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Roland Vander Straeten CEO| ProjectContexts Inc Guelph, Ontario, Canada
Approximately 80% of our business is “design-build”, sometimes referred to as “turnkey” projects. Typically less than 20% of the project is delivered by internal labor, 80% or more by subcontractors / suppliers. To measure (or force) progress, we must rely on supplier reports (not necessarily reliable), meetings (shop visits etc.) that are not only expensive but also may need qualified personnel, and in some cases conditional terms of payment. Terms of payment however may be governed by financial considerations, not necessarily progress.
In such scenarios, how can EVM be made reliable?
What is the experience in the PMI community?
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Keith Novak Tukwila, Wa, United States
Jan 03, 2022 5:19 PM
Replying to Peter Rapin
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Sounds like risk management to me. Identify what could go wrong, determine possible impact and develop mitigating measures which, in this case, would include processes to gage progress. I say processes in the plural as different situations may require different responses. Sometimes we are looking for an all encompassing simple solution where one does not exist.
As noted in earlier comments, sometimes the mitigating measures reduce the risk of occurrence (contract changes) and sometimes the measures reduce the impact (earlier delivery dates).
There is a 3rd mitigation method at the project level: Limiting the number of suppliers in the exception group of little to no progress visibility.

If you can measure the progress of most suppliers, you may be able to accept a few issues and handle their occurrence by planning for surge capacity near the point of scheduled delivery. Those suppliers must be exceptions though (80/20 rule). If everyone sees that accepting issues is the norm, then everyone tries to move into the exceptions group, and the 80% become the problems at which point you run out of people to manage the inevitable wave of crisis management.

This is easier to manage top-down. A CEO can demand there will be no exceptions without explicit approval. It's harder to manage up and explain to the exec level that unless they maintain schedule discipline, everyone will expect a free pass and plan accordingly.

After all, if there is no accountability, who cares if you're on time?
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1 reply by Peter Rapin
Jan 03, 2022 8:04 PM
Peter Rapin
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As project managers we know that we can't monitor/manage/control 100%. I don't know what the appropriate ratio is and, as everything else, it depends. In my experience there is a direct relationship between the degree of project success and the ability to minimize the "flying blind" component - a managed/flying blind ratio of 80/20 has a significantly higher success rate then a 60/40. That being said, it is most likely ineffective to try and achieve 99/01. It should be looked at in terms of tolerance.

I digress a bit here but I've had numerous chats with senior management as to the role of the PM. In my mind the job is to maximize the probability of successful project delivery by managing risk. A big part of managing risk is minimizing the flying blind factor.

In your scenario the only one left without a free pass and retains all responsibility is the PM.
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Peter Rapin Subject Matter Expect; Project Delivery| Independent Consultant Ontario, Canada
Jan 03, 2022 6:20 PM
Replying to Keith Novak
...
There is a 3rd mitigation method at the project level: Limiting the number of suppliers in the exception group of little to no progress visibility.

If you can measure the progress of most suppliers, you may be able to accept a few issues and handle their occurrence by planning for surge capacity near the point of scheduled delivery. Those suppliers must be exceptions though (80/20 rule). If everyone sees that accepting issues is the norm, then everyone tries to move into the exceptions group, and the 80% become the problems at which point you run out of people to manage the inevitable wave of crisis management.

This is easier to manage top-down. A CEO can demand there will be no exceptions without explicit approval. It's harder to manage up and explain to the exec level that unless they maintain schedule discipline, everyone will expect a free pass and plan accordingly.

After all, if there is no accountability, who cares if you're on time?
As project managers we know that we can't monitor/manage/control 100%. I don't know what the appropriate ratio is and, as everything else, it depends. In my experience there is a direct relationship between the degree of project success and the ability to minimize the "flying blind" component - a managed/flying blind ratio of 80/20 has a significantly higher success rate then a 60/40. That being said, it is most likely ineffective to try and achieve 99/01. It should be looked at in terms of tolerance.

I digress a bit here but I've had numerous chats with senior management as to the role of the PM. In my mind the job is to maximize the probability of successful project delivery by managing risk. A big part of managing risk is minimizing the flying blind factor.

In your scenario the only one left without a free pass and retains all responsibility is the PM.
avatar
Roland Vander Straeten CEO| ProjectContexts Inc Guelph, Ontario, Canada
I have to reflect on another recent thread here on Project Central: https://www.projectmanagement.com/discussi...in-the-project- started by Jorge Paz last comment Dec 27
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