if required).  Recognition and notice are addressed in two prior posts.

Good luck and let us all attempt to approach the issue of Time-Management strategy with all the factors in an integrated manner (critical path progress, bulk progress or EVM, and productivity) relative to other related aspects of program and project execution planning.  In planning for these practices, consideration must be given to progress measurement, schedule updates, progress assessment and professional forecasts.

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