A Critical Pseudoscience Problem and Workaround Solution

 

ADVISORY ARTICLE

By Dr. Kenneth F. Smith

Hawaii, USA

 

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ABSTRACT

This article highlights a flaw underlying the traditional “PERT” approach for estimating project activity durations and proposes a workaround solution.

THE PROBLEM

Estimating activity durations and scheduling project delivery and completion dates is particularly critical for both Contractors with Firm Fixed Price (FFP) contracts, as well as Clients/Donors awarding Cost Plus Fixed or Incentive Fee (CPFF & CPIF) -type contracts.

However, the difficulty of developing realistic time estimates has been pinpointed by participants in my project management seminars as one of their major concerns.   Experienced project managers unanimously acknowledge that — for one, or more, reasons – planned schedules were typically under-estimated.  Even those using the standard “PERT” formulas to estimate activity & project duration said that in practice both the “Most Likely” and the subsequently-calculated “Earliest Expected” times were unrealistic; being significantly over-optimistic!

As a bit of background, the Program Evaluation & Review Technique (PERT) is a statistical probability-based time-estimating technique of the Critical Path Method (CPM) — introduced in the late 1950’s — with which I became acquainted in the early 1960’s when I was a management intern on the U.S. Navy’s Polaris Project.  Today, PERT is a standard tool, incorporated into some scheduling software for use when there is uncertainty with individual activity time duration estimates.  [Not incidentally, when visiting Pearl Harbor with some of my grandkids a few years ago, I was shocked to see a Polaris Missile on exhibit as a museum piece near the entrance to the visitors’ center!]

The PERT formula for estimating an activity duration is: te = ( Opt + 4M + Pess ) / 6

Where: 

te     = earliest expected time estimate, i.e. a weighted average or “mean” of the range of possibilities

Opt    = optimistic time estimate

M      = most likely time estimate

Pess   = pessimistic time estimate

4        = a constant weight

6        = a constant divisor

For example, where:        Opt = 3;   M= 7 and    Pess = 23:

 te   =  [3 + 4(7) + 23] / 6    =  [(3 + 28 + 23)] / 6    =  54 / 6    =    9

Although seemingly more statistically sophisticated than a simple 3 point ‘average’ estimate – i.e. an arithmetic mean — the fundamental flaw in using this formula to estimate an Activity (or activities, and the overall project schedule) duration is that — by definition — the resultant te is merely a weighted average.  Hence the probability for completing the Activity (activities, and/or project schedule) by the expected time is still only 50%.  In other words, if/when applied to project activity scheduling, the calculated Project Activity te duration is under-estimated at least half of the time. Consequently, from the outset, the odds of the resultant activity milestones – and, indeed, the overall project – being completed as planned are just 50 / 50 — a very high risk that the estimated schedule will be overrun.  In essence — despite giving more weight to the Most Likely estimate — this pseudoscientific approach to take probability into account in estimating activity durations is still no better than tossing a coin!

More…

To read entire article, click here

 

How to cite this article: Smith, K.F. (2019).  Estimating Realistic Activity Times: A Critical Pseudoscience Problem and Workaround Solution, PM World Journal, Vol. VIII, Issue IX, October. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/10/pmwj86-Oct2019-Smith-estimating-realistic-activity-times.pdf

 

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About the Author

Dr. Kenneth Smith

Honolulu, Hawaii

 

 

 Dr. Kenneth F. Smith has been a project management consultant for ADB, the World Bank, and USAID for decades. He earned his DPA (Doctor of Public Administration) from the George Mason University (GMU) in Virginia and his MS from Massachusetts Institute of Technology (MIT Systems Analysis Fellow, Center for Advanced Engineering Study). A long-time member of the Project Management Institute (PMI) and IPMA-USA, Dr. Smith is a Certified Project Management Professional (PMP®) and a member of the PMI®-Honolulu Chapter.

NOTE: Ken’s book — Project Management PRAXIS (available from Amazon) — includes many other innovative project management tools & techniques; and describes a “Toolkit” of related templates available directly from him at kenfsmith@aol.com.

 

 

in Head Office despite their projects being offshored to the Offshore Center

 

ADVISORY ARTICLE

By Vimal Kumar Khanna

New Delhi, India

 

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A large number of global companies are running Offshore Centers in distant countries. These companies have augmented their project teams in their global Head Office (HO) with the Offshore Center teams. The projects are distributed across the Offshore Center and HO, with the Offshore Center managers and HO managers leading the project teams to deliver on the project objectives.

In the absence of an Offshore Center, the managers in HO manage large projects with large directly reporting team sizes in the HO. However, as the company starts its Offshore Center, it offshores some of these projects. As time progresses, more projects with larger team sizes are offshored because of the advantage of lower cost of executing projects in the Offshore Center.

Initially, the managers in HO directly control the Offshore Center project teams working on their globally distributed projects. As the project size and project team size increases, the Offshore Center components of these distributed projects are managed by local managers in the Offshore Center. Over a period of time, the Offshore Center teams and managers gain in expertise and experience in executing projects. The company then decides that some of its projects will be executed totally within the Offshore Center and will be independently managed by local managers in the Offshore Center.

However, giving more responsibilities to the Offshore Center managers may possibly dilute the authority and responsibilities of the HO managers. The HO managers end up managing much smaller teams in the HO. These HO managers feel that their authority and span of control over the teams has been significantly reduced. They start feeling insecure about slowly losing all their projects and all their authority to the Offshore Center management.

We suggest that these insecurities of the HO managers should be addressed by assigning them new and additional offshoring-related role and responsibilities. The suggested techniques can not only prevent dilution of the authority and responsibilities of the HO managers but can also make their role more critical to the company and can significantly enhance their contributions, even compared to the earlier role being played by them in the absence of the projects being offshored to the Offshore Center.

Let us consider the case of a global product development company with an Offshore Center. The product features are decided by the company’s Product Management team. The product management team interfaces with the key customers of the company to understand their pain-points and requirements, to decide the right set of features for the product. Since most of the key customers of the product are typically based in the country of the HO, the product management team is also based in the HO of the company.

Some components of the product are developed by executing independent projects in the Offshore Center that are managed totally by local managers. Although the Offshore Center manager of an independent project will have the management expertise and experience to deliver on it, it should be noted that the company’s product management team and key customers are still based in the HO.

More…

 

To read entire article, click here

 

How to cite this article: Khanna, V.K. (2019).  How to enhance role and responsibilities of managers in Head Office despite their projects being offshored to the Offshore Center, PM World Journal, Vol. VIII, Issue IX, October. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/10/pmwj86-Oct2019-Khanna-how-to-enhance-role-and-responsibilities-of-head-office.pdf

 

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About the Author

Vimal Kumar Khanna

New Delhi, India

 

 

 

Vimal Kumar Khanna is the Founder and Managing Director of mCalibre Technologies. He has more than 34 years of industry experience. He has won multiple international honors for his contributions to the management and technology domains – being listed in Marquis Who’s Who in the World and being Honorary Editor of IEEE Communications. He is the author of Amazon #1 Best Seller Book “Leading and Motivating Global Teams: Integrating Offshore Centers and the Head Office” published by CRC Press – USA (Taylor & Francis group). His sole-authored papers have been published in leading global refereed journals, magazines, and conferences. He is a frequent speaker at Project Management Institute (PMI) Global Congresses―North America, EMEA, and APAC. He is a frequent contributor to multiple PMI official global publications – PM Network and PMI E-Link.

 

 

from Project base to product base organization

 

Article two in a three-part series

ADVISORY ARTICLE

By By Waffa Karkukly, PhD and Ian Laliberte, MBA

Ontario, Canada

 

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Abstract

In the first article of this series, we focused on the need for PMOs to become digital to stay valuable for their organization and continue to improve and adopt industry trends; and to be more equipped to support their organizations’ digital transformations. We explored the PMOs landscape today and what is expected of them to do and not do to transition to digital and how the internal readiness and external readiness preparation play an essential role in ensuring success in digitalize themselves, and be ready for their organizations’ digital shift.  In this second article, we will explore what it means to be a product based and differentiate the areas of focus for a product based vs. a project-based organization.  We will step through the required elements for a successful transformation and explain the details for each of these elements. Further, leverage a specific organization transformation to share the challenges and benefits from a product-based model, and explore what changes the new model will make to ensure success, and what are the expected outcomes and measures.  Finally, the success of the new model relies on the orchestration of the various functions namely the EPMOs/PMOs and explain the reason they need to be re-invented, as well as the for a new oversight function to be setup to support the product-based organization in the digital landscape.

Key Words:  DPMO, DMO, Journey, Platform, Product-based, Project-based, Agile.

Introduction

Nearly two-thirds of CEOs and senior business executives already have a digital business transformation initiative underway at their organization. Some 90% of corporate leaders view digital business initiatives as a top priority, but 83% are not making any meaningful progress (5).

Organization differentiate themselves based on their business model, PMO is a business model that some organizations created to seek differentiation in the way they deliver products and services, or in the way they optimize on their strategic investments while maintaining the lights on for their operation.  The main problem that many organizations face today in the digital transformation is the operating model which impacts the PMO regardless of the PMO digital to gain the anticipated benefits.

In Deloitte’s most recent industry 4.0 reports, 48% of executives indicated that introducing new business models was one of the top five topics discussed most frequently within their organization, yet only half of those leaders consider themselves ready for new business model. The business model has become the basis of competitive differentiation in creating, delivering, and capturing value in the digital realm (2). According to the 2019 Gartner CIO Survey, enterprises are changing their business models and requesting help from the IT function to do so.  Forty-nine percent of the organizations surveyed reveal they experienced business model change, with 13% reporting they have already changed and 36% in the process of changing (5).

One of the most popular models that are on the rise is the product-based organization.   Businesses are making a model shift in becoming a product focus organization rather than a project focus organization for many reasons; one of the primary reasons is the digital disruption and what it means in delivery expectations. What does it mean to be a product-based organization?

More…

 

To read entire article, click here

 

How to cite this article: Karkukly, W. and Laliberte, I. (2019).  The Digital PMO: Shifting Organizations from Project base to product base organization, PM World Journal, Vol. VIII, Issue IX, October. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/10/pmwj86-Oct2019-Karkukly-Laliberte-the-digital-pmo-part2.pdf

 

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About the Authors

Dr. Waffa Karkukly

Ontario, Canada

 

 

 

Dr. Waffa Karkukly, PhD, MIT, PMP, ACP, CMP has over 20 years’ experience in IT, and Project Management. Waffa has helped fortune 100, midsize, and small sized organizations improve their project management practices and PMO establishments through building scalable standards and proven solutions that improved their delivery process. She held many positions ranging from big 5 to small startups where she held the responsibility of managing IT strategy and operation; in her career progression she became head of PMO with titles ranging from director to VP, responsibilities ranging from $50 million to $1billion in Enterprise assets for global and international organizations.

Waffa is a strategist and change agent who had many organizations’ transformations in building agile organization culture and building CoE for IT organizations. Waffa teaches various beginners and advance project management and IT courses at various Ontario universities and colleges. She is a program and curriculum lead developer for variety of topics aligning education certificates with practical industry needs and trends.

Waffa holds a BSC in Information Systems from DePaul University, an MIT from Northwestern University, and a PhD from SKEMA School of Business. She is a Project Management Professional (PMP), Agile Certified Professional (ACP), and Change Management Practitioner (CMP) who is dedicated to improving the understanding and standards of project management practices especially in the Value proposition of Strategy execution via Portfolio Management and PMO.

Waffa is an active PMI member who has held various positions of Director of Communication for the PMO CoP and Regional communication coordinator for the PMOLIG. Waffa was one of the committee members that built the standards for PMI-OPM3. She is a volunteer and an Academic Reviewer for PMI’s academic paper proposals selection. She contributes often in project management publications and is a frequent speaker in project management chapters and forums.

Dr Karkukly can be contacted at karkuklyw@yahoo.com

 

 

Ian Laliberte

Ontario, Canada

 

 

Ian Laliberte, MBA, PMP, PRINCE2, is Vice President of Delivery Transformation, responsible for the TD’s strategy and transformation to ‘Agile Ways of working’. Ian joined TD in January 2014 as Vice President, Canadian Banking, Auto Finance and Wealth Management PMO and led the transformation of the project execution framework. In this role, he was responsible for managing the end-to-end delivery of the change portfolio for both business and technology initiatives.  From there, Ian then took on the role of Vice President of Delivery, Shared Services, where he was responsible for strategy, operating model and overall operations of IT for Canadian Banking and Wealth.

In over 20 years he has held senior positions leading business and IT transformation through turnaround, realignment and revitalization within international distribution, manufacturing, insurance (Life and GI) and banking industries.  Before joining TD, Ian held diverse Information technology, Project Management, and leadership roles at Canadian Bearings.  He has also held executive technology roles with Aviva Insurance, which included Change and IT Strategy, EPMO, Management Information & Analytics, and he has led Commercial Lines business transformation and the implementation of a business and operating model for Aviva’s Digital business.

Ian graduated from New York Institute of Technology with an MBA in Global Management. Ian’s leadership thinking has also been recognized as part of the top 50 thought-leaders in change excellence, and he has been published in 2014 Project Management Best Practices: Achieving Global Excellence – 3rd Ed (by Dr. Kerzner), collaborated in 2012 Managing the PMO Lifecycle, by Dr. Karkukly, and many other recent PMI article and publications on standards.

Ian can be contacted at ian.laliberte@sympatico.ca