On Throwing Henrietta Into The Flames

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Modelling Business Decisions and their Consequences

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In the 1954 movie Around The World In 80 Days, protagonist Phineas Fogg has embarked on a steamer from New York towards Europe and the final leg of his epic voyage, but there’s (yet another) problem: the steamer Henrietta doesn’t have enough fuel on board to complete the voyage at the speed that Fogg needs to maintain. Fogg’s solution is brilliant: once the coal is exhausted, he offers to purchase the ship, and then dismantles it en route to feed the boilers. He has the crew remove any piece or part that falls under the following criterion:

  • It’s flammable,
  • It does not add to the vessel’s seaworthiness,
  • Nor does it have anything to do with its propulsion system.

As it turns out, the ship’s figurehead, a wooden statue of a woman (who’s apparently been nicknamed “Henrietta”) qualifies, and is detached for feeding into the furnaces, leading the ship’s first mate (played to perfection by Andy Divine) lamenting “Not Henrietta!”

Meanwhile, Back In The Project Management World…

GTIM Nation members may not be engaged in a massive bet to circumnavigate the globe on a schedule more aggressive than thought possible for the current state of transportation, but there are many parallels to what we do to the movie Around the World in 80 Days, and to this scene in particular. Consider what you would do if, say, as the head of your organization’s Project Management Office (PMO), a PM comes to you and asks for help in setting up her Project Management Information System (PMIS), for a moderate-sized, high-profile project, but with two caveats: she needs her cost/schedule measurement systems set up very quickly, but doesn’t have very much budget set aside for that part of the work. Referring back to my “quality, availability, affordability, pick any two” axiom, she is communicating that she needs a system that fulfills the latter two. What’s your implementation strategy going to be?

I believe that it’s rather self-evident that a basic Earned Value System must be set up first. After all, even a crude EVM can deliver critical cost AND schedule performance information with a minimum of cost or time. Assuming a functioning Work Breakdown Structure is available, and our friends the accountants have agreed to set up the General Ledger to accumulate actual costs based on the reporting level of said WBS, the only other pieces of data needed to make the EVM functional and effective are the total budget for each of the tasks at the reporting level of the WBS, and an estimate of the percent complete for those tasks as of the end of each of the reporting periods. Work Package and Control Account Managers tend to be very busy, but a simple percent complete figure for their work is probably the easiest thing they have to do each month.

Next up, if time and budget is available, would be the data needed to set up a Critical Path network. This requires the additional data points of Work Package (or the activities that make up the WP) duration, plus which other activities need to be completed prior to the initiation of the one(s) being captured. With these durations and schedule logic links, a Critical Path network can be established, which can predict the project’s duration as well as pinpoint which activities have float, and to what extent. Piggy-backing off of the percent complete figures already being made available for the Earned Value part of the system, the CPM-based schedule can also provide accurate and reliable projections for project duration.

As far as I’m concerned, these are the basics. They have the added advantage of being fairly easy and inexpensive to create and maintain, and pass along the most crucial information elements needed for successful Project Management: how the project is performing in cost and schedule space. But what about all of those other management information streams that the experts maintain must also be set up, like risk analysis, or bottoms-up Estimates at Completion (EAC)? Well, let’s take a look at those, shall we?

As I’ve noted in previous blogs, a calculated EAC is both more accurate and far easier to generate than the so-called bottoms-up variety, which entails re-estimating the remaining work, and adding that figure on to the cumulative actual costs. Re-estimating the remaining budget – essentially, recreating the cost baseline (and turning the previous one to rubber) – requires professional estimators, using off-the-shelf software, in order to approach a 15% accuracy rate. Conversely, almost anybody who has graduated 4th grade can divide the cumulative percent complete into the cumulative actuals, which consistently returns a 10% accuracy rate.

Then we have my favorite foils, the risk managers. To perform a risk analysis worthy of the name, the following data points must be collected, almost always from the very Work Package Managers you need actually performing scope:

  • Alternative scope scenarios to the ones in the existing cost and schedule baselines (yes, you read that right: a proper risk analysis can’t even begin without already-established scope, cost, and schedule baselines),
  • The odds of each of those scenarios coming about (inevitably, speculation, or out-and-out guesses),
  • The cost impact of each scenario (again, you’ll need professional estimators with COTS estimating software to approach 15% accuracy),
  • …and the duration impact of each scenario.

After your risk analysts have collected all of this data, and have either chewed on it themselves or loaded it into some other software to crunch, what does it return? A list of things that the PM should be worried about, expressed in Gaussian jargon. That’s it.

Meanwhile, Back On Board The S.S. Henrietta…

So, we’re looking over this fine ship, and realizing we won’t get to on-time, on-budget delivery without shedding a lot of extraneous weight not-truly-needed features from the PMO function. Do I have to say it? The bottoms-up EAC-insisters and the risk management crew require much data (which can only really be supplied by the WP and Control Account Managers), take a lot of time and money, and ultimately deliver either irrelevant information, or else inaccuracies, while the correct answers can be derived much more quickly and cheaply. The which-parts-of-the-PMO-information-stream -needs-to-go decision becomes rather easy.

Throw that figurehead into the flames. And don’t think twice.

Posted on: June 10, 2019 10:53 PM | Permalink

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