Project Estimation: Bench activities

One of the biggest misconceptions in project management is the idea that project cost is a sum of the cost of individual activities. It is not.

Projects always have unavoidable idle time and cost. The idle cost must be included in the project’s overall cost.

The challenge is to develop a DYNAMIC delivery model that can accurately calculate:

• Resource critical path (that defines overall duration) and
• Overall project cost (including idle cost).

It is relatively easy to develop a model that can calculate one or another, but not both at the same time.

A project requires various skill sets and needs people and equipment to be hired with such skills.

Ideally, it would be great to hire resources only for a period of time when they are actually needed, but practically, it may not be possible as:

• It is impossible to predict demand precisely. Delay or acceleration in one part of the project changes demand in another part;
• Demand for specialised skills may not be flat. Some days, projects may need more resources with specialised skills than others.
• If the resource is not secured, it may not be available straight away

Projects usually have idle time for specialised resources. If the project does not pay for idle time, the project may need to wait until the resource is available. However, if the risk is mitigated by securing resources, the project has idle cost that must be included in the overall project cost.

It creates an assignment dilemma:

• If resources are assigned to related activities, we can calculate the resource critical path but not the overall cost;
• If resources are assigned to hammock activities instead, we can calculate overall cost but not resource critical path;
• If resources are assigned to related activities and hammocks, it doubles resource quantity.

The solution to this dilemma is Bench Activities.

Bench activities work like hammock activities, with one critical difference. In Hammock activities, resources are assigned with FIXED assignment. It works well for project support resources.

Bench activity is a dummy activity that should not drive the resource-critical path. It may or may not have a fixed duration (based on an arrangement agreement) and has a VARIABLE resource assignment.

When a resource does not perform any activity, it is AUTOMATICALLY moved to the bench activity. The cost of all bench activities is the project idle cost.

In that case, a dynamic delivery model can calculate resource critical path and overall cost correctly.

It also opens an opportunity for two valuable project control metrics: ‘idle time’ and ‘idle cost’. These metrics could be applied to the whole project, a work package or skillset.

In this example, six activities require the same skill (Specialist). Demand for this skill is not 100%. There are periods when fewer specialists are needed. The bench activity calculates the cost of resources when they are not assigned to any activity.

If the duration of any activity and/or resource supply changes, idle and overall costs are automatically recalculated.