Are You Sure About That 8.333%?

 

Since this will most likely be my last blog of 2020, and this past year has been, shall we say, less than optimal for goal, aspiration, and dream fulfillment, I think I’ll forgo any type of retrospective and focus instead on a certain quirk of PM cost/schedule performance systems used for projects funded on a Fiscal Year basis. Multi-year government projects are almost always in this category, as well as many funded by large organizations or institutions. A common problem with this type of work is that its Control Account or Work Package managers tend to want to avoid participating in Earned Value or Critical Path Methodology-based performance measurement systems, often times offering up the bromide that their work is “Level of Effort,” and therefore unsuitable for performance measurement. Yeah, dopey, but it happens all the time.

A common response from we PM-types when we hear this silliness is to point out the number of deliverables or measurable milestones associated with the work in question, thereby advancing the notion that the CA/WP could (and should) indicate its performance using one of the more discrete methods of assessing status. In my experience, the most common riposte to this challenge is to point to the fact that the CA/WP in question is estimated and re-estimated at the beginning of each Fiscal Year by projecting how much will be spent by the organizations that make up the members of the Project Team, which sort of points to the strange notion that the Projects exist to bring in funding to the organization, rather than the organization(s) existing in order to actually perform work. Again, dopey, but common. Due to this take on the relationship between Project and Asset Management, the assertion that the FY-funded work ought to be measured via a discrete method of collecting status almost never works.

So, what’s the PM needing a way of knowing project performance (other than sitting back and watching the actual costs go by) to do? One solution that I’ve discovered is remarkably simple – so simple, in fact, that it’s often derided by Earned Value or Critical Path purists as invalid. However, I can attest to its efficacy, returning usable cost/schedule performance information relatively quickly. The solution? Agree with them that it’s all Level of Effort, but with one small tweak: when the month-end status pull happens, ask the Control Account Managers if they are sure about that 8.333% figure.

See, 1/12^th is 8.333%, and if the project is being funded by Fiscal Year, then the LOE Control Accounts would nominally be 8.333% more complete each month. Explain to the CAMs that you know that they want to report progress based on LOE (where the Earned Value figure is set to match the cumulative budget amount), but they could really help out the PM if they could include some adjustments. Are you getting things done relatively quickly? Perhaps you could add a few points onto the status pull, and claim 8.5%, or even 9%. Conversely, if some snags have developed, maybe we could reduce the nominal claim down to 8.2%, or even just an additional 8% this month. I know it sounds miniscule, but I can show why it works using the Game Theorist’s favorite tool, the payoff grid:

As you can see, the only potentially bad outcome for the CAM is scenario #3, and yet even here the small tweak you are asking of the LOE Control Account Manager won’t strike them as raising unnecessarily provocative red flags. The tweaked amount is in tenths of a single percentage point, for pity’s sake. How massively alarming could that possibly be? And yet, tracking the cumulative Schedule Performance Index that is suddenly not anchored to 1.0000 yields its own highly relevant information stream, particularly when combined with a more accurate Cost Performance Index. If nothing else, the PM can narrow the internally-held Variance Analysis Thresholds, knowing that the proffered variances are most likely to be understated. The cost/schedule performance system has new life, and the PMs in charge of Fiscal Year-funded work finally have the coveted disaster early-warning system, the lack of which produces a seemingly never-ending stretch of sleepless nights.

And all because someone asked the question, “Are you sure about that 8.333% complete figure?”