2nd Edition
Total Project Control A Practitioner's Guide to Managing Projects as Investments, Second Edition
There is often a deep disconnect between the project team’s goals and those of the organization. Senior management wants "profitable" projects, but is only able to quantify its wishes in terms of the traditional project management elements: schedule and cost. To operate smoothly, the entire organization must be driven by the single goal of project profitability. Total Project Control presents valuable enhancements to the traditional project management approach, introducing new metrics and techniques for assessing the performance and profitability of projects.
Demonstrating how to maximize the business value of a project, this book discusses new profitability-based data metrics, such as expected monetary value (EMV), expected project profit (EPP), Devaux's Index of Project Performance (DIPP), critical path drag, drag cost, and the cost of leveling with unresolved bottlenecks (CLUB). The impact of implementing these metrics can be far reaching. Not only will good management decisions, at both the project and executive levels, be supported by quantitative data, but bad decisions will become harder to justify.
This book shows how to compute and use the new metrics to rightsize staffing levels for projects, programs, and organizations. It also explains what every project manager needs to know about earned value tracking: its uses, abuses, value, distortions, and potential fixes. The book then extends these metrics into techniques for indexing, tracking, progressing, and improving the business value of projects.
See What’s New in the Second Edition:
- Includes new diagrams and new ways of computing critical path drag in complex networks
- Introduces DIPP Performance Index tracking
- Offers new exercises in how to compute critical path drag and drag cost and use them to maximize project value
- Focuses on topics senior management needs to be assured the project team is using to maximize project profitability
Preface
Acknowledgments
Introduction
About the author
The Nature of a Project
The definition of a project
The multiproject portfolio
The tracking DIPP: Setting the baseline for expected project profitability
Tracking EMV and the DIPP at the portfolio level
Conclusion
References
An Overview of TPC Planning
The benefits of project planning
The purpose of a project plan
A-I-M
F-I-R-E
Corollary and paradox
Empirical evidence for the value of planning when facing uncertainty
How and what to plan
Scope/cost/schedule integration
Planning and tracking the DIPP
TPC at the organizational level
Reference
Overview of Planning the Work
Quantifying the project triangle
Estimating the minimum value/cost of time
Optimizing the DIPP at the micro level
Using TPC on the MegaMan project
Conclusion
Planning the Scope
The scope document
Appendix A: Assumptions
The fused memo
Developing the Work Breakdown Structure
The OBS and the WBS
Functional versus product WBS
Breaking down the WBS
Coding the WBS
The detail-level activities
Six guidelines for developing the WBS
Two rules of thumb for the level of detail
The WBS as the tool for managing scope change
The value breakdown structure
The value of computing value
Estimating and accuracy
Scheduling I: The Critical Path Method (CPM)
History of the critical path method
Using CPM
Duration estimates
Management reserve, contingency, and padding
The impact of padding
Estimating padding
Working to the DIPP
The impact of multitasking
Quantifying the impact of multitasking
Precedence
Ancestors and descendants
CPM logic diagrams with parallel activities
The forward and backward passes
Formula for the forward pass
Formula for the backward pass
Total float
Free float
Scheduling constraints
Using CPM to optimize the schedule
Critical path drag
Computing drag
Using drag
Using drag to recover a schedule
Computing an activity’s true cost
Scheduling II: The Precedence Diagram Method (PDM)
FS, SS, FF, and SF
Lag and lead
Two more ways to shorten the project
The new product project with PDM
Computing drag in a PDM network diagram
Was PDM really an advancement?
A quick method of computing drag in SS relationships
Generating the CPM schedule for the MegaMan project
Using drag to optimize the PDM schedule
The doubled resource estimated duration (DRED)
The reverse critical path anomaly
Summary of the benefits of CPM
Other methods of scheduling projects
The Gantt chart
Backward scheduling
The program evaluation and review technique (PERT)
Monte Carlo risk simulations
Activity-Based Resource Assignments
Activity-based resource assignments (ABRA)
Assigning the resources to the MegaMan project
Project management work and costs
Total budget and starting DIPP
Analyzing and implementing the DRED
Making the scheduling decisions
TPC value scheduling
Summary
Resource Scheduling and Leveling
Resource leveling of the critical path
Resource leveling on the critical path
Time-limited versus resource-limited resource leveling
The CLUB (cost of leveling with unresolved bottlenecks)
Resource schedule drag
Resource availability drag (RAD)
The formula for computing RAD
The value of RAD
The resource-leveled schedule for the MegaMan project
Rightsizing a project-driven organization
HR and the CLUBs
Multiproject resource scheduling
Tracking and Controlling the Project
Reporting progress
The planned DIPP baseline
Variances in the actual DIPP
The DIPP performance index (DPI)
Working to maximize the DPI
Conclusion
Glossary
Appendix
Index
Biography
Bajan-born Steve Devaux is a project management theorist, consultant, and academic. He developed TPC, an ROI-based approach to project planning and analysis, as well as such new techniques as critical path drag and the value breakdown structure (VBS). He founded Analytic Project Management in 1992 and has consulted to industries ranging from software to aerospace. He has an M. Sc. in project management from Northeastern University and has taught graduate courses at Brandeis University, Suffolk University, and University of West Indies at Barbados.
"Stephen Devaux puts forth a manifesto for how project management can drive profits when projects are managed and measured as investments. Not only is Total Project Control a practitioner’s guide, it is also an executive’s overview of how to view projects and invest wisely for returns to the bottom line. The benefit of how Devaux lays out the text is that a project manager can use it a quick resource for any phase of the project without having to read it cover to cover. The first edition of Total Project Control was a breakthrough of insights into effective project management. The second edition crystalizes the concept of how projects must be considered an investment, not just a set of tasks to delivering a product or service."
— Edward R. Equi, Senior Research Scientist at MIT"This book provides a lot of food for thought on improving the decision making process which drives business value from projects. Not just from an academic standpoint, but with tools that can be implemented by the project team. I find it to be a valuable contribution to advancing the state of the art in project management."
— Bernard Ertl
"This is a very unique and interesting textbook for PM practitioners. The author proposes several new metrics such as DIPP, drag, drag cost, DRED, DPI and so on. They were developed through real world experiences and needs. Explanations on building WBS and calculating CPM are also very useful and practical. The author’s view; "the project: is an investment" will lead the readers to awareness of project values. This is very important, since the ultimate objective of project management is to maximize the project value."
— Tomoichi Sato, JGC Corporation
