Manufacturing Breakthrough Blog

Project Management the TOC Way

Friday December 11, 2015

Today’s Post

In today’s post, I will be starting a new series of posts comparing the most popular project management method, the Critical Path Method (CPM) to TOC’s version, Critical Chain Project Management (CCPM).  So if your business relies on project management, then this series is for you.  I will demonstrate in future posts how CCPM will significantly improve your project completion rates and deliver projects on time, on budget and on scope at a rate that is greater than ninety-five percent of the time.

The State of Project Management Projects

If you have ever been involved in project management, then it’s easy to understand the frustration associated with trying to manage projects that are over budget, have missed delivery dates and, on many occasions, have not achieved the required technical objectives.  All of these issues seem to be common practice in today’s project management world – but why?  If you look closely at your projects, it appears the same type of issues seem to be happening over-and-over again.

If the issues remain the same, and the issues become very predictable, then the problem might be a direct relationship to the project management methods and tools that are being used.  If you keep using the same tools and the same methods, then it is easily predictable that you will keep getting the same results.

We always strive to deliver our projects on time, on budget and on scope and we strive for these three deliverables to satisfy our customers and to hopefully have a business that grows and flourishes!  No matter what industry segment we are in, every project has these three promises at least and if we are executing say 100 projects, we have 300 promises to keep and that’s a pretty tall order!!!  So what is the status of many of the projects being run today?  Would you believe me if I told you it’s not good?

What typically happens in today’s project management world is that usually the original due date is not met and many times resources are not available when they are needed.  There are arguments over priorities between competing projects plus there are significant budget over-runs and way too much rework.  The bottom line is many projects do not get finished on time, on scope or on budget!  So why do you think we are seeing this phenomena?

If yours is an organization that relies on project completions as their source of revenue and you’re like many other project based organization, then the results of multiple surveys by the Standish Group [1] might be of concern to you.  In 1994 they conducted a study of nearly 10,000 IT projects across America and found that 52 % of projects ended up costing greater than 189 % of the original budget, 31 % were cancelled and only 16 % of the projects were completed on time and on budget. The cost of these failures and overruns are just the tip of the proverbial iceberg. The lost opportunity costs are not measurable, but could easily be in the trillions of dollars.  Pretty scary figures if you’re in this type business.

Fast forward to 2006. This Chaos Report [2] reveals that only 19 percent of projects begun were considered outright failures, compared to 31 % in 1994. In addition, 35 % of software projects started in 2006 can be categorized as successful, meaning they were completed on time, on budget and met user requirements.  Although this is a marked improvement from their first groundbreaking report, it’s safe to say that these statistics still aren’t acceptable or at least where they need to be!

The point is, project failure rates appear to be a universal problem spanning all industry types and although these rates are improving, they still don’t rise to an acceptable level.

So the question I pose to you is this.  What if there was a way to demonstrate a method that would push your projects successful completion rate from where your rate is now, to over 95 %?  Would you be interested in hearing about it? Ninety percent of the Project Managers around the world are using a project management methodology known as the Critical Path Method (CPM) and have been doing so for many years. If you ask a typical project manager about what factors delayed a completed project, most will tell you that something they didn’t expect or even had no control over cropped up in some of the tasks and delayed them.  In other words uncertainty or the Murphy bug bit them!  Every project from virtually every environment has uncertainty associated with it and how this uncertainty is dealt with determines the ultimate success or failure of the project.So in order for a project to be successful, there must be a way to protect it from uncertainty.

Next Time

In my next post we’ll take a look at how traditional project management (CPM) attempts to protect a project from inevitable uncertainty.  As always, if you have any questions or comments about any of my posts, leave me a message and I will respond. 

Until next time.

Bob Sproull

References:

  1. THE STANDISH GROUP REPORT © The Standish Group 1995. Reprinted here for sole academic purposes with written permission from The Standish Group. CHAOS.
  2. The Standish Group Report © The Standish Group 2007

 

 

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