Technology, Schmechnology: Three Program-Saving PM Hacks

 

Since most (if not all) of the takes on technology in the PM universe are that it’s by and large a good thing, it falls to me (of course) to take the contrarian position. Consider the famous study that showed that, when time-saving devices and appliances were introduced into homes with electricity to run them, the amount of time housewives spent doing housework did not actually decrease. Instead, two influences kept them working at about the same pace: since cleaning rugs and clothes became easier, the expectation became that people’s rugs and clothes would be clean all the time, hence the act of cleaning carpets and clothes was more frequent. Also, since more coffee brewing, ironing, and cooking could be done within the same amount of time as before, more of that starting happening. The amount of work didn’t change, just the level of cleanliness and ready availability of unwrinkled shirts and full cups of coffee (prior to the establishment of specialty coffee shops on every city corner) did.

Meanwhile, Back In The Project Management World…

I’ve spent a lot of ink pixels grousing about irrelevant information streams that are being pushed by supposed expert-level PM associations and organizations, so I’ll give that theme a rest (for this week, anyway). But I will say that many of these “must-have” analyses would be more difficult if not for the ability of modern Critical Path Methodology (CPM) and Earned Value Methodology (EVM) software packages to share data with other systems, such as the organization’s general ledger (a rather valuable utility), and the risk management system (utterly useless). So, some of these technology advances are really useful, but not all of them. But what if the PM finds herself in a situation where such advanced CPM and EVM packages are not available, or in use, or even in a situation where (horrors!) there are no personal computers or tablets? Alternately, what if our PM is in a situation where these packages are available and in-use, but she suspects their information isn’t accurate? Like Montgomery Scott says in Star Trek III, “The more you overtake the plumbing, the easier it is to stop up the drain.” In addition to warp drive technology and, well, plumbing, the same effect can be seen in certain overly-teched Project Management Information Systems. What’s the PM to do in these circumstances?

Hack Number One: The Reliable Estimate at Completion

One of the most, if not THE most, valuable pieces of PM information that can be generated by an EVM system is the accurate answer to the question “At the present rate of performance, how much will this activity, task, or project cost when it’s done?” Springboarding off of Dave Christensen’s work on Cost Performance Index (CPI) stability[i], the fact of the matter is that an EAC that’s accurate to within ten points can be calculated (once the activity/task/project has cleared the 20% complete point) by dividing the Budget at Completion (BAC) by the CPI. The fascinating aspect of this (besides its underestimation by Establishment PMs) is the fact that the formula

EAC = (BAC / CPI)

can be algebraically reduced to

EAC = Cumulative Actual Costs / % complete.

Crazy, right? But it works, and reliably so. All you need is the cumulative actual costs from the general ledger, and a reasonable estimate of the activity’s/task’s/project’s percent complete, and you’re there. Not only is it gobsmackingly easier than all that bottoms-up nonsense, it’s also provably more accurate on a consistent basis.

Hack Number Two: The Reliable Duration at Completion

Earned Value and Critical Path methodologies are more closely related than many people realize. When you place your percent complete amount into the schedule network on your CPM software, it calculates a new forecast date using a formula identical to the one mentioned above, except it uses duration rather than costs. My regular readers know where I’m going with this: to calculate a duration estimate for any activity, task, or project, all you need to do is to divide the percent complete into cumulative duration, and your answer will be accurate to within ten points! In fact, for all those organizations using some form of milestone tracking system as a cheap substitute for a real schedule, stop asking the tasks’ owners for an estimate of when they will be done, and start asking them for their percent complete. Divide that number into the cumulative duration, and compare that date to their original scheduled completion date to tell if they will be early, on time, or late. Your accuracy rate will skyrocket.

Hack Number Three: Testing What You’re Being Told About At-Completion Costs

For those technically-advanced projects where they provide a new “bottoms-up” EAC on a regular basis, these estimates are usually highly optimistic. To test them, compare the Cost Performance Index to the To-Complete Performance Index (TCPI), which will always be available from the technically-advanced cost processors. The TCPI indicates how well the project must perform in cost space in order to come in under a given parameter, usually the Budget at Completion (BAC). However, if you substitute the stupid bottoms-up EAC for the BAC in the formula, and get a number above 1.00, then you probably have a problem. The aforementioned Dr. Christensen’s research found that the CPI virtually never varies more than ten points once the activity/task/project has passed the 20% complete point. Now compare the CPI and the TCPI. If it calls for a 10% improvement in performance, you are probably being fed an optimistic EAC. If a 15% performance improvement will be required to hit the bottoms-up EAC, that’s not going to happen. If the improvement called for is 20 points or more, the people pushing the bottoms-up EAC are not only lying to your face, they think you’ve dumb enough to believe them, which is problematic all by itself.

Can a PM survive a project with just these hacks? It depends on the project, but usually not. However, if your project team is completely stalled for want of readily available cups of coffee, and there are no coffee shops around, and you’re the only person who knows how to make hot coffee and assess project performance without an electronic device, you may just be in a position to rule the world.

[i] https://www.researchgate.net/publication/237574533_Cost_performance_index_stability_fact_or_fiction