SUCCESS DRIVEN PROJECT MANAGEMENT/SDPM METHODOLOGY
SDPM is based on a set of indicators measuring project performance and forecasting its final success, in addition to producing detailed planning, scheduling and control reports. The SDPM information system, namely the Spider Project system, supplies the project management teams with the following information:
During the planning stage:
- Project target dates, costs and material requirements that could be achieved within the user defined probabilities of success,
- Probabilities of achieving target project (and project phase) goals (scope, time, cost, and material requirements) – “success probabilities”, and
- Quantified time, cost and material contingency reserves that should be assigned to support achieving project goals with the necessary or desired probability.
During execution and control:
- Current probabilities of achieving various project goals,
- Success probability trends that are used for determining necessary corrective actions (it is worth mentioning that these trends depend not only on project performance but also on changes in project risk characteristics), and
- Current remaining contingency reserve quantities.
During project execution the project manager monitors and controls the current success probability and its trends. This trend information is the most useful for evaluating and estimating project performance and deciding if and what corrective action is necessary.
The SDPM methodology is based on the resource critical path approach. This approach has some common features with the Critical Chain/CC and the theory of constraints (Goldratt 1997) and includes:
· Calculating the resource critical path taking into consideration all schedule constraints including resource and financing constraints,
· Calculating and managing the contingency reserves (analogue of CC project buffer but with significant and important differences),
· Calculating resource constrained assignment floats and determining critical resources, and
· Project risk simulation and calculation of the success probabilities to achieve given dates and costs,
By controlling current values and trends of the project success probabilities the project managers have powerful tools that make project performance analysis very informative. It is reported by many users to be even easier than the traditional Earned Value methods.
Need for Integrated Information: Effective project planning and control requires that the information regarding project scope, schedules, resources, finances and related risks be integrated at detailed and summary levels. This requirement has been recognized for many years but it has not often been achieved in practice.
Integration Methods Used in SDPM: Integrated scope, schedule, financial and risk management for projects is achieved in the SDPM approach using these methods:
1. Scope is defined systematically using appropriate multiple breakdown structures that inter-relate all project information. The work scope or volume is estimated for each task, work package, or activity, together with the types of resources required and the planned rate of usage or resource productivity for each activity.
2. Sequential, logical dependencies of work and deliverables are defined using appropriate network planning methods.
3. Resources are:
a) defined as consumable and renewable; they can be utilized and produced on project activities,
b) estimated as independent units, units in teams or crews, or interchangeable units within assignment pools;
c) assigned to project activities; and
d) considered as constraints when their limits of availability are reached in calculating the project critical path, in both forward and backward pass calculations.
4. Activity durations are calculated, when appropriate, by combining work scope or volume with resource usage or productivity rates.
5. Risks are calculated by simulating risk events and using a range of three estimates where appropriate for 1) work scope and volume, 2) resource usage and productivity rates, 3) activity duration when estimated directly, and 4) calendar variation for weather and other factors, to produce predicted probabilities of success in meeting the desired target schedule dates and budgets.
6. Project schedules are produced in the usual manner by processing the network plans, but most importantly the true resource critical path is calculated to reflect logical and all schedule constraints, including resources, in both the forward and backward pass calculations of the network plans. This has become known as the resource critical path/RCP to emphasize that resource constraints have been used in determining which activities are truly critical to project completion, and in the calculation of available float or allowable delay.
7. Actual expenditures of time, money, and resources are compared with plans, schedules and budgets to enable effective project monitoring and control.
8. The current probabilities of success in all areas (schedules, resources, financial) are calculated, and their trends are determined and presented graphically through analysis of frequently revised and retained project plans. Initially the desired targets for project dates, costs, and material or other resource requirements are calculated based on the desired probabilities set by the project manager and planner. When the target data are set, then the system calculates and the project planner evaluates the probability of their successful achievement.
Risk Simulation and Assessment in SDPM: Risk assessment can be accomplished in the SDPM approach using either Monte Carlo methods (many repetitions using random number generators) or using range estimates, usually three: optimistic, most likely, and pessimistic. The choice of which method to use in a specific situation depends on several factors.
For details regarding the capabilities of the Spider Project application package please click here.