Projects are dynamics and change overtime
Projects are dynamics and change overtime. This means we need to conduct a project review to understand the situation of the project. The project review evaluates the past performance and predicts for the future one.
There are many tools, which can be used to understand the situation of the project. These tools have graphical capabilities but few have the capability to perform "What If" Scenarios.
A project review means an evaluation of the past performance and prediction for the future performance.
There are many indicators, which help a project manager to assess the situation of the project, some of these are- Schedule, Budget, Percent Complete, Quality, human factor.
If problems arise during the life of the project and it becomes out of schedule or budget overruns, there may be some parameters that may be used to adjust the project and get it back on track, some of which are, resources, productivity.
It is a tool of strategic management initially developed by Kaplan on 1992, adopted, and espoused in the Harvard Business Review 1996. This tool translates vision and strategy into goals and objectives. It considers four important perspectives:-
- Financial perspectives, which include meeting profit targets in the private sector, and efficiency and effectiveness goals in the public sector. In this prospective, the Project Manager sets up the financial targets as a plan and compares it with the actual to see the financial situation of the project to ascertain as if it is succeeding financially according to the financial data collected.
- Customer/Client perspectives; including customer satisfaction with quality, delivery and service. Here the Project Manager considers the expectations of the customer or client for the product or service. These expectations include quality standards, prices, delivery conditions, etc.
- Business processes - are the key business processes where the organisation must excel to produce its goods or services to meet profit, service objectives and satisfy customers. These processes should take into consideration the above-mentioned perspectives, to meet financial and the customer targets.
- Learning and growth, includes the quality of information systems, and the degree of alignment of staff with organisational goals. This work is a feedback loop between what is happening and what should happen.
The four perspectives of the scorecard permit a balance between short and long-term objectives, between outcomes desired and the performance drivers of those outcomes
The Evaluation Criteria derived from the perspectives are
- Financial Constraints
Budget plan and actual
- Time Constraints
Planned dates and actual
- Human Factor
Planned staff needed to perform business processes
- Risk analysis
Comparing planes with actuals and directing to corrective actions
Earned Value Weakness
- It alerts the project manager that there are schedule or budget problems without directing him towards a mindset of evaluating the problems. EV does not, however, assist a manger to move to the next level of analysis, which is to develop strategies to overcome problems. It does not give the project manager the ability and flexibility to apply or simulate scenarios to see how these affect project performance.
- EV uses past facts to predict the future performance of any project. This is always happened by assessing past performance and relying past facts or measurements to predict the future. Nevertheless, the prediction process depends on the number of events on which the predictions rely. This is more accurate if additional events are used in the prediction.
- EV ignores two critical success factors (human and risk analysis factors), human factor is the staff or personnel. WBS, which is the EV infrastructure, does not include human factor. It includes, work scheduled, work performed, scheduled budget, actual cost. Risk analysis is the analysis of the project future as what are the possibilities of risk arising? In addition, what are the different available alternatives to overcome these risks?
- EV does not consider quality factor (rework) in its calculations and measurements. The amount of rework needed depends on the experience of the staff and quality standards.
The main aim of the research is to develop a Generic System Dynamics Model to assist a project manager in carrying out an effective project review. This model enables a project manager to track and control the project in terms of schedule, budget, and quality. It facilitates "What If" capability that eases project control actions in terms of schedule, budget and rework.
System Dynamics model and quality
Quality is represented by the review fraction in the model. The review fraction inversely proportion with the staff level of experience. Review fraction means the percentage of defects in the work performed when the project review is conducted.
System dynamic model and human factor
Human factor is clear in the model. It is the project staff. This factor is important, as it is the first option the project manager think of it when the project faces a schedule and budget overrun. To overcome schedule overrun is by adding or hiring more staff to accelerate the project performance or increase their productivity the same is for budget overrun is thinking of hiring less experience staff.
System dynamic model and risk analysis.
The project manager could use the model to perform risk analysis proactively depending on the possibilities of the values of SPI and CPI.
If SPI is greater than one or less than one then there is poor planning situation because greater than one means PV is too small which means poor planning and smaller than one means Large PV and this means poor planning.
If SPI is slightly smaller than one then there is a possibility to increase the EV by two ways by adding more staff or increasing the productivity.
IF CPI is slightly less than one then there, is two options either increasing EV or reducing AC.
Increasing EV is by either adding more staff or increasing productivity.
Reducing AC is by hiring less experienced staff or seeking different alternative for material and equipment resources.
Using System dynamics model as training tool
The model could be used as a training tool to train managers how to spot schedule, budget problems, and seek different solutions using the model simulation.
The System Dynamic Model is a solution directed model.
It enables the project manager to track and control the project in terms of schedule, budget and quality because the model structure reflects the main parts of the project. It distinguishes the types of work and resources and makes it easy for the project manager to trace and confine problems.
Example: simulating each type of work and resources individually will reveal the budget and schedule problems and helps to setup solution for each problem.
Using the Model as a Project Review Tool
The system dynamics model will help the sponsors who are looking for a much better insight into the progress of their projects from both a cost and schedule standpoint. Particularly as it would prevent them from having any nasty surprises from contractors making sudden demands for more money and time without any prior warning that the project was deteriorating. This model is also suitable to run a successful project review for the following benefits: -
- Human resources are clear in this model. They are distinguished and divided into different staffing profiles according to the work performed, i.e. management work, engineering work, etc.
- Work to be done, work performed and work outstanding are clear. As the work outstanding is important to determine ETC and EAC for both cost and schedule.
- The quality is evident in the model. When the project review is conducted, the work performed is scrutinised and inspected against quality standards. The work defects are returned for rework and the perfect work is used to calculate the planned value, earned value which are used later to portray the actual situation of the project.
The actual cost in the model is not limited to the labour rate and includes other types of resource such as material and equipment. The model encompasses the important parameters, which affect behaviour.
- An early warning of deterioration in the project creates an opportunity to implement corrective action before it is too late. (SPI, CPI)
- Accurate forecasting allows better decisions to be made about the course of the project. (Estimate date to Complete, Estimate Budget at Completion).
- An open and verifiable view of progress in the project improves sponsor confidence. (Percent Complete, Percent Spent).
Why is system dynamics not other language?
System Dynamics helps understanding the behaviour of the project and how the different factors in the project affect each other by offering different tools as behaviour over time graph, causal loops and stock and flow diagrams.
Why is ithink used as a software modeling?
- Ithink is very well known as it is easy to learn and user friendly.
- Its help features are extremely well done.
- Ithink makes " conveyor stocks" easy to use
- There are almost the required functions to use in the model as IF ELSE, Time function
- Ithink models are able to integrate with applications build with .NET or databases.
Using past to predict for the future is problematic but using system dynamics will allow us to use more events to get prediction that is more accurate. System dynamics has time function, therefore, events can be used a daily, weekly or monthly basis. The behavior of available is more accurate when used more events.
At the end of the project, EV should not exceed PV
If EV> PV then there is a planning problem.
System dynamics model has the power of prediction and the final cost at the end of the project will be the estimated at completion and the Time estimated to complete is when the project accomplished its work and this is clear from the simulation when simulating EV, PV and AC or the work to be done.
1- The project should be fully defined with goals and final product and date.
2- The scope should be defined in details showing the resources, work, and budget as the case study.