The Money Files

Discrete effort is the name given to the work required for an activity that can be planned, measured and ends up with something specific as the output. The effort involved directly links to the delivery of the thing you are creating.

There are four ways of measuring progress on a task that is managed with discrete effort. Even if this description of what discrete effort is doesn’t make much sense to you, you’ll start to realise what tasks are appropriate to be planned in this way when you see how you track them.

The four methods of measurement are:

• Percent complete (yes, that old favourite!)
• Fixed formula
• Weighted milestone
• Physical measurement.

Now you see how to measure the work on these tasks, can you think of some activities that use discrete effort on your schedule?

I have to confess to spending many years using percent complete before I ditched it: it’s not really suitable for business change projects where the output doesn’t easily break down on a percentage basis. On one project we used weighted milestones, as that aligned with the contract agreement for billing.

All the methods have their place.

In this article I’m going to look at the first two: percent complete and fixed formula, and then in the future post I’ll dig into the others.

Percent complete

Percent complete is exactly as the name suggests: the measure is an estimate of how much has been done in percentage terms, tracked at the end of each reporting period.

Ideally, it should be based on some kind of measurable thing instead of just a number that the team member has come up with. Have you ever been in a meeting where a task is reported at 90% complete for several weeks? I have. In the end, Chris and his 90% complete became a running joke. There was always something his team was working on that was 90% complete – but not quite ready to be signed off.

With percent complete, the planned value (PV) represents the time-phased resource needed to finish the work package. Earned value is then calculated by multiplying the percent complete by the budget at completion for the work package. In other words, you simply use the relevant percent complete for the budget. If the budget for a work package is £100, and the task is 60% complete, the EV is £63.

That makes it easy to work out.

The challenge with using percent complete is that it is not easy to work out. You need to do so in an objective way, and that kind of goes against the grain for many stakeholders, especially team members who haven’t worked in a disciplined EV way before. They might be used to providing very subjective guesses for percent complete, and that’s really not what you are going for here.

Often people use hours worked as a guide for percent complete, but again that’s not always 100% accurate. You could have worked half the time but the deliverable only be 20% complete. The remaining 80% will be achieved with the remaining work hours. So you do have to be a bit careful about how percent complete is implemented – this is why we document how performance will be measured so there is no ambiguity.

Fixed formula

The fixed formula method of progress tracking relies on there being a formula you can use (the clue is in the name). You assign a specific percentage of the budget value of the work package when the work begins. Then the rest of the budget (or time) is assigned when the work is completed.

For example:

A task starts. You assign it as 25% complete, in terms of budget and/or schedule. Then when the work is finished, the work package “earns” the remaining 75%.

You can do this as a 50/50 split or any other breakdown that works for you. Obviously, the total assigned to each milestone in the work package must equal 100%. You don’t have to limit yourself to an allocation at the beginning and then another at the end: if it makes sense to split the task into 5 and assign 20% of the value at each of those fixed points, then do that instead.

This is a good method for allocating value in environments using earned value management, or where you have to report progress at work package level but don’t have the data to track things hour by hour to give you an exact percent complete score.  It’s also a very easy method to use. Once you have your formula set up and your assignments clear, you can just get on with doing the work. The performance measurement will be pretty seamless, as long as you are confident work is progressing to plan. And there’s no cajooling the team into coming up with measures that are a few percentage point higher than last week just to prove something has been done in the last 5 days.

Good for: short duration tasks.

Remember that the percent complete assigned isn’t reflective of the actual work done or costs incured. Stakeholders need to understand the limitations of this method.

There is a variation of the fixed formula method which is 0/100 percent: in other words, the task doesn’t ‘earn’ anything until it’s done. There is no progress or performance measure assigned to it. The work is either fully complete or not done at all.

This is a good option to use for deliveries or where the deliverable is coming from a third party and being tracked outside of your project. For those tasks, the activity is either not finished, or done. For deliveries, for example, the materials are either on site or they aren’t. There isn’t much point in assigning progress when they are en route, as that doesn’t really get you any closer to the end goal.

Fixed formula is a flexible way to think about performance measurement in earned value settings, but it’s also helpful for projects that are not using EV.

Do you use percent complete or fixed formula? Or something else? In the next half of this article, I’ll talk about the other two methods: weighted milestones and physical measurement. See you then!

Pin for later reading

Over the last couple of months I’ve looked at some of the tech trends affecting us as project delivery professionals working in an online world.

One of the technical challenges I haven’t talked about yet of using collaboration tools is how you archive the data effectively. Archiving tools are available, but they are yet another system to integrate within your technology landscape. There’s nothing to say that their development will keep up with the constant evolution of the SaaS marketplace; in fact, I think it’s fair to say that they aren’t.

Forrester reports that only 15% of businesses actively capture and archive data from collaboration sites (Hayes & McKinnon, 2015). The old approaches to data management and records compliance just don’t cut it with new communication channels, even where interoperability makes it possible.

This problem is going to get worse before it gets better. Regulatory bodies will catch up with the increase in data being stored across collaboration tools and online and will demand that companies manage their archives more effectively.

Organizations will be forced to adopt more robust methods of managing archives with the associated cost of data management that comes with this. Archiving strategies need to be built in conjunction with the adoption of online tools and with flexibility in mind.

All the trends I’ve talked about – like AI, robotic processing automation and interoperability - bode well for both the manufacturers of project management software, and (one would hope) the people using them. Better data, better collaboration, and better end-to-end systems should increase the likelihood of success on projects because it all contributes to better decision making.

And I believe collaboration tools are already improving the results of teams where they are being used – I certainly see that in the conversations I have with my mentoring clients and the project managers I work with every day.

However, the great results we expect from tech will only come about if the tools being applied meet a genuine business need. You can’t layer tools into a broken, uncommunicative team and expect them to suddenly work together, just like that. The team culture has to be ready and open to change, the infrastructure has to be there, the management desire to want virtual and online working to succeed has to be there – and people have to see the benefit.

The business need that drives all of that is likely to overlap the areas of technology, collaboration, and culture. The way people work online—both in and outside the project environment—is not perfect, and we can expect to see more evolutions and innovations in the years to come, both in terms of tools and the way in which interactivity is encouraged and fostered.

I hope that we will eventually look back and realize that this was the time that organizations made the shift to the collaborative project environment. While the societal change may feel fast, in organizational terms, it is infiltrating slowly. Project leaders are essential in supporting innovation and effective collaboration in all its forms.

This article includes a few points that were made in my PMI book: Collaboration Tools for Project Managers. Given what we’ve been going through and seeing so far this year, it felt appropriate to try to pick out some comments on tech for teams and where that might be taking us – because it seems to me that virtual working is here to stay.