Project Management

PMO Tips: Is dynamic scheduling a key business skill?

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Dynamic (adj) / continuously moving or changing.
 

What is the mission of a PMO? What is the mission of your PMO? What should the mission of a PMO be? Well, there is no one right answer. And as always, the answer lies in what is right for you and not so much what is categorically right. But, more and more PMOs are expanding their vision and mission beyond the traditional views and approaches of the PMO as a department and stepping up their leadership position and value they deliver to others within the entire company. After all, project management is a skill that all business professionals, not only benefit from but in many cases, require. Hence, forward thinking PMOs are increasingly seeking to introduce and establish project management as an enterprise wide core competence and skillset.

For example, take Dynamic Scheduling. All PMPs and every formal project manager knows what dynamic scheduling is, the benefits of dynamic scheduling, how to do it, and how to use at least one if not several tools to create and manage a dynamic schedule. Many people create schedules in Microsoft Project. Their schedule consists of a Work Breakdown Structure, tasks to accomplish the Work Breakdown Structure, descriptions of deliverables, estimates of task duration, dependencies between the tasks, and advanced practitioners would also include cost and resource information. The schedules can be presented in a number of ways and are commonly presented as Gantt Charts with taskbars in a timescale. But the important thing is that the way the schedule is entered determines if the schedule is rigid or dynamic. That is, if you enter fixed dates for your tasks, you will end up with a rigid schedule.

 

Schedule Examples

Now, odds are, that if you are reading this blog, you know the difference between a rigid schedule (simple ad hoc task list) and a dynamic schedule as shown in the figure to the left. And you know the problems inherit with rigid schedules and how difficult they are to effectively use and keep up to date. But, do you think the average, occasional, informal project manager in your company that has one after another project effort to manage and deliver, say a marketing executive or a sales executive, knows? They don’t.

We can debate whether or not the PMO has a responsibility to ensure that the non-PMO projects are undertaken with some degree of skill and project integrity or that such informal project managers have a place to go within the company to get what they need to manage and deliver their project via appropriate and perhaps limited techniques rather than simply via ad hoc best efforts.

A dynamic schedule is not just a fashionable term. Nor is a schedule dynamic just because it was created in a scheduling tool like Microsoft Project. Finding the dependencies between the tasks and entering them into your schedule takes a considerable effort. So, a legitimate question therefore can be raised: Is dynamic scheduling worth it? And, what is wrong with that static task list and rigid project schedule?

Well, if your project is just a handful of tasks tasks, then maybe your ad hoc rigid schedule is just fine. But if your project effort has more than a handful of tasks, say thirty, fifty, or one hundred, then you can expect many changes to occur. And, every time a change happens, you need to change your schedule to reflect the new business reality. If you have a static model, you will need to review all future tasks and make changes to all of their dates. If you have a dynamic model, you don’t need to make nearly as many changes. If you did a good job on task dependencies, you probably don’t even need to review the future tasks since you can rely almost blindly on the dependencies to adjust their dates appropriately and automatically.

 

We could talk about the expected time management gains from using Dynamic Schedules and why even occasional and informal project managers should take the time to learn this technique. I have even seen well reasoned approximations to quantity how much time you can actually gain by applying the principle of dynamic scheduling and how much time you have to invest in order to make the schedule dynamic. I have to admit, I skimmed through the detailed analysis and skipped to the conclusions which stated that the expected gains from applying the principle of dynamic scheduling are a savings of fifty-six hours of project management time per each project of one hundred tasks.

But, to me, that is the wrong way to go about it. The value of Dynamic Scheduling verses ad hoc rigid scheduling to the occasional or informal project manager isn’t time savings, but rather risk management. Take the ubiquitous multi-million dollar sales projects that enterprise sales executives and account managers manage each and every day. They call it pipeline management and this has nothing to do with oil in Alaska. These multi-millions dollar sales can take months, even years to close, implement, and revenue recognize. And within the sales cycle, there is very much a prescribed process that all sales professionals follow. And, every CRM tool has the ability to list these pipeline opportunities and add sales and marketing tasks to the opportunity. Some are even aligned to the de facto standard Miller Heiman Sales and Marketing approach and their Blue Sheets for strategic selling of complex enterprise systems. But are the tasks and timelines that are created by these CRM tools dynamic? Of course not.

Now, who cares? What is the big deal over the fact that virtual every formal project, even a three month software development or IT project, would be scheduled dynamically and with some degree of integrity while at the same time outside of the PMO a nine month multi-million dollar sales opportunity would be managed, from a project schedule point of view, via ad hoc best efforts and static task lists. Well, your CEO and your shareholders care, because when your sales executives and account managers fail to deliver these kinds of deals on time, there can be and almost always is serious problems such as not being able to recognize revenue or worse, not being able to meet quarterly earnings commitments.

Let’s take a real life example. I won’t mention that company name, but the story is not unique to them anyway. A few years back, a highly respectable, and publicly traded, enterprise software firm forecasted their quarterly revenues based upon a number of inputs such as the sales pipeline, consulting services contracts, and annuity revenues from maintenance and support. Of all of the inputs, the sales pipeline carried the most risk. Some of the pipeline came from low end product sales and trials, you know the twenty-five thousand dollar pops here and there, but most of the pipeline consisted of the few and very large enterprise deals such as a one or two million dollar enterprise license. Well, the sales executives and sales VP managed the pipeline somewhat ad hoc and by the seat of their pants. This was fine in the old days when the company was merely a division of a large corporation. But now, after being spun off, and as a stand-alone publicly traded company, the stakes were much higher and much more visible.

Let me fast forward and get right to the point, the sales VP forecasted one of these mega deals by the seat of his pants and toward the end of the quarter it became clear that this deal just wouldn’t be able to close in time. So, at the quarter end, the sales VP had good news and bad news. The good news was that the customer was totally committed to the deal and that it was, as they sale in sales, good business. The bad news was that the transaction would slip and could only be revenue recognized in the next quarter resulting in a miss of the current quarter revenue and earnings forecast. In the previous days when the company was just a division of a large corporation, this would be no big deal and would provide no cause for concern. The champagne would just need to sit on the ice a little longer. But now, as a publicly traded company, there was cause for concern as missing quarterly forecasts doesn’t sit well with the institutional investors and market pundits.

After the dust had settled, this multi-million dollar mega deal that was more than a nine month project effort of significant and complex proportions closed ten days late, it slipped from one fiscal quarter to the next, and it resulted in the quarterly revenues and earnings of the company being missed. Within twenty-four hours of the quarterly earnings release which disclosed the miss in revenue and earnings, the stock price of the company fell from 83 to 42. The resulting loss in the company’s market evaluation was more than one and a half billion dollars. All, on account of a project that finished a few days late.

In conclusion, would dynamic scheduling have prevented this tragedy? Maybe, maybe not. We will never know. But what we do know is that one after another significant project effort, albeit informal and outside the official project portfolio of the PMO, are being managed ad hoc and by the seat of someone’s pants from a scheduling and overall project integrity point of view. And, that the ability to manage such projects better via techniques like Dynamic Scheduling is not and should not be a secret or special technique to be known and held exclusively and used by only the formal and certified PMP brethren, rather Dynamic Scheduling is a key business skill. There are those advocate making the use of Dynamic Scheduling commonplace, not just by your formal project managers in your PMO, but by anyone and everyone in the enterprise that has a project effort of value to deliver.

Is Dynamic Scheduling a key business skill? Maybe the answer isn't so much of a yes or no, but that it can be.

Posted on: February 13, 2008 01:49 PM | Permalink

Comments (1)

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Dear Mark
Interesting reflection: Should the schedule be rigid or dynamic?
Thanks for sharing

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