Project Management in Practice

Beyond the alphabet soup of PRINCE2, MSP, PMBOK, ITIL, Agile

Tag Archives: Earned value management

PMBOK or PRINCE2 … which one is better?


I often see debates on project management forums on LinkedIn, blogs and even at the water cooler around the office regarding what project management methodology is best. I have often wondered about the wisdom of such discussions. The two that are always compared are PMBOK (Project Management Body of Knowledge) and PRINCE2 (Projects in Controlled Environments Version 2 – 2009). One such discussion with a fellow professional led me to have a little bit of a think.

PMBOK Process Model – Credit: PMI

I will declare my hand at the outset. I have squarely gone for certification route through the Cabinet Office products for project, programme and service management (PRINCE2, MSP and ITIL). This is not necessarily because I was convinced these were the best frameworks, but my assessment of what the market around me considered more valuable. With the Australasian market following that of the United Kingdom and Europe, it made more sense for me to pursue this line, than the PMBOK based certifications from the Project Management Institute (PMI) in PMP and PgMP.

PRINCE2 Process Model – Credit: ILX

Genesis of PMBOK is in the engineering sector in North America. I can see that has led to significant emphasis on the tools and techniques of how to manage projects. I find it has excellent guidance in what it calls the knowledge areas. For example, it provides techniques for monitoring and controlling projects through Earned Value Analysis (EVA), estimation through the Program Evaluation and Review Technique (PERT) analysis. It elaborates on Precedence Diagramming Method (PDM) to identify sequencing and various lag options. It has tools and techniques for scheduling using Schedule Network Analysis, Critical Path and Critical Chain, discusses Resource Levelling and What-if Scenario Analysis. Tools and techniques is where PMBOK has it all over PRINCE2, which goes very little into the skills required to be a project manager.

PRINCE2 began with a desire to control capital IT projects in the United Kingdom. Interestingly, a methodology that began in such a technical sphere has very little in the form of guidance through tools and techniques. PRINCE2 is very strong on project governance. Its strength is in the focus on the continued business justification through a living Business Case. In managing by exceptions, it removes the temptation for death by project reports, but at the same time provides a mechanism for escalating when necessary. In managing by stages, it builds in regular reviews of whether the business case the project is trying to deliver to be still valid. The biggest outcome of this is the assertion that a project unlikely to deliver to business case is better cancelled than meandering along. Project structure and principles also ensure projects are delivering to strategic initiatives of the organisation.

I have previously posted about the challenge in implementing PRINCE2 as the project framework for supplier organisations. I have used the principles rather than exact implementation as described in the text. It is much easier to take the PMBOK tools and techniques and implement directly into your projects in a supplier context. PRINCE2 however does a better job of risk identification and management techniques with the various response options and planning. There are also pros and cons about the accreditation methods. PRINCE2 is often criticised for allowing potential non-practitioners to get certified because of its examination only method. In order to get a PMP accreditation, you have to go through a significant effort to prove hours under the belt. That is a good idea. But you have to accumulate Professional Development Units (PDU) to stay current. I have seen plenty of mickey mouse outfits dispensing PDUs like confetti to have any meaning to these.

When I consider all of this, it appears a futile argument from those in either camp. In my view the best option is to use PRINCE2 to understand “how” to run the project and PMBOK for guidance on “what” to do in the specific scenarios. The question is not one of PMBOK or PRINCE2, but how to use both in your projects.

Managing Projects Better


This is a presentation that I did to management a few months ago with the aim of continually improving the operations of the project office. I thought it would be a good thing to share with the community.

Managing Projects Better

View more PowerPoint from Shoaib Ahmed

Your feedback is most welcome.

What do I do in a failing project


I was reading a report from Keith Ellis from IAG Consulting that only one in three software development projects in the US actually makes it to completion. Larger the organisation, higher the chance of cancellation. Regardless of the reasons behind the cancellations, it means as a project manager, time will come when you will have to deal with a project that is headed south. What do you do when you find yourself in such a scenario?

In my experience, the first casualty of any project going in the wrong direction is documentation. This is the most fatal mistake of all if done with project management artefacts. Once things start going downhill, you as the project manager is the one under the gun, regardless of reasons. You are the easiest scapegoat.

The only way to protect yourself is to ensure that you capture all decisions made in the project. The odds are, many of them will have been made by people under or over you, for operational and strategic decision. While you can influence decisions made by people under you, you may or may not have decisions coming from above you. Get into the habit of building a dashboard early in the project and update each week with actuals. Use a standard repeatable technique to analyse the health of your project. I use the Earned Value Analysis technique. Use something that you trust.

If you are in a project where resources are contested, clearly outline the resources that you require to deliver within the tolerances afforded to you in terms of time, scope, budget, risk, quality etc. If resources are pulled from your project, clearly articulate the affect of that in delivery terms. Measure that to time delayed or cost added. I find if you can equate it to a dollar value, it clearly gets the attention of management.

Run a strong and vigilant risk and issue register. Make it visible and encourage your team to actively participate in it. In my view lack of focus in this area is usually a cause of many projects sinking. While you cannot foresee every risk, a good project culture will ensure your team will pick up more than you think.

Remember, cancelling the project is not always a failure. There can be many reasons why the project may no longer be desirable now. Things may have changed from when the project started. If you have done your job well, you can be really successful by ensuring a project does not continue to meander along, wasting time and money when there is no possibility of achieving the benefits it was conceived to achieve.

Big obvious cock-ups will claim its victims in spectacular fashion. Those are highly visible and unlikely to take your scalp. It is the slow bleeds that you need to prevent. No one remembers those and when a scapegoat is required, you’ll be wearing the cross-hair.

How do I know if my project is going well?


Cost Variance

What is the main job as a project manager? If you go by the PRINCE2 manual, it will tell you my job is to control the 6 parameters in a project – time, cost, quality, scope, risk and benefit. Let’s look a bit deeper.

Schedule Variance

In most cases, unless you are part of a portfolio of projects, most likely you as a project manager won’t be responsible for the benefits realisation. This is there to ensure the project is always concerned with delivering to the business case as closely as possible. With risks you can plan and have management strategies and specific budgets. If it is outside your tolerance levels, you have the project board to get direction from. You can tightly control scope through the mechanism set out for your project – either the project board itself or a designated change authority. Quality management is one area where PRINCE2 is quite prescriptive and actually provides a mechanism.

When you think about it closely, the two things that will set you apart as a project manager is on time, on budget delivery. Usually most project boards are willing to consider some amount of off-specification or compromise on quality. When time is impacted, you cannot bring the project back to equilibrium without compromising one of cost, quality, scope or quality.

Cost Performance Indicator (CPI)

Schedule Performance Indicator (SPI)

Where you or the project board may need to compromise may depend on how far the project is likely to be delayed and what the projected cost will be under the current scope and quality. It is very easy to know that the project is 2 weeks behind. Does that mean that the project will be delivered only 2 weeks later than scheduled? If you delve down into the reasons for the delay, the most likely causes are underestimating efforts or risks. It is more likely rest of the project will follow the delay pattern you’re seeing than what you had originally planned. So how do you measure the most likely completion date and cost?

Project Health

This is where Earned Value Analysis (EVA) plays a huge role. In your role in monitoring project progress, reviewing this pattern is critical. Say you are part of the way through a project. So far you have completed work that you had planned 758.55 hours to complete. In fact it has taken you an additional 34.70 hours to achieve this. This is your schedule variance. It is obvious that you’re spending more than what you planned. This on its own does not necessarily indicate the project is in trouble. In fact, the reason you may be producing the additional output may be because you are significantly ahead of schedule. Using less hours is also not necessarily an indication of being on track. You may be burning less hours than planned and as a result falling further behind in your project.

Project Health Over Time

To get a better sense of this, compare how much of the schedule you expected to be through at the current date. In the project I am using to illustrate, I had expected to complete about 786 hours of earned value (completed tasks). This tells me I am also behind on schedule. How far ahead or behind schedule and cost I am can easily be calculated by calculating the SPI and CPI indicators. If you multiply the two, you get an accurate reflection of where your project is. In my case here, I’m slightly behind on both cost and schedule.

CPI is critical to forecast what your likely final cost would be, based on current status of the projects. The fact that the estimates in the project so far has been slightly less than what it has taken to implement them, means the other estimates are also out. Plot the project health indicators each time you monitor progress. It will very quickly give you a feel for the status. Any single week’s assessment may not give you an accurate reflection of where you are.

Estimated Final Cost

Project estimates, especially in software development, is an art rather than science. If you get within 5% of time and cost, I think you have been successful. Therefore, I consider anything around 0.95 x 0.95 = 0.9 to be around the low side of acceptable result. Ideally you are not out by 5% on both counts. A project health score of 0.95 would be an outstanding achievement. How do I calculate what the likely final cost is? Divide the original planned cost by the current CPI. Based on current rate, this is what the final cost will be. Estimating final scheduled delivery is slightly more complex, as you have to consider the critical path. If the progress is ahead of schedule in tasks outside the critical path, in reality you won’t gain any schedule reduction.

The most crucial part of a project manager’s job is to ensure professional management of the project itself. The key to achieving this is ensuring anyone responsible for making decisions about the project is fully aware of how the project is progressing. Something running behind schedule and cost should not come as a surprise near the end of the project.

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