infrastructure projects in russia.ppt - spider...

Infrastructure Projects in R iRussia

Vladimir Liberzon, PMPSpider Project TeamSpider Project Team

IntroductionIntroduction

• In this presentation we will discuss proven• In this presentation we will discuss proven tools and techniques that are applied to management of large‐scale infrastructure projects and programs in Russia

• The questions during the presentation are welcomed!welcomed!

Part 1Part 1

Large‐scale InfrastructureLarge scale Infrastructure Programs in RussiaPrograms in Russia

O r iOverview

Infrastructure Programs in RussiaInfrastructure Programs in Russia• Russia launched many large‐scale state• Russia launched many large‐scale state infrastructure projects last years.

• They include• They include– Development of Sochi region as Recreation Area and preparation of Winter Olympic Games 2014preparation of Winter Olympic Games 2014,

– Construction of trans‐Syberian highways,Construction of Dams and Power Plants around Russia– Construction of Dams and Power Plants around Russia,

– Development of Russian Pacific Area and preparation of Asia‐Pacific Summit in 2012of Asia Pacific Summit in 2012,

– Nuclear Power Plants Construction Program, etc.

Infrastructure Programs in RussiaInfrastructure Programs in Russia

• These programs have multi billion budgets involve• These programs have multi‐billion budgets, involve many organizations and include many inter‐related

j tprojects.

• Our company is involved in management of almost all of them. We participate as consultants, coaches and members of program management teams.p g g

• Management of such programs is very complex and we will discuss its organization and managementwe will discuss its organization and management approaches that proved their efficiency.

Sochi 2014S

Winter Olympic Games 2014Winter Olympic Games 2014• Preparation of Winter Olympic Games 2014 Program Preparation of Winter Olympic Games 2014 Program includes 213 construction projects.

• They includeThey include– Construction of Olympic objects like stadiums, arenas, tramplines, ski areas, etc.tramplines, ski areas, etc.

– Transportation infrastructure including roads, rail roads, airportp

– Utility infrastructure,– Energy infrastructure including Power Plants, electric gy g ,lines, gas pipelines

– Hospitality infrastructure including Olympic villages, hotels, parks and recreation areas,

Winter Olympic Games 2014Winter Olympic Games 2014

• Sochi Olympic Games will be held at two major areas:

• one of them is on‐shore cluster with Stadiums for ice hockey, figure skating, curling, and similar sportssports,

• Mountain cluster will be host for slalom, downhill, biathlonbiathlon

• These clusters will be connected by auto and rail roads through mountains Construction of thisroads through mountains. Construction of this roads includes six tunnels and eight bridges

Winter Olympic Games 2014Winter Olympic Games 2014

• Development of Sochi area will also include

• gas pipeline construction,

• creating of area transport infrastructure• creating of area transport infrastructure (widening of existing rail road,

• construction of roads on the shore and in the mountains)the mountains)

T S b iTrans-SyberianHighwaysg y

Trans-Syberian HighwaysTrans-Syberian Highways

• Only the railway connects Russian Pacific Area with the rest of Russia.

• The program launched now will connect all partsThe program launched now will connect all parts of Russia by modern highways.

• Road construction projects are simultaneously launched in Russian Pacific Area and in Siberia.


• In the Pacific Area the program includes following highway construction projects:following highway construction projects:

«Amur» Chita ‐ Khabarovsk 2097 km

«Kolyma» Yakutsk ‐Magadan 2021 km

M‐56 «Lena» Never ‐ Yakutsk 1157 km

M‐60 «Ussuri» Khabarovsk ‐ Vladivostok 756 km

«Vostok» Khabarovsk ‐ Nakhodka 824 km


• There are several dozens construction i th t b ild th dcompanies that build these roads.

• The program is managed by specially created p g g y p ystate owned management company.

Boguchansk DamBoguchansk Dam

Boguchansk Damg k

B h k D i th iddl f Sib i• Boguchansk Dam in the middle of Siberia on Angara river is one of the largest.

• Planned capacity is 3000 Mv

• Length exceeds 2 5 km• Length exceeds 2.5 km,

• Artificial lake will cover 2,326 km2

Development of Russian Pacific AreaDevelopment of Russian Pacific Area

• Russian Pacific Area Development Program has top priority.

• Russian Government invests huge money to develop this area that was always remote anddevelop this area that was always remote and unpopulated.

• This program will create a new face for Vladivostok, Russian Pacific Capital., p

• Two huge bridges over the ocean will be built.

Development of Russian Pacific Area

• Bridge to Russkiy Island:– Total Length ‐ 3100 m– Total Length ‐ 3100 m

– Central Part ‐ 1104 m

– Width of the road ‐ 23,8 m

– Pylon Height ‐ 320 m

– Height over sea ‐ 70 m

Other ProgramsOther Programs

• Russia plans to invest more $60bln in the construction of new Nuclear Power Plantsnew Nuclear Power Plants

• Russia plans to construct high speed railway between Moscow and St PeterbourgMoscow and St. Peterbourg

• Russia invests in the development of modern technologies (N t h l i i ti l )(Nano technologies in particular)

• Economic crisis somewhat slowed the development but major programs did not stopped.

Program ManagementProgram Management

• All large‐scale programs are managed by specially created management companies:created management companies:– Olimpstroy for Sochi 2014

– Far East Directorate for Pacific Development ProgramFar East Directorate for Pacific Development Program,

– Far East Road Construction Directorate,

– Atomenergoprom for Nuclear Power Plants Program– Atomenergoprom for Nuclear Power Plants Program,

– Etc.

• Management of Russian large scale programs is based• Management of Russian large‐scale programs is based on similar approaches that we will discuss in this presentationpresentation.

Part 2Part 2

Program, Portfolio g , fManagement System Management System

OrganizationOrganization

Program and Portfolio Management Requirements

To make Programs and Portfolios manageable there are certain requirements to all Program/Portfolioare certain requirements to all Program/Portfolio participants and projects that include:

Common methodology shall be used for scheduling,Common methodology shall be used for scheduling, budgeting, reporting and analyzing project data,The same or compatible PM software shall be used,pThe same WBS templates shall be applied to all projects in the program/portfolio,The same resource, cost, material dictionaries shall be used in all schedule models and reports,h d d h ll b dThe same production norms and unit costs shall be used for contracting and estimating project performance

Program Management OfficeProgram Management Office

• PMO is an organizational unit to centralize and coordinate the management of projects

d d h dunder its domain. This unit was created in every Program management organization.

d f (b f )• Main departments of PMO (by functions):– Methodology

l i– Analysis– Correspondence and Archives

P og m/Po tfolio M n gement– Program/Portfolio Management

PMO Methodology DepartmentPMO – Methodology Department

• Main functions of Methodology department:– Development and actualization of the Project p jManagement Guidelines and other Program management standards and requirements,g q ,

– Organization of Project staff training,

Consulting coaching auditing Program participants– Consulting, coaching, auditing Program participants

– Development and actualization of the organization k l d bknowledge base.

PMO Analysis DepartmentPMO – Analysis Department

• PMO Analysis department:– Develops and implements Program dictionaries and p p greference‐books for costs, resources, materials

– Develops project WBS and other templatesDevelops project WBS and other templates

– Helps project planners with creating project computer model project scheduling and budgetingcomputer model, project scheduling and budgeting, performance monitoring and reporting organization,

l d li d d f k i h– Develops and applies standards for group work with the Program files and data.

PMO Analysis DepartmentPMO – Analysis Department

• PMO Analysis department:– Develops and works with the Program computer p g pmodel,

– Regularly collects and analyzes actual dataRegularly collects and analyzes actual data,

– Manages Program computer models archives,

li j k h ld i h h f– Supplies project stakeholders with the performance reports and other necessary information,

– Maintains PMIS and data safety.

PMO Archive DepartmentPMO – Archive Department

• PMO Communication and Archive department:– Manages communications with program g p gstakeholders,

– Manages program archivesManages program archives,

– Creates and maintains the library of past projects archivesarchives.

PMO Program Management DepartmentPMO – Program Management Department

• PMO Program Management department functions:– Program Scheduling and Management,

Management of project priorities– Management of project priorities,

– Management of Program Risks,

– Dealing with conflicting and competing project requirements,

– Analysis of change requests and Integrated Change Controlg

PM Information SystemPM Information System

• Most large‐scale programs in Russia are managed using Spider Project software that is g g p jconsidered as most functional, powerful and flexible systemflexible system.

• Spider Project usage is required from all programs participants. It makes data consolidation and management easier and more reliable.

PM Information SystemPM Information System

• One of the reasons for selecting Spider Project as the program management tool is based on its ability to work with physical quantities (volumes) of work to be done on project activities.

• It helps to implement corporate norms like unit (physical) costs, unit material requirements, resource productivities (units per hour), etc.

• Spider Project permits to create program (corporate) p j p p g ( p )templates, dictionaries, and databases (reference‐books) that are necessary for proper program ) y p p p gmanagement.

Part 3Part 3

Program/Project Datag / j

Data requirementsData requirements

• The requirements to the data that are used for program planning and control may be divided into two main groups:– High level requirements based on program/portfolio management needs,

– Low level requirements that shall be applied to creating j t t d lproject computer models.

• High level requirements consider data organization,

• Low level requirements cover details and instructions on creating project computer models.

Organizing dataOrganizing data

• The same Project, Phase, Activity, Resource, Material, and Department coding structures are used in all projects,

• Resources that are used in all projects belong to the program (corporate) resource pool,

• Resources of the same type share the same esou ces o t e sa e type s a e t e sa echaracteristics (like cost, production rates, material consumption per work hour),p p ),


h f• Program management systems have specific requirements that are vital for successful

limplementation.

• It is necessary to be sure that:

• WBS structures that are used in different projects of the program are compatible,p g p ,

• Project costs have the same structure in all projects (same cost components are used)(same cost components are used),

• Cost accounts are the same in all projects,

Organizing data

f h h h

Organizing data

• Activities of the same type have the same characteristics in all projects (like unit cost, material

k l )requirements per work volume unit, etc.),

• Typical resource assignments have the same characteristics in all projects (like productivity, cost and material requirements),

• Typical (repeating) processes are modeled in the same way in all projects,y p j ,

• Project archives are kept and stored as required.


• These requirements are set on the Program level and are mandatory for all program participants.

• Templates, reference‐books, coding systems etc. areTemplates, reference books, coding systems etc. are developed in the Program Management Office.

Program Databases (Reference-Books)Program Databases (Reference Books)

• Activities, resources and resource assignments belong to the same type if they share the same characteristics like unit costs, material consumptions per work volume unit, productivity, etc.

• Program Management office creates Databases or Reference‐books that contain those parameters that shall be used for planning of all projects of the Program.

Program Databases (Reference-Books)Program Databases (Reference Books)

• Program Reference‐books include at least:– Activity cost and material requirements per volume unit for all activity types,

– Resource assignment cost and material requirements per volume unit for all assignment types,

– Resource assignment productivities for all assignment types,

– Resource assignment work loads for all assignment types.

Typical Fragment LibraryTypical Fragment Library

• Project fragments usually describe typical processes and technologies that are used more than once as small

j tprojects. • Creating project computer models using the library of t i l f t h l t id i i t i dtypical fragments helps to avoid inconsistencies and assures that the project model follows Program standardsstandards.

• A library of typical fragments is very important tool for the development of common culture and managementthe development of common culture and management standards.

Program TemplatesProgram Templates

• Program management has to be based on the program standards. These standards include not only estimates of the typical activity and assignment parameters process and but also project templates.

• Besides Program Management Guideline developed in the Program Management Office describes Program g g gmanagement routine (when and what reports shall be presented, performance review meetings schedule, etc.) p , p g , )and change management processes.

Organizing data• This slide shows WBS

Organizing data• This slide shows WBS template for construction projects required byprojects required by Program Management Office of OlimpstroyOffice of Olimpstroy.

Project Data StructureProject Data Structure

Th i l t f j t t d l• The main elements of any project computer model include:

– project activities,

– activity dependencies,

– resources and their assignments,

– calendars– calendars,

– Costs,

– Project, Work, Resource and Cost BreakdownStructures.

Project Data Structure

N ill di i l i t t

Project Data Structure

• Now we will discuss special requirements to project data that are necessary for most infrastructure projects.

• Some of these requirements are used in theSome of these requirements are used in the process of project schedules assessment.

Activity DataActivity Data• Usually project activities are characterized by their• Usually project activities are characterized by their duration or effort. But in most cases and especially in construction projects it is necessary to set activity’sconstruction projects it is necessary to set activity s physical volume (or quantity) of work.

A ti it l b d i t t t• Activity volume can be measured in meters, tons, etc., planned work hours, percents or any other units.

• Unlike activity duration, activity volume does not depend on assigned resources.

• Project performance reports always include actual volumes that were done on project activities.

Activity DataActivity Data

• By introducing activity volumes, we will be able to use Program/corporate databases that define:– cost and material requirements per activity volume unit for different activity types.

– Resource assignment productivity or production rate for different assignment types.

• Activity duration is calculated basing on activity volume and assigned resource productivities. PMBOK Guide call this method as Parametric Estimating of Acti itthis method as Parametric Estimating of Activity Duration.

Dependency DataDependency Data

M i f t t j t i l d li• Many infrastructure projects include linear construction (roads, railroads, pipelines, etc.). In such

j t t f k b d i ll lprojects many types of work can be done in parallel but on some distance between them. Such logical d d b d ib d St t t St t li kdependency may be described as Start to Start link with Volume Lag.

• But Start to Start link shall be supported by Finish to Finish link to prevent preceding activity “catching” succeeding activity. So it is necessary to set more than one link between activities and to check if Start to Start links are supported by Finish to Finish links.

Resource DataResource Data

• Resources are divided into two classes:

– renewable (human resources and mechanisms) and( )

– consumable (materials).

• It makes possible to assign materials to resources• It makes possible to assign materials to resources defining their consumption per resource work hour or work volume unitwork volume unit.

• Example: a car consumes gas.

Resource Data

d h d d l h d

Resource Data

• Besides the individual resources there is a need to set resource crews (we call them multi‐resources) and

kill ( l )resource skills (roles).

• Multi‐resources are the settled groups of resources working together.

• Multi‐resources can be assigned on activity execution. g y

• Assigning multi‐resource project planner assigns all resources that belong to this multi‐resourceresources that belong to this multi resource.

Resource Data

f d h k h h b l

Resource Data

• If resources can do the same work then they belong to the same Skill set or Resource Assignment Pools.

• Resources with the same skills are interchangeable though they may have different productivities performing the same activities.

• One resource can belong to many Skill sets.g y

• Example: excavators of different types that may be used on earth moving worksused on earth moving works.

Assignment DataAssignment Data

h h• Resource Assignments have their owncharacteristics including:

– Resource productivity on assignment,

– Assignment cost (may be fixed, per unit of workg ( y , pvolume, or per hour),

– Assignment material consumption (fixed perAssignment material consumption (fixed, perunit of volume, or per hour),

Resource workload (% or resource work time– Resource workload (% or resource work timethat is required on concrete assignment)

Assignment DataAssignment Data

l h• Assigning resources to activities implies the notionof a team ‐ a group of resources working on an

h h l d d d lactivity together. The team can include individualresources, multi‐resources and skills.

• If resources belong to different teams then theycan work independently of each other at differenttime. This is the way to simulate working indifferent shifts on the same activities.

Assignment Data

l h f

Assignment Data

• Resources can consume materials in the process of their work. Besides, materials can be assigned to

d lactivities or resource assignments directly. In some projects it is necessary to simulate not only material

i b l d i l fconsumption but also production or supply of resources and materials on activities and

iassignments.

CalendarsCalendars

• Separate calendars can be set for all activities, resources and time lags.

• Availability of all these calendars is important for the proper project performance simulation. p p p j p

Cost DataCost Data

ll h d f d• Usually it is not enough just to define activity and resource costs. It is necessary to know project

d h ll bexpenses and revenues, what will be spent on wages, on machinery and equipment, on taxes, etc.

i i i ll f l i lSometimes it is necessary to allow for multiple currencies. So there is a need to define and assign cost components.

• Cost Structure shall be the same in all projects belonging to the Program and is defined on the Program level.

Material Resource and Cost CentersMaterial, Resource and Cost Centers

h d d ff h• There is a need to get different reports on the groups of cost components, materials and resources. That is h d f l dwhy it is necessary to define Cost, Material and

Resource Centers:

• Material center can include any group of materials.

• Resource center can include any group of resources.y g p

• Cost center includes selected cost components.

• Using material resource cost centers permits to get• Using material, resource, cost centers permits to get group reports (all pipes, all workforce) and to manage parallel budgets (actual expenses contract costs etc )parallel budgets (actual expenses, contract costs, etc.).

Multiple WBSMultiple WBS

l f l h• It is also very useful to have an opportunity to get project reports that aggregate project data different

ll l h k kdways. Usually we use at least three Work Breakdown Structures in our projects: based on project d li bl j d ibili ideliverables, project processes and responsibilities.

• At least one WBS is mandatory and required by Program Management Office. Others may be selected by project management teams.

Contract Breakdown Structure

kd h f l l f

Contract Breakdown Structure

• Contract Breakdown Structure is the powerful tool for management of contract relationships. The same

l d l l dorganizations are involved in multiple projects and in different programs.

• Contract Breakdown Structures are used to get reports on the contract performance and contract cash flows.

Cost Breakdown StructureCost Breakdown Structure

• Cost Breakdown Structure for contract costs is defined by Program Management Office.

• Contractors can add cost components and create Cost centers for planning and tracking real expenses.p g g p

• We manage not only expenses but also financing.

• Program managers control program project and• Program managers control program, project and contract cash flows.

Project ArchivesProject Archives

• The planners should be able to store project versions and to analyze the progress in project execution, comparing current project and portfolio schedules not only with the baseline but also with any previous version. It enables to assess the progress in project execution for the last week, last month, last year, compared to the baseline, etc.

Typical Fragment LibraryTypical Fragment Library

• Project fragments usually describe typical processes and technologies that are used more than once as small

j tprojects. • Creating project computer models using the library of t i l f t h l t id i i t i dtypical fragments helps to avoid inconsistencies and assures that the project model follows corporate standardsstandards.

• A library of typical fragments is very important tool for the development of common culture and managementthe development of common culture and management standards.

Part 4Part 4

Program/Project g / jSchedulingScheduling

Scheduling TasksScheduling Tasks

• Program/Project scheduling without the resource limitations taken into the consideration,

• Program/Project resource constrained scheduling (resource leveling),( g),

• Determination of feasible time floats for Program/Project activities and those activities thatProgram/Project activities and those activities that are critical,

• Determination of the Program/Project cost material• Determination of the Program/Project cost, material and resource requirements for any time period,

Scheduling TasksScheduling Tasks

• Determination of renewable resources utilization in time,

• Risk analysis and development of the Program/Project schedule and other parameters g / j pallowing for the risks,

• Program/Project performance measuringProgram/Project performance measuring,

• Program/Project performance analysis and forecasting main project parametersforecasting main project parameters.

Tasks to solveTasks to solve

h bl f h d l d l h• The problem of project schedule development without allowing for resource constraints has a correct

h l l ( l h h d) h hmathematical solution (Critical Path Method), which would be the same for all PM packages, provided that i i i l d id i l ll h bl l dinitial data are identical. All other problems are solved using different approaches and yielding different

lresults.

Resource constrained scheduling Resource constrained scheduling

d h d l d d b d ff• Resource constrained schedules produced by different PM software are different. The software that calculates h d h d lshorter resource constrained schedules may save a fortune to its users.

• That is why we pay most attention to resource‐constrained schedule optimization.

Resource constrained schedulingResource constrained scheduling

h h d l b l l ll• The schedule stability is no less important, especially at the project execution phase.

• That is why our project management software Spider Project features an additional option ‐ the support of the earlier project version schedule (keeping the order of activity execution the same as in selected earlier project schedule).

Sample Project before levelingSample Project before leveling

d l f l h k l• Traditional notion of Critical Path works only in case of unlimited resources availability.

• Let us consider a simple project consisting of five activities, presented at the next slide.

• Activities 2 and 5 are performed by the same resource.

Sample Project after levelingSample Project after leveling

l h b l• Please pay attention to activities that became critical. Now delaying each of the activities 1, 2 and 5 will delay h f h d ll hthe project finish date. We call these activities Resource Critical and their sequence comprises Resource Critical

hPath.

Resource Critical PathResource Critical Path

l f• In many projects it is necessary to simulate financing and production, and calculate project schedules taking

ll l ( l d l b l finto account all limitations (including availability of renewable resources, material supply and financing h d l )schedules).

• True critical path should account for all schedule constraints including resource and financial limitations.

Resource Critical PathResource Critical Path

W ll it R C iti l P th (RCP) t di ti i h it• We call it Resource Critical Path (RCP) to distinguish it from the traditional interpretation of the critical path definitiondefinition.

• The calculation of RCP is similar to the calculation of the traditional critical path with the exception thatthe traditional critical path with the exception thatboth early and late dates (and corresponding activity floats) are calculated during forward and backwardfloats) are calculated during forward and backward resource (and material, and cost) leveling.

Resource Constrained FloatsResource Constrained Floats

h h b• This technique permits to obtain resource constrained floats.

• Activity resource constrained float shows the period for which activity execution may be postponed within the current schedule with the set of resources available in this project.

RCP and Critical ChainRCP and Critical Chain

h b dd f l d l• It appears that by adding financial and supply constraints to the Critical Chain definition as well as the

f h l h l l ll bway of the Critical Chain calculation, we will obtain something very similar to RCP.

Part 4Part 4

Success Criteria

Project Success CriteriaProject Success Criteria

If j t it i t fi i hi j t i• If project success criteria are set as finishing project in time and under budget then proper decision making will be complicatedbe complicated.

• Project managers will not be able to estimate the effect of their decisions to spend more money but to finish theof their decisions to spend more money but to finish the project earlier.

• If some project is business oriented then this project has• If some project is business oriented then this project has to have business criteria of its success or failure.


f l h f h h ld• One of potential options – to set the profit that should be achieved at some point in time basing on the f f h h ll b b d f hforecast of the revenues that will be obtained after the project will deliver its results.

• Such success criterion will permit to weight time and money making managerial decisions.


h l d h h d l h• At the next slide you may see the project schedule that is calculated without allowing for project financing and

l h d h hsupply restrictions. There are periods when project has no money to proceed and necessary materials (wall f ) bframes) are absent.


f• But if project manager will find

henough money and materials h j lthen project total profit to some i d d illimposed date will be close to $219 000$219,000.


• If to calculate project resource, financing and supply constrained schedule than total profit will become more than $25,000 less.


• Maybe it is reasonable to borrow money or to find some other solution?f

• To be able to weight options and to choose th b t it i t i l t t lthe best it is necessary to simulate not only expenses. This approach is especially important for portfolio management.

Part 5Part 5

Risk Analysis &R k ySuccess DrivenSuccess Driven

Project Managementj g

Why risk analysisWhy risk analysis

f l h h h• Our experience of project planning shows that the probability of successful implementation of d h d l d b d ldeterministic project schedules and budgets is very low. Therefore project and portfolio planning technology h ld l i l d i k i l i dshould always include risk simulation to produce reliable results.

Risk SimulationRisk Simulation

• Risk simulation may be based on l l hMonte Carlo simulation or use three

scenarios approach that will be d b d f hdescribed further.

Risk Simulation –h i hthree scenarios approach

A j l b i h i ( i i i• A project planner obtains three estimates (optimistic, most probable and pessimistic) for all initial project data (duration volumes productivity calendars costsdata (duration, volumes, productivity, calendars, costs, etc.).

• Risk events are selected and ranked using the usual• Risk events are selected and ranked using the usual approach to risk qualitative analysis. Usually we recommend to include risk events with the probabilityrecommend to include risk events with the probability exceeding 90% in the optimistic scenario, exceeding 50% in the most probable scenario, and all selected p ,risks in the pessimistic scenario.

Risk Simulation –h i hthree scenarios approach

• The most probable and pessimistic project scenarios may contain additional activities and costs due to corresponding risk events and may employ additional resources and different calendars than the optimistic project scenario. As the result project planner obtains three expected finish dates, costs and material consumptions for all major milestones.

Desired ParametersDesired Parameters

h d b ld b b l f h d• They are used to rebuild probability curves for the dates, costs and material requirements.

• Defining desired probabilities of meeting project targets a project planner obtains desired finish dates, costs and material requirements for any project deliverable.

Success ProbabilitiesSuccess Probabilities

f h d h• If the targets were approved then it is necessary to calculate the probabilities of meeting required project

f h bl h h btargets. If they are reasonable then they may be accepted.

• Probabilities to meet approved project targets we call Success Probabilities. These targets may include all project parameters that will be controlled (profit, expenses, duration, material consumption).

BaselineBaseline

• Target dates do not belong to any schedule. Usually they are between most probable and y y ppessimistic dates. A set of target dates and costs (analogue of milestone schedule) is the real(analogue of milestone schedule) is the real project baseline.

• But baseline schedule does not exist!

BuffersBuffers

W d t ti i ti h d l f tti• We recommend to use optimistic schedule for setting tasks for project implementers and manage project reservesreserves.

• Project planner obtains not only the set of target dates but also a critical schedule – a project schedulebut also a critical schedule – a project schedule calculated backward from target dates. The difference between current and critical dates shows currentbetween current and critical dates shows current schedule contingency reserves (buffers).

Sample Critical ScheduleSample Critical Schedule

• There are time, cost and material buffersand material buffers that show contingency reserves

l f jnot only for a project as a whole (analogue of Critical Chain project buffer) but also for any activity in the optimistic projectthe optimistic project schedule.

Success Probability TrendsSuccess Probability Trends

h b f• The best way to measure project performance is to estimate what is going on with the project success

b b l f h hprobabilities. If they raise it means that contingency reserves are spent slower than expected, if they drop it

h j f i d imeans that project performance is not as good as it was planned and corrective actions are needed.


• Success probabilities may change due to:

– Performance resultsf

– Scope changes

Cost changes– Cost changes

– Risk changes

– Resource changes


h b b l d fl l• Thus success probability trends reflect not only project performance results but also what is going

d hon around the project.

• We consider success probability trends as the really integrated project performance measurement tool.


b b l d b d h l• Success probability trends may be used as the only information about project performance at the top

l l b h fmanagement level because this information is sufficient for performance estimation and decision

kimaking.

Success Driven Project ManagementSuccess Driven Project Management

• We call the described methodology Success Driven Project Management.


f f d b• If project performance is estimated by success probability trends then project managers are

d l hencouraged to resolve uncertainties ASAP. This can increase success probabilities even with activity finish d l &delays & cost overruns.

• Postponing problem activities leads to negative trends in success probabilities.


h b f b b l d• This attribute of success probability trends is especially useful in new product development project management.

• On the corporate level it is very useful to know trends and current probabilities of meeting targets for all portfolio projects.

Part 6Part 6

ConclusionsConclusions

Corporate PM Tools and TechniquesCorporate PM Tools and Techniques

d h• Organizing data in a way that supports proper resource work simulation and application of

d d dcorporate norms and standards.

• Creating a set of reference‐books and the fragnetlibraries that are obligatory for creating project computer models.


l l l h d• Calculating Resource Critical Path and resource constrained floats for every project and project

f lportfolio.

• Risk assessment and simulation.

• Defining project success and failure criteria that reflect achieving project business goals.g p j g


• Defining project targets (and corresponding contingency reserves) that may be achieved with reasonable probabilities.

• Regularly recalculating the current probabilities of g y g pmeeting project targets during execution and analyzing success probability trends. Negative success probability p y g p ytrends require corrective actions.

Success Driven Project Management FlowchartREFERENCE-BOOKS:

ResourcesCode Structures Typical Fragnet

LibraryP j t S h d lMaterials

Cost Components

Cost Breakdo n

Project Schedule

Project Budget

WBS Templates

Project PortfolioCost Breakdown Structure

Resource Breakdown Structure

Risk RegisterRisk Analysis

Project Portfolio

Structure

Calendars

Resource Productivities

Issue RegisterSuccess and Failure Criteria

Performance

Unit Costs

Material Requirements per Volume Unit

Success and Failure

Probabilities

Reports

Corrective per Volume Unit

Skills

Multi-Resources

Success Probability Trends

Actions

Work

-

+Authorization

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