Project Anti-Crashing Method

Project Anti-Crashing Method

PMBOK and some other project management standards describe two key methods for schedule optimisation: fast-tracking and crashing.

Apart from these well-known methods, there is a method that hasn’t been described widely. So, let’s feel in the gap.

Anti-crashing

This method works as it sounds: opposite to the crashing method. So, let’s review the project crashing method first.

Crashing technic in scheduling:

Crashing is a project management method used to speed up a project’s timeline by adding extra resources without changing the project’s scope.

Adding extra resources is not the only way to reduce the duration of an activity.

  • Activity duration can also be reduced by assigning resources with higher productivity rates or by changing resource calendars: extended working hours, work on weekends and holidays, additional shifts, etc.
  • Project duration can be reduced only when crashing is applied to activities on the critical project path.
  • Just like two women can’t deliver a baby in 4.5 months, the duration of some activities can not be reduced by deploying additional resources
  • Duration of activities does not always have a linear dependency on a number of assigned resources. This issue was discussed in the “Project Team assignment” post.

The crashing method sounds very logical and easy to understand. However, project life is not as simple as it’s described in project management books. In real-life situations, there are cases when project duration can be shortened by REDUCING assigned resources.

Let’s review the following example:

Project Critical Path: A – B – C – D – E

Project Duration: 42 days

Resources assignments:

Activity “B”: 2 resources

Activity “C”: 2 resources

Activity “D” 2 resources

A project manager wants to speed up this project and has an opportunity to deploy additional resources to activities B, C and D.

 Let’s analyse how this potential optimisation would work:

 Assume critical Activity “B” has two additional resources assigned. Then the activity will be completed in 10 days (instead of 20 days), and the whole project will also be delivered 10 days sooner, equalling 32 days.

The same result will be seen, if Activity “D”, has 4 assigned resources (instead of 2).

 Now let’s apply crashing to Activity “C”. If 2 additional resources are assigned, this activity will be completed in 4 days (instead of 8).

The critical path will be the same, and the new duration of the project will be 46 days.

Wait, now the project will take 4 days longer, not shorter (!!!).

 What if we do the opposite and reduce the number of assigned resources in Activity “C” from 2 to 1?

In this case, Activity “C” will be completed in 16 days (instead of 8), and the new duration of the project will now be 34 days.

 So, as we can see, when we reduce the number of assigned resources, the duration of the activity will increase. However, the duration of the whole project will decrease (!!!).

It is not just a theoretical example; projects often have parallel activities performed by different teams or crews. In this case, start-to-start and finish-to-finish (sometimes lags and leads) logic is applied. Different teams/crews may have different productivity rates, and often the less productive team assigns extra recourses to their critical activity. However, applied crashing may sometimes lead to the opposite result. In those cases, projects need to apply the “anti-crashing” method instead.

Summary

Both crashing and anti-crashing methods focus on changes in resource management.

If the crashing method increases assigned resources to reduce the duration of critical activity, the anti-crashing method, on the opposite, reduces assigned resources to bring the start date of critical activity earlier.

Anti-crashing is a project management method used to compress a schedule by reducing resources and without changing the project’s scope. This includes:

  • Reduce assigned resources
  • Assigned resources with a lower productivity rate
  • Change working calendars

Actual schedules are much more complex than the example in this post, and it is not always easy to identify when anti-crashing needs to be applied instead of crashing. In the next post, I am going to explain how to identify these cases.

Alex Lyaschenko

PMO | Portfolio Planning & Delivery | PMP | P3O Practitioner | AgilePM Practitioner | Six Sigma

Realistic Project Delivery KPI

Realistic Project Delivery KPI

How often have we been told that projects are late and over budget and we need to do something about it?

At the same time, it is an absolute lack of understanding that it could be a sign of project delivery maturity rather than a real issue! The real issue is when ALL projects are on time and budget.

In this post, we will discuss this challenge from different perspectives and try to answer the fundamental question: Do we want all our projects to be on time and budget, or not?

An ideal project delivery

Many portfolio managers, sponsors, and project managers want their projects always to meet committed dates and budgets. An ideal scenario is when ALL projects are delivered on time and within budget, as their performance is often evaluated based on these criteria.

However, what is ideal for individual performance is not necessarily an ideal scenario for a portfolio. Let’s go deeper to a project level to understand why.

Each project ALWAYS has uncertainties and risks. So, it is not possible to predict project duration and cost precisely. It always ranges. A range for project durations and a range for project costs. Something like this famous hat:

Boundaries of these ranges may be unclear for project stakeholders, but they always exist.

In reality, there are rare cases when a range goes to infinity, but it is an exception from the rule and probably another good topic to discuss. The absolute majority of all projects have a distribution of cost and time.

There are many possibilities of how time and cost targets could be combined.

Someone (let’s say a “Sponsor”) decides which of all combinations will define project targets. The committed delivery date defines the target for the duration, and the committed project budget defines the target for the cost.

The probability of meeting both targets is lower than meeting each of the targets.

For example, if a project has agreed on targets and there is 90% chance that the project will be on time and a 90% chance that the project will be on the budget, the probability that both times and budget achieved will be less than 90%.

Different targets that include different types of contingencies may exist, but to keep it simple, assume there is one key set of targets. Delivery beyond these targets is going to be considered a failure.

Some sponsors choose very aggressive targets with low probabilities to meet them; others prefer a conservative approach with a higher probability of success.

When a sponsor doesn’t clearly understand ranges and distribution of possibilities (or are misled by low-quality risk analysis reports), they may assign a target outside the range. Yes, some projects are planned to fail.

Achievable and Realistic

If all projects in a portfolio constantly meet targets, this could mean one of two things:

  • Project managers have magic wands;
  • It was too easy to hit the targets;

Why could not all projects be just managed well and delivered as expected? Because Black Swan events exist.

A Black Swan event:

A Black Swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black Swan events are characterised by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.

A Black Swan event is unpredictable (Unknown Unknowns), and you won’t find a related risk in the project risk register. Also, there are predictable (Known Unknowns), unavoidable low-probability / high-impact risks that could significantly impact project delivery. If such risks materialised and the project still meets the targets, it means that this project had a sufficient contingency to cover such risk, which could be the real problem!

From the “Parkinson’s Law”, we know that work expands to fill the time available for its completion. So, projects with significant contingencies (to cover “Black Swan” events) will likely take longer and be more expensive, even if the risks don’t materialise.

Parkinson’s law:

work expands to fill the time available for its completion.

The project delivery paradox

Mature and non-mature portfolios have different approaches to setting up projects and controlling project delivery.

Organisations with a non-mature project delivery don’t plan projects properly or apply deterministic, critical-path-based planning. Executives assign project targets without visibility of possibilities. Their projects take longer and spend more (sometimes substantially more) budgets. However, Portfolio managers rarely understand the actual delivery rate and often have an illusion of good performance.

Once executives of one of my clients decided to increase the project delivery rate from 90% to 95%, their Project Delivery KPI report showed that they were constantly above the 90% threshold. In reality, the actual measures discovered that they were below 40%.

Organisations with the mature project and portfolio management apply probabilistic planning and set the targets based on calculated probabilities. They accurately monitor how the probabilities change during the project’s progress. Their project delivered faster and with less budget, but it is still below the 100% mark. The 80% of on-time & budget projects is usually a good result.

A project portfolio delivery methodology that includes probabilistic methods is SDPM (Success Driven Project Management). SDPM has methods for:

 

  • full integration of scope, time, cost and risks
  • development of probabilistic project delivery plan and schedule
  • set and monitor probabilities of success.

Organisations that implemented SDPM understand how changes in project delivery and a risk profile impact probabilities to meet agreed targets. They control the contingency consumption.

Summary

  • A project with a contingency that covers low-probability / high-impact risks and ‘Black Swan” events is likely to meet planned targets. However, the project is also likely to spend available contingency even if the risks have been avoided (Parkinson low).
  • When all projects in a portfolio always meet targets, it is a sign that project KPIs don’t reflect reality, and the genuine delivery rate could be much lower.
  • SDPM methods focus on building optimised probabilistic project delivery plans, setting up the achievable project and portfolio targets, and controlling probability changes.

Alex Lyaschenko

PMO | Portfolio Planning & Delivery | PMP | P3O Practitioner | AgilePM Practitioner | Six Sigma

Contract Cost vs Actual Cost

Contract Cost vs Actual Cost

Project-driven companies need to manage several budgets for the same project. Particularly useful to control contract cost (income) and actual cost (expenses) of project.

The actual cost comprises of equipment, materials, resources and other direct and indirect expenses.

Cost Centers
Spider Project unique feature – Cost Centers enable to control several budgets of the same project. Project cost components in Spider Project could be grouped in cost centers to control both: contract and actual costs.

This approach has a number of advantages:

  • To be competitive in tenders, as it is extremely useful to calculate planned profit, taking risks and uncertainties into account;
  • During project execution, project managers can control how their decisions impact profit;
  • Project sponsors can understand the “cost of delay”.

See how Contract Cost and Cost Centers work in Spider Project:

Julia Lyaschenko

PMO | Program Planning & Delivery Specialist | PRINCE2© Practitioner | SAFe© Agilist (SA)

Indirect Project Cost

Indirect Project Cost

Direct and Indirect Project Cost

Project cost consists of direct cost components such as labour, materials, machinery and equipment costs. Also, an overall cost may include indirect cost, frequently referred to as overhead expenses: rent and utilities, some general and administrative expenses, or even some portion of accounting and human resource department costs.

Organisations have business rules of how indirect cost has to be applied. Usually, it is a percentage of overall direct cost or specific cost components.

Spider Project allows applying formulas to cost components for easy calculation of indirect project cost, based on unique organisational business rules.

Such an approach allows understanding of the “cost of delay” when the indirect cost increases overall project cost if the project takes longer than expected.  

See how inderect project cost & schedule integration work in Spider Project:

Julia Lyaschenko

PMO | Program Planning & Delivery Specialist | PRINCE2© Practitioner | SAFe© Agilist (SA)

Cost and Schedule Integration

Cost and Schedule Integration

An integrated delivery model must take into account all technical, resource and financial constraints.

Full integration between project time and cost must include all expenses assigned to project activities, resources and time-driven tasks.

Cost Components

As each project is unique, it may require different cost components like: labour, materials, machinery, licensing, indirect cost, penalties, cost of delay, contract costs and many others.

  • It is not sufficient enough to just have a single cost category. It is essential to manage and analyse project costs from different perspectives. So, cost components must be defined and set up based on project nature.
  • Additionally, to expense costs, a project can have contract costs, and in many cases, it is necessary to create and manage several budgets for the same project.

Therefore, it is necessary to define these elements as individual cost components that can be used for project budgeting, project performance and risk analysis.

Cost Assignments

Different projects may require managing cost elements in different ways:

  • Activity costs can be defined as fixed, cost per volume unit, and cost per work hour;
  • Renewable resource cost can be defined as cost per hour;
  • Consumable resource cost can be defined as cost per unit;
  • Resource assignment cost can also be fixed or defined as cost per work volume unit and hour;
  • Indirect costs usually depend on project duration, and they are assigned on the Level of Effort or Hammock activities. It is usual practice to calculate them as the percentage of some cost components.

The cost of time must also become a part of the project model. Usually, project cost rises when the finish is delayed or drops with the schedule acceleration.

Cost and Schedule Integration

Proper cost and schedule integration require:

  • Project delivery plan to be built based on volumes of work, resource productivities, resource availability, material supply and funding constraints.
  • Project cost loaded based on the relevant cost components.

Only then a project delivery model has a full and reliable cost and schedule integration.

The application of this approach can significantly improve project management culture and increase the number of successful project implementations.

Spider Project allows full integration of time and cost. The project team can set up all necessary cost elements in all possible ways.

See how cost & schedule integration works in Spider Project:

Julia Lyaschenko

PMO | Program Planning & Delivery Specialist | PRINCE2© Practitioner | SAFe© Agilist (SA)