A Short Introduction to Project Management

By Bob Hugg


We must accept that all Project Management (PM) plans are estimates, or nothing wonderful may come of the tale we are about to share (regards to Charles Dickens from his 1837 classic A Christmas Carol). Project Management is the often misunderstood discipline that, like meteorology, gets by with educated guesses that are frequently wrong. It is, at its finest, close to the mark but often is altogether far from the mark. It is the art and science of crafting reliable estimates out of that most unreliable source, human behavior. Why, then, use Project Management at all? As Winston Churchill said (when speaking of democracy) it is a terrible choice except for all the others. In other words, an organized and well thought out attempt to control the fire is better than joining in the fun and watching Rome burn. To understand PM a little better a more sensible start must be made; perhaps a good place to start is the beginning, a basic definition of Project Management.

 

In the broadest sense, PM is more a management philosophy than any single methodology. It simply says that efficient management yields effective results. A little closer look and the definition becomes the act of arranging tasks and resources for the most efficient and productive result. Yet more tightly defined, it becomes a quest whose guiding star is management of resources & constraints to meet a goal in as efficient a manner as possible. Spock (Mr. not Dr.) would say it is an exercise in pure logic; Sartre and Kierkegaard would say it is nothing short of a draconian attempt to suppress the individual creativity for the sake of the group mediocrity. All are correct and none are correct; an elegant and slightly metaphysical definition is that PM is the subtle art of balancing the known and unknown to achieve a more predictable result. PM balances the talents, skills and limitations of humans against a desired outcome. It seeks uniformity and conformity in design so that the results may become more predictable.

 

It is for this reason, this delicate balancing act, that PM is controversial. By nature it sets expectations and creates a structure of accountability. It relies on tangible estimates of costs, duration, and effort. It asks 2 simple questions which can be devilishly difficult to answer:

 

1)     What tasks are necessary to do this project?

2)     How long will it take to do those tasks?

 

Based on the answer to those 2 questions, PM answers 4 basic questions that managers the world over have asked since Noah started on his ark:

 

1)     How long will this project take?

2)     What will it take to do this project?

3)     Can it be completed sooner?

4)     How likely is it that it will be done on time?

 

PM becomes controversial because even the best estimates are just that, estimates. A project that takes longer than estimated also costs more than is estimated and the final product is not available when desired. As a result, the spotlight shines brightly on workers and supervisors alike, an uncomfortable experience at best. PM becomes, in many ways, expectation management. It balances the expectations of the end-user (when it can be done and what the project can do) against the expectations of the workers (when it can’t be done and what the project can’t do). PM attempts to manage not only time, people and money, it attempts to manage scope. Scope is simply a specific definition of what the project will and will not entail.

 

PM is valuable as a means to define a project and its tasks and to provide a common sheet of music for workers, stakeholders and managers alike. It is a wonderful way to get and stay organized and, once a project plan is drafted, forces all involved to ask and answer a hard question: is this the goal we are trying to meet and is the price worth the goal? It is a very good way to identify the requirements and risks of a project long before a project is started or even agreed upon. PM is a great group communication exercise in “what if.” How much, how long, how many, how complicated, how likely, how does it affect, etc. When faced with these answers, many well intentioned projects are demoted to “good ideas if we ever have extra time, money, etc” that are put on the shelf. Better to define the requirements of a project before resources are committed than to cancel a project in the bright light of the real picture. According to a 1998 survey of managers across the U.S, 30% of all projects started are cancelled before completion. PM provides an alternative to blindly embarking on projects. It provides a clearly defined goal, a clear (but estimated) sense of costs, tasks, and time. It is for that reason that PM has been used in one form or another for thousands of years. Traditional PM as practiced today is a much newer entity, not quite 100 years old, and is a more refined process than that used by the ancient Egyptians.

 

The first standardized approach to PM was crafted by Henry Gantt with the introduction of bar charts that showed task durations and a crude (but not intuitive) relationship between tasks. In 1917, as America powered up to an industrial zenith, management frustrations ran high as tasks became more numerous and more complex. In answer, young Mr. Gantt devised a technique (the Gantt chart) that organized tasks in a visual and logical manner that made it easier to get a snapshot of the progress of the tasks individually and the project as a whole. Though it fell far short of reflecting many of the critical and complex parts of projects it was a breakthrough technique that became the first standardized PM technique. PM was, and is, a broad management philosophy embracing many techniques and methodologies and Gantt’s single standardized tool provided the first common ground. For the first time, PM was a formal and organized discipline; unfortunately it would change little for the next 40 years. A sample Gantt chart is shown in figure 1.

 

Figure 1, Sample Gantt chart

 

As the arms race became a central facet of the cold war, the need for efficiency in the military-industrial complex became an obsession, particularly in the face of sputnik, the Soviet Union’s crude little satellite that beat America to the punch in space. The U.S. Navy, plagued by cost and time overruns in the Polaris Submarine program, created PERT (Program Evaluation and Review Technique). PERT is a technique that requires clear scope definition and optimistic, pessimistic and most likely duration estimates for every task and the project as a whole. By creating a logical sequence of tasks, each with its own duration estimates, PERT provided a more realistic estimate of the probable task (and project) durations. A Typical PERT project would be illustrated on a PERT diagram (a.k.a. network diagram) as shown in figure 2.

 

Figure 2, Sample PERT Diagram

 

PERT is a probabilistic model – it derives its estimates based on the probability of occurrence. It is based on a beta distribution – a flexible yet continuous distribution that places value on the event itself and the interval between events. Because it accounts for a degree of randomness, it is highly useful in determining likely event durations – time estimates for tasks. In other words, with user-supplied estimates (pessimistic, optimistic and most likely) PERT can derive a task duration with a high probability of accuracy (It is still an estimate, however, because it is only as good as the estimates used in the computation). PERT was a major PM breakthrough because it provided a standardized way to quantify probable task durations. It is a scientific approach to balancing the known (user supplied estimates) with the unknown (the probability of accuracy of those estimates) in order to achieve a more predictable result.

 

At the same time, industry in the private sector created a competing PM model, Critical Path Method (CPM). Unlike PERT, CPM is a deterministic model – based on the concept that previous events, not probability, determine events. Like PERT, CPM identifies a critical path of tasks (hence the name) that reflect the longest path through the network of tasks. Unlike PERT, CPM analyzes only the longest chain of critical tasks. These critical tasks determine the overall length of the project. If these tasks can be shortened, the project will be shortened; tasks not on this critical path will have no effect on the project duration. Unlike PERT, CPM places value on the sequence of events and does not recognize other variables. In a very simplified paraphrase, CPM states that if task A takes 10 units, task B takes 5 units, and task C takes 8 units, the project will take 23 units. CPM accounts for task in sequence and is useful in easily determining bottleneck points or areas that can be manipulated for improving the speed of project completion (crashing).

 

Because they share similarities, PERT and CPM can be (and frequently are) used together. PERT and CPM both assume that a small set of activities, which make up the longest path through the activity network control the entire project. PERT and CPM also share six key assumptions:

 

1)     All tasks have distinct begin and end points

2)     All estimates can be mathematically derived

3)     Tasks must be able to be arranged in a defined sequence that produces a pre-defined result

4)     Resources may be shifted to meet need

5)     Cost and time share a direct relationship (Cost of each activity is evenly spread over time)

6)     Time, of itself, has no value

 

When used together, PERT and CPM can provide:

 

1)     A range of time estimates (PERT)

2)     Likely time estimates (PERT and CPM)

3)     Cost estimates (CPM)

4)     Time and costs if crashed (CPM)

5)     Probabilities of completion on time for a range of times (PERT)

6)     A clear path of tasks that are critical to the project (PERT and CPM)

7)     A central focus for solid communications on project issues (PERTT and CPM)

 

PERT and CPM have remained unchanged since 1958 with the notable exception of the introduction of the Work Breakdown Structure (WBS). WBS is a detailed, hierarchical (from general to specific) tree structure of deliverables and tasks that need to be performed to complete a project. The purpose of a WBS is to identify the actual tasks to be done in a project. WBS serves as the basis for much of project planning. Work breakdown structure is, perhaps, the most common project management tool; it was created by the US military in the 1960s as an extension to PERT. A sample WBS is shown in figure 3.

 

Figure 3, Sample WBS

 

PERT and CPM share several weaknesses that add to the PM controversy. Both consider only causal dependencies, where 1 task must be completed before another can begin (have to bake bread before you can make a sandwich). Other dependencies, such as resource dependencies, where a task is limited by availability of resources (more bread can be baked by 2 bakers, but only 1 is available) or discretionary dependencies (optional task sequence preferences that, though not required, may reflect organizational preferences) are not considered. The range of assumptions required for PERT and CPM to be effective, and the lack of acknowledgement of dependencies, has led to newer PM theories which are not mainstream and are considered experimental.

 

New PM tools and methodologies have evolved which make scheduling and analysis easier and less time consuming. Some methodologies are mainstream and some are experimental; most are industry-specific. Tools range from the simple and generic (Excel is widely used for small projects) to the grandiose (Scitor Scheduler/Communicator is common in software development). There are software PM packages that are designed to fit every niche and unique industry requirement from healthcare to aerospace engineering and everything in between. Prices range from less than $100 to many thousands of dollars per copy. The most commonly used package is Project by Microsoft Corporation.

 

While they are diverse in their add-ons (that reflect the specific industry served) all share a common foundation: they are all based heavily on PERT/CPM. In most cases, unless a person is working on enormous and complex projects, these packages will be overkill. While using Excel could suffice, it has no inherent capability to reflect relationships, generate reports or highlight trouble areas. MS Project, because of its (relatively) user friendly nature, lower cost, and high degree of customizability is a common choice in tools. Because MS Project does not calculate probabilities of timely completion, a manager should remain well versed in doing so manually or using excel. These techniques will be covered in detail in the block on PERT calculations.

 

PM philosophy is a valuable mindset for managers at all levels but is just one consideration of many. The selection of a tool, such as Project or Excel, or the selection of a technique, such as PERT or CPM, should be balanced against the needs of the organization as a whole and the specific goal of the project. No tool should become the focus; the project goal and the best way to achieve it must be the deciding factor, along with the organizational personality.

 

Resources Used in This Unit

 

Goldratt, Eli, Dr., The Goal: A Process of Ongoing Improvement, Great Barrington: New River Press, 1996.

 

MS Project, by Microsoft Corporation.

 

PM Body of Knowledge (PMBOK), Philadelphia: PMI, 2000.

 

Project Management Institute (PMI) Resource Center

<Project Management Institute Website>.

 

Render, Barry and Stair Jr., Ralph M. - Quantitative Analysis for Management, Massachusetts: Allyn & Bacon Inc., 1982 .

 

US National Performance Survey, The Standish Group, 1998.

 

Verma, Vijay K., Managing the Project Team: The Human Aspects of Project Management, Philadelphia: PMI, 1997.

 

Wiest, Jerome D., and Levy, Ferdinand K., A Management Guide to PERT/CPM, New Delhi: Prentice-Hall of India Private Limited, 1974.


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1996 A.J.Filipovitch
Revised 11 March 2005