Analysis tool helps project managers expose hidden pitfalls

Delivering a successful project on time and inside budget is a rewarding experience that can enhance your career. However, for many of us projects rarely turn out like this, and instead we find ourselves up against deadlines, distracted by minor issues and constantly firefighting. We also fail to foresee problems and then respond in a reactive, rather than proactive way, or allocate insufficient time for tasks, which ultimately leads to spiraling costs and missed deadlines. So, instead of improving our reputation with good project management, we end up jeopardizing our careers and being labeled as irresponsible managers with poor organizational skills.

However, the need for good project management, whether it is the installation of a new reactor, the design and assembly of a new product, or the merger of two fabs, is now greater than ever. This is because companies today need to provide more accurate estimations of project costs, face expensive contract penalties for delays, and often need to commit to new projects safe in the knowledge that current ones are not under risk. In addition, many companies form part of a supply chain, so any delays have wider implications, including the possible loss of future revenue.

Today, many projects kick-off with the creation of a project network detailing various pieces of information about each task, including its duration, cost, the resources needed, and which tasks must precede and succeed it. All this data is then put into a Gantt chart that presents all the tasks in a table and illustrates them graphically as bars according to their start and finish date. The Gantt chart contains an enormous amount of data, but extracting valuable information from it is very difficult.

This is because project networks are like icebergs "“ only around one-ninth is visible and so can be seen and planned for, but eight-ninths are hidden under the surface. In other words, many of the project's details are buried in its network and only rear up after the project has begun to catch us by surprise. So, in order to manage a project well, the hidden details must be exposed.

Many of today's projects involve analysis of the critical path (CP), which identifies the sequence of tasks that together last the full duration of the project and present the primary risk for the project overrunning. But what about all of the other activities, and the other paths in the network? For example, in a 12 month project, a non-critical path that lasts 11.5 months is theoretically an almost critical path, but for all practical purposes it is a critical path. Until now, no attention has been given to these "hidden critical paths" (HCPs), and they are only noticed when they expose a problem, but such surprises in real time can prevent a project hitting its deadline.

The new method for project network analysis "“ the patent-pending HCP method "“ identifies both the CP and HCP. It provides the project manager with several tools to handle the project by exposing the various difficulties that can occur along the way. The first is the HCP score, which reflects the project's complexity and robustness, and is calculated from the project network. The score ranges between 1 and 0. A project with just one CP and nothing else is the least robust, and receives a score of 1. If a project consists of many HCPs, which each have a large slack time, then the score will be low, indicating a stable project. So, if your project has a HCP score of, say, 0.94, you can conclude that it's high risk and the chances to complete it on time, on budget, and on spec are low.

Although this analysis reveals that delays to various tasks could prevent your project running on time, at least you are in a good position to limit the damage. For example, you can show the results to your management, convince them that there is a problem, and suggest taking action that generates additional time, such as delaying customer shipments. You can also redistribute your resources more effectively, because the analysis can highlight exactly where and when additional resource is required. The HCP approach can also drive a task reorganization, either in terms of running order or priority, or the breaking down of lengthy tasks into more manageable ones.

The HCP method can also expose all the hidden critical tasks within the project network that risk its completion. Until now the standard approach to uncovering a project's risks consisted of organizing a meeting involving everyone in the project, and encouraging each participant to outline their concerns regarding issues that could cause the project to miss its deadline. This would then be followed by a risk-control methodology. However, by using this HCP tasks list, there is no need to guess all the points of risk, as they are easily found. Once they are exposed, a risk-control methodology can be carried out to minimize any potential delays.

In addition, the HCP tasks list allows project managers to determine the "red warning lights" for the project's hidden critical resources. For example, the method can uncover a HCP task on a path with five days of slack that has a hidden critical resource "“ can we replace the person performing this task within five days? Or, if this task requires an expensive resource, but management delays its acquisition, the HCP analysis can show that because there are only five days of slack on the whole path, dragging the decision by more than that time can risk the whole project!

A further advantage of the HCP method is that it can locate days that have no work allocated to them. By acting on this information, time can be sliced off the project and money saved. This situation is not uncommon in big project networks. It can also identify tasks that have a relatively long duration. These "long duration" tasks are shown to the project manager, who determines whether they should be left or broken into shorter tasks. Long-duration tasks have specific difficulties associated with them as they are difficult to monitor.

The HCP method's primary strength is its ability to predict the likelihood of a project's success "“ on time, on spec and on budget. This calculation is based on the project network and its findings, which were previously hidden. This analysis provides upper management and project entrepreneurs with the ability to rapidly assess all their projects and drill down quickly and simply to the key problems "“ both the obvious and the hidden.

Project management companies and their subcontractors can use the HCP method to identify all the expected and unexpected obstacles they will face before they occur. Problems can then be addressed shoulder-to-shoulder, and solved ahead of time, rather than getting a nasty surprise when it is too late, and apportioning blame. Using these methods helps companies to build trust and form good relationships with contractors.

In addition, HCP analysis provides project managers with the opportunity to control projects in a new way. Instead of constantly firefighting, events can be controlled and problems foreseen. This can save employers a lot of time and money, and help to breed success through proficient, organized project management.