Helping Project Managers Succeed.

Project managers often struggle with the obvious question for any project endeavour - when will the project finish? While the traditional method for calculating a project finish date - critical path method (CPM) can produce an estimate, it fails to allow for the variations in the task durations that happen as a natural consequence of task estimation.

This is where Schedule risk analysis comes in. This is a statistical analysis of the project plan,  reviewing many different paths through the project using simulations. Each simulation models the various estimates for tasks, typically based on best, expected, and worst case estimates  for durations of activities.  The finish date of the project is then recorded and the analysis is repeated, many many times, to provide a spread of outcomes.  Eventually the project manager is presented with a range of possible end dates, and a likelihood of achievement.  The process of repeated assessment, using random durations is known as Monte Carlo Analysis. 

This technique immediately gives a benefit to the project manager. It provides an allowance of variability in the schedule. These variations are often forgotten, even if previous lessons learned from similar projects were were reviewed. Additionally, teams often struggle with reporting a worst case estimates when there is pressure of competition. This method makes that easier, without allowing an overly cautious approach to dominate the process. 

Using the outcomes of this simulation process allows the project manager to use a mature language when describing the risk profile of the project. This can set expectations fairly with the project stakeholders, using facts rather than best guesses and  emotions.

Understanding the project risk profile is invaluable for any project executive and allows for informed decisions when setting project tolerances regarding time. Use of this technique allows fact based decisions regarding risk tolerance by project executives.

 The Monte Carlo Project Simulator allows project managers to simply and effectively follow a 3 step process to model the projects schedule risk profile. The project manager first prepares the usual critical path method Gantt chart in Microsoft Project.  Next the variation information regarding estimates and other external risk information is gathered. The Simulator allows a very simple way of data entry in line with the project plan using Excel. Once this is complete the project manager can perform a number of simulations to look at the range of outcomes for the project.

Tasks are also assessed to understand how influential they are with respect to teh project finish date. This is invaluable information for controlling the project as it indicates where the management focus needs to be.

There are many benefits to this sort of simplified modelling. The approach will help all project stakeholders with the following:

• Understanding likelihood of the baseline finish date
• Working out what contingency and tolerances are required
• Determining the tasks that are most likely to influence the project outcome
• The tool is simple to operate so takes little training
• It can work on the schedule as it changes and develops through the project lifecycle
• It forces project managers and teams to consider hidden schedule variability
• It allows value for money decisions when evaluating the cost of risk mitigations
• It avoids unnecessary caution