ProjectFlightDeck

Concept: The Independent Estimate at Completion for time (IEACt) is the forecasted duration of a project. It is the ratio between Planned Duration (PD) and the Schedule Performance Index for time (SPIt). A related metric is the estimated end date, i.e., the Independent Estimated Completion Date for time (IECDt). It is the project Start Date plus the number of periods in the IEACt.

Diagram 1

The following table shows how the thresholds are structured.

Table 1

Practice: ProjectFlightDeck uses thresholds to monitor schedule performance versus the planned finish. Similar to SPIt, red-yellow-green labels are associated with threshold values for IEACt and IECDt. The labels help the project team and stakeholders understand the implications of completion forecasts and the motivation for action plans related to the forecasts.

Keep in mind that the threshold values are heuristic, rather than deterministic. That is, they are adjusted based on experience with each project, rather than left as fixed limits. The IEACt and IECDt threshold values were explained in previous posts. Here, the response to deviations from the plan is described.

The response to deviations in IEACt /IECDt is similar to that for deviations in SPIt. Individual readings in the Contingency Zone are not an issue. The natural variation in schedule performance means that the IEACt / IECDt values will hover around the Baseline Finish Date, rarely aligning with it perfectly.

Individual readings outside the Contingency Zone are treated differently. If a reading occurs in the Reserve Zone, it may indicate a problem and deserves attention. While draw-down on Contingency is expected, use of Reserve signals increased likelihood of problems with the plan.

Dramatic (say, 20% or more) change in IEACt / IECDt from one period to the next is another call to action. Although such differences are sometimes caused by failures in reporting, we have seen cases where the project team made a sudden change in tactics, causing productivity to dive or to soar.

Threshold breaches are another worrisome type of change. Even if the period-over-period change is small, when the IEACt / IECDt moves into a zone other than the Contingency Zone, you need to take further action.

A series of related IECt / IECDt readings indicates a trend. At ProjectFlightDeck, we generally build action plans for schedule correction based on trends, rather than on individual readings. For long-running projects, we require three or more consecutive readings headed in the same direction to mark a trend. For short-term projects, we reduce the required number of consecutive readings.

Whether it is an individual reading or a trend that demands further action, the generic response is the same: identification of potential problems, root-cause analysis, action planning for remediation, and management communication. The urgency of the analysis, extent of remediating actions, and type of communication vary with the efficiency level involved and root causes identified.

In most cases, if the project status is red, the analysis is done immediately. Action plans vary widely but commonly contain rapid, and sometimes extensive, shifts in schedule and staffing. Communications reflect the seriousness of the problem and extent of adjustment required.

For other statuses, the response is essentially the same, but it is moderately paced, involves smaller adjustments, and employs low-key messaging.

Concept: The Independent Estimate at Completion for time (IEACt) is the forecasted duration of a project. It is the ratio between Planned Duration (PD) and the Schedule Performance Index for time (SPIt). A related metric is the estimated end date, i.e., the Independent Estimated Completion Date for time (IECDt). It is the project Start Date plus the number of periods in the IEACt.

Practice: ProjectFlightDeck uses thresholds to monitor schedule performance versus the planned finish. Similar to SPIt, red-yellow-green labels are associated with threshold values for IEACt and IECDt. The labels help the project team and stakeholders understand the implications of completion forecasts and the motivation for action plans related to the forecasts.

The threshold values are heuristic, rather than deterministic. That is, they are adjusted based on experience with each project, rather than left as fixed limits. The following values are good starting points for the thresholds.

Table 1

Before discussing the thresholds, some clarifications are necessary.

• For simplicity, only the IECDt is discussed here—the same points apply to the IEACt.
• A “Deadline” is the Baseline Finish Date plus Contingency. Consistent with PMI principles, it is the planned finish for the project. When Reserve days are also included, the date is referred to as the Committed  Finish Date.
• Contingency is the response to predictable uncertainty and Reserve to uncertainty that cannot be predicted. Historically, the emphasis has been on uncertainties that cause delays. But, there are also uncertainties that result in early delivery.
• Why is it important to identify uncertainties that result in early delivery? Consider what happened on a recent commercial package implementation. The timelines of a dozen projects were aligned with the planned finish date. One of the core teams, however, had over-estimated the amount of time required. When their forecast consistently indicated an early finish, the whole program had to be re-sequenced. Early is not always better.
• Uncertainties that cause delays are addressed by “late” Contingency and Reserve allowances. Uncertainties that lead to early delivery are addressed by “early” Contingency and Reserve allowances.

As shown in Diagram 1, if the IECDt is later than the Baseline Finish Date, but earlier than the Baseline Finish plus late Contingency, the project is on track to complete as planned, and it is labelled as Green. If the forecast is earlier than the Baseline Finish but later than the Baseline Finish less early Contingency, the outlook for finishing as planned is also good, and the project is again labelled as Green.

The area around the Baseline Finish bounded by Contingency is called the Contingency Zone. As expressed in Table 1, IECDt in the Contingency Zone indicates a sound plan and a good outlook for meeting the Deadline. It is labelled as Green.

As shown in Diagram 1, if the IECDt exceeds the Baseline Finish plus late Contingency but remains within the late Reserve Zone, the project is not on track to complete as planned, but it should still finish as committed. (The committed finish date includes late Reserve and is later than the planned finish.) So, it is labelled as Yellow. If the IECDt is earlier than the Baseline Finish less early Contingency, the project is, again, not on track to complete as planned and is labelled as Yellow. In the latter case, it is Yellow not because the project deadline is likely to be exceeded but because the plan seems to be unsound. After all, an allowance was made for early delivery, and the forecast makes it appear that something was mistaken--either the relevant uncertainties were incorrectly identified or the allowance was too small.

As shown in Table 1, the Reserve Zone is split above and below the Contingency Zone. If late Reserve days are required, the outlook for meeting the Deadline is poor. On the other hand, the plan appears to be unrealistic if the forecast is in the early Reserve Zone. That means the early Contingency is insufficient and that implies the plan is questionable. Whichever Reserve Zone the IECDt is in, the project is labelled as Yellow.

Finally, if the IECDt exceeds the late Contingency Zone plus the late Reserve Zone, the project will not meet the Committed Date, even if both Contingency and Reserve days are used. The project is labelled as Red. By the same token, if the IECDt is earlier than Baseline Finish less both early Contingency and early Reserve, it appears that there are serious flaws in the plan, and it is labelled as Red.  

The next post describes how to respond to deviations from the plan.

[Post Updated 06/30/15]

Concept: The Independent Estimate at Completion for time (IEACt) is the forecasted duration of a project. It is the ratio between Planned Duration (PD) and the Schedule Performance Index for time (SPIt). A related metric is the estimated end date, i.e., the Independent Estimated Completion Date for time (IECDt). It is the project Start Date plus the number of periods in the IEACt.

Diagram 1

Practice: When will the project finish?” Conventional metrics such as Percent Complete, Bar Charts, and SPI are little help, as they are not predictive. Critical Path Method and Monte Carlo analysis provide answers, but they entail significant investment of time and money. Earned Schedule offers a quick, economical way to answer the question.

The IEACt, uses the project’s historical performance to estimate the number of periods required to achieve the Planned Duration.  It projects the current rate of schedule performance over the remainder of the timeline, producing an estimate of the total number of periods it should take to finish the project. If the estimated number of periods is then added to the project’s Start Date, the result is the estimated end date, the IECDt.

The IEACt and IECDt are nominal forecasts. They do not factor in deviations that may occur. By contrast, ES also supports statistical forecasting. ES Statistical Forecasts take account of potential deviations and represent a range of probable outcomes for the project’s duration and end date. ES Statistical forecasts will be the subject of a separate post.

For ES forecasts, as for all ES calculations, a standard Performance Measurement Baseline is required. When the baseline is set, the Baseline Start Date and Baseline Finish Date are fixed. Planned Duration is the span between the Baseline Start Date and Baseline Finish Date plus Contingency.

Sometimes, there is confusion about the length of the Planned Duration. There are several sources for confusion. First, projects can actually start and finish at times different from the Baseline Start and Finish Dates. So, the span between the Actual Start Date and Actual Finish Date can vary from the Planned Duration.

Second, scheduling tools cause confusion. They automatically calculate and store current Start and Finish Dates based on dependencies, constraints, and per cent complete. The automatic calculations can ripple through dependency chains, affect overall project Start and Finish Dates, and thus change the total span. So, the current project Start and Finish dates can vary from the baseline dates, leading once again to a span that is different from the Planned Duration.

Third, consistent with PMI principles, Planned Duration includes Contingency but not Management Reserve. A detailed discussion of Contingency and Management Reserve goes beyond this post, but briefly, Contingency is the response to predictable uncertainty and Reserve to uncertainty that cannot be predicted.

Time Reserve is not embedded in the schedule. It is treated as a lump sum. Time Contingency, on the other hand, can be represented in different ways. The extra time may be embedded in the schedule through the inclusion of buffer tasks. Or, time may be added to the baseline as a lump sum. Either way, the Planned Duration is the span between the Baseline Start Date and the Baseline Finish date, including Contingency but excluding Reserve.

The IEACt and IECDt are thresholds that ProjectFlightDeck monitors to assess schedule performance.  Diagram 1 depicts how the thresholds are structured. The next posts will explain threshold values and show how they are used to manage schedule performance.

Concept: The Schedule Performance Index for time (SPIt) is the ratio between the time earned on a project (i.e., the Earned Schedule—see April 19, 2015 post) and the time actually consumed.

We gauge the efficiency of schedule performance using threshold values for the SPIt. The starting point for threshold values is represented in the following table.

Practice: The SPIt has many advantages, but it also has some limitations.

Pro:

• Easy to produce. Assuming that you are already calculating the ES metric, you have all the data you need to determine the SPIt.
• Easy to understand. SPIt measures schedule efficiency. It indicates whether or not time is being earned according to plan, and it gives us a way to gauge how well or how poorly time is being used on the project. (See Table 1.)
• Widely applicable. Because the SPIt is a ratio, it applies equally to projects of different sizes. It also applies when diverse project management approaches are in use. For instance, SPIt works just as well on Agile projects as it does on plan-driven projects.
• Lifecycle Accuracy. Unlike EVM’s standard metric, SPI, the SPIt is accurate across a project’s whole lifecycle. If the project is late, the SPIt reflects the shortfall, whereas SPI rises inexorably to end at a perfect 1.0, regardless of when the project finishes.

Con:

• Hard to predict. SPIt itself does not predict future performance. While an SPIt trend line suggests how the project will perform in the future, it does so based on impression and experience, rather than on quantitative analysis. Other ES metrics, such as the EACt and statistical analysis, function better as predictors of future performance.