Network-Based Project Management Summary

Network-Based Project Management techniques provide key insights that delight customers and offer a competitive advantage.

Benefit of Network-Based Project Management

Network-based project management techniques is a tried and tested approach that helps project managers plan, schedule, execute and control their schedule. These techniques provide a reliable and repeatable process that allow project managers to gain key insights into their projects and offer real value to their clients. Importantly, these techniques grow in step with project manager understanding and development, and provide a platform to continually enhance project professionals’ careers and reputations.

Network-Based Project Management Methodology

Work Breakdown Structure & Network Diagram

The primary benefit of network-based project methods is the development of the Work Breakdown Structure (WBS) and network diagram. The work breakdown structure reflects the scope of the project, while the network diagram developed using either the Arrow, Node or Precedence Diagram Methods (PDM) reflects the logical dependencies between activities. While the arrow diagram has fallen out of favour because of its need for individual dummies to correct false dependencies, the universally popular node diagram while more efficient and easier to learn is limited by its Finish-to-Start precedence relationship and the need to split activities to show an overlap.

Work Breakdown Structure (WBS) & Network Diagram

Precedence Relations: Finish-Start, Finish-Finish, Start-Finish & Start-Start

The Precedence Diagram Method gets around this limitation by introducing three new precedence relations – 1) Start-to-Start, 2) Finish-to-Finish and 3) Start-to-Finish and the introduction of lead/lag times. Advocates of the Precedence Diagram Method feel it is easier to understand and less confusing than splitting activities. However, the method also introduces some complexities of its own in the form of connecting arrows with several different definitions, and the resulting project calculations are not as straight forward as in Arrow or Node networks.

Precedence Relations

Critical Path Method: Forward / Backward Pass and Float

Once the project’s scope and network diagram are agreed, then the resources required to undertake each activity is defined. Subsequently activity size, effort and duration estimates are then considered and the accuracy of these estimates can be benchmarked against parametric estimates. Applying these estimates to the network diagram allows the forward pass calculation to determine the early start and finish time for each activity. Similarly, the backward pass calculation determines the late start and finish times for each activity. By calculating the difference between the early start (finish) and late start (finish) time within and across each activity allows four types of float to be derived, 1) path float (total float/slack), 2) activity float (free float/slack), 3) interfering float and 4) independent float.

Negative, Zero and Positive Float

An activity with zero path float indicates it is critical since any delay will affect the overall project duration. While an activity with positive path float means it is non-critical since any delay up to the path float amount will not affect the overall project duration. Finally, an activity with negative path float indicates it is critical, which results when either a constraint or actual date creates a schedule that is shorter than the duration calculated to complete the activities on the critical path.

Execution Scenarios and Trade-offs

Reflecting the project start date, the network diagram is translated into a schedule which allows consideration of whether the plan and schedule satisfy the time, cost and resource constraints placed on the project. If the project time constraint cannot be achieved, then it is possible to consider Time-Resource Trade-off Procedures, which examine different activity execution scenarios, i.e. single or multi-mode execution. If this approach fails, Time-Cost Trade-off Procedures are employed which reduces the project duration by buying time along the critical path(s) where it can be obtained at least cost. Unfortunately, this will always result in an increased cost. However, this is a useful tactic to employ where penalties exist for late delivery. If the resulting costs are too high, Resource-Resource Trade-off Procedures are then considered which considers lower cost resource substitution.

Microsoft Project Schedule
Project Crashing

Anomalous Critical Path Behaviour

The precedence diagram method complicates Trade-off considerations because under certain circumstances critical activities on the critical path are changed. According to the Critical Path Method (CPM), the shortening/lengthening of a critical activity on the critical path will always result in a decreased/increased project duration, i.e. the activity is normal-critical. Unfortunately, this same understanding does not apply for the Precedence Diagram Method. In some situations, changing the duration of a critical activity with a Start-to-Start or Finish-to-Finish relationship can have an anomalous effect. If a critical path passes through an activity from Finish-to-Start, then lengthening its duration will shorten the critical path, and reducing its duration will increase the critical path, i.e. the activity is reverse-critical. Alternatively, if a critical path enters and exits from the starting point of an activity (or ending point), then activity duration is independent of the length of the critical path, i.e. the activity is neutral-critical. When a critical activity has more than one critical path then changing the duration of a critical activity will depend on the combination of paths, i.e. bi-critical, start-decrease reverse-critical, finish-decrease reverse-critical, start-neutral critical and finish-neutral critical.

Critical Path Anomalies

GAO Schedule Assessment

Fortunately for project managers, the GAO Schedule Assessment Guide outlines ‘Best Practises for Project Schedules’, which includes ten best practise checklists. GAO research identified the following four characteristics of a high-quality and reliable schedule i.e. 1) comprehensive, 2) well-constructed, 3) credible and 4) controlled. This Assessment Guide includes a wealth of information including an ‘Auditors Key Questions and Documents’ section, detailed explanation of the forward and backward pass, quantitative measurements for assessing schedule health and finally some case studies.

Schedule Risk Assessment: PERT/Monte Carlo Simulation

It is generally a good idea to conduct a Schedule Risk Analysis (SRA). Leveraging the investment to develop a high quality schedule and compiling project risk data, statistical techniques are employed to 1) predict the level of confidence in meeting a project’s delivery date and budget, 2) determine the time and cost contingency needed for a given level of confidence, 3) identify high-priority risks and 4) assess the most accurate time and cost forecasting method. Consequently, assuming the need for higher project delivery certainty, the baseline schedule is adjusted for post-mitigated risk either by changing individual activity estimates else inserting a buffer for extra time and cost. Risk action thresholds can be defined which if breached during execution trigger an early warning signal to take corrective actions to recover troubled projects. Similarly, selection of your projects most accurate time and cost forecast method will ensure delivery of timely predictive signals that you can proactively manage. Therefore, whether the limited Program Evaluation & Review Technique (PERT) 3-point optimistic, realistic and pessimistic estimates is used else the more sophisticated Monte Carlo Simulation with varying probability distributions is used, the potential impact of uncertainty to the project’s final duration and cost should be assessed, adjusted and monitored.

Resource Constrained Scheduling Problem

The fundamental objective of the planning and scheduling phase is the creation of a feasible and workable baseline schedule that establishes the planned start and finish times of each activity. Naturally, this baseline schedule should satisfy the specified precedence and resource constraints and meet as much as possible the time and cost constraints. If the application of the various trade-off procedures is not successful which includes project crashing and fast-tracking, then advanced methods are employed to optimise the project’s time, cost and resource objectives or some combination thereof. Of particular management interest, is the resource smoothing and resource levelling of project demand that aid project capacity planning/management both within and across projects. Further complicating this scenario is when several projects have to be scheduled simultaneously. If resources are shared amongst projects, difficult scheduling problems result when multiple projects are planned in parallel. Fortunately, a range of sophisticated resource-constrained scheduling solutions exist; however advanced artificial intelligent and machine learning schedule optimisers are required as most commercial off-the-shelf scheduling tools lack this capability.

Project Schedule Communication

To aid project schedule understanding its necessary to produce a project diagram. Henry Gantt in the early 1900’s created a bar chart which was designed to control the time element of a project by listing the major project activities, their scheduled start and finish times, and their current status. Due to its simplicity the bar chart is now known ubiquitously as the Gantt Chart, however, its simplicity precludes 1) showing sufficient detail to enable timely detection of schedule slippages with relatively long duration times, 2) showing activity relationship dependencies making it very difficult to analyse the effect individual project activity delays have to the promised project delivery date, 3) is awkward to setup and maintain for large projects, and 4) because it is a manual-graphical procedure it has a tendency to quickly become outdated and lose its usefulness. To overcome these limitations, current good practise is to show more detail by clearly showing activity interdependencies, critical and near-critical paths. This insight allows the impact of activity completion delays to be easily determined and acted upon. This same thinking applies to a multi-project scheduling environment, where individual project schedules are rolled up into a Master Schedule.

Risk Gantt Chart

Project Schedule Updates

Once the project is underway, progress and logic updates provide a realistic forecast of activity start and finish dates. Maintaining schedule logic integrity at regular intervals is necessary to reflect actual project status. To ensure the project is updated correctly, persons responsible for updating the schedule should be trained in Critical Path Analysis (CPA) methods. Providing a status update involves the project team providing feedback on when the activity started, the work and duration performed and the work and duration remaining. To understand what work has been done and what work remains it necessary to include a status date.

Project Timesheet

Project Schedule Tracking using Earned Value Management (EVM)

Consequently, feedback is critical to the success of any project. Timely and targeted feedback enables project managers to identify problems early and make adjustments that keep the project on time and budget. Earned Value Management (EVM) has proven itself to be the most effective performance measurement and feedback tool for managing projects. It enables managers to close the loop in the plan-do-check-act management cycle. EVM integrates the management of project scope, time and cost and plays a crucial role in answering management questions that are critical to the success of every project – Where is the project up to? When will the project finish? How much have we spent? What will the project cost? Are we using our resources efficiently? Where are the problems?

EVM Performance Report
EVM Forecast Report

Project Schedule Adherence

Further challenging project management control is consideration of whether the schedule is being adhered to. Schedule adherence is achieved by reviewing out-of-sequence activities and determining whether to retain logic else override progress. Consequently, any work performed out-of-sequence indicates activity impediments else is a likely cause of rework, which increases the project risk. Since the schedule is a fundamental project management tool that specifies when work will be performed in the future and how well the project is progressing against the approved baseline plan, it is essential that tailored reports are provided to project team members and key stakeholders to aid decision-making. Fortunately, the project manager information provided is forward looking and data-driven thereby improving the decision-making process.

Schedule Adherence
Overridden Logic & Retained Logic

Project Scope Change

Finally, it is inevitable that projects will experience change. Change occurs when work progresses more quickly or slower than planned, as a result of scope changes else changes in direction and approach. The investment in designing, simulating and optimising a high-quality schedule and then maintaining it during project execution facilitates change request and impact analysis, and pending sponsor approval updates to the schedule are implemented so that it can be re-baselined.

Project Schedule Assistance

In closing, if all of this sounds complicated and confusing and you need some help, then please contact me at itierney@pminsight.com.au for an obligation free consultation.

About Ian: I have more than 20-years IT Project Portfolio experience spanning vendor, solutions integrator and customer side both for private and government organisations. I have worked for Motorola, Ericsson, Vodafone, Dimension Data and Fujitsu amongst others. I am the principal of pminsight, a boutique consultancy specialising in empowering project organisations and professionals with project data-driven insights.

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