Was the Project Really Late? (An Introduction to Schedule Risk Analysis)

Was the Project Really Late? (An Introduction to Schedule Risk Analysis)

Paper to be given at the 2012 Construction CPM Conference.

"The best laid plans o’ mice an’ men gang aft a-gley." (Robert Burns, 1759 to 1796)

I don’t know exactly what that means either, but Burns was drawing attention to the inadequacy of plans. We all hear about how most projects are late, but late compared to what? Compared to the project plan, that’s what. But suppose the plan is flawed? Suppose our expectations about project completion were not reasonable?

The planned project completion date is just a forecast. When the weather forecast says it is going to rain and it doesn’t, we blame the forecast for being wrong. We don’t say the weather was wrong. So, why, when a project fails to be completed on time do we blame the execution of the project rather than the plan?

Today I am going to suggest that the reason so many projects are “late” is that the original project plan was not realistic. This is not a new idea. In “Brookes’ Law Repealed”, Steve McConnell says:

"Late chaotic projects are likely to be much later than the project manager thinks -- project completion isn’t three weeks away, it’s six months away. ….…, but that’s not a result of Brooks’ Law. It’s a result of underestimating the project in the first place." (Steve McConnell, “Brooks' Law Repealed," IEEE Software, vol. 16, no. 6, Nov/Dec, 1999. Brooks’ Law states that putting more resources onto a project when it is running late will make it take even longer.)

And I am going to discuss one particular reason why so many plans are unrealistic. It is called merge bias. But before we get into what merge bias is we need to discuss uncertainty, and two more quotes:

"In these matters the only certainty is that nothing is certain." (Pliny the Elder, 23 to 79 AD)

"Prediction is very difficult, especially if it's about the future." (Nils Bohr, 1885 to 1962)

Project plans are of course about the future, and everything about the future has some uncertainty associated with it. When we say that a task will take 5 days we know that this will probably not turn out to be precisely true. We may have a small amount of uncertainty or a large amount, but we almost certainly have some uncertainty!

As a result of our uncertainty about the task durations, our estimate of project completion is just that, an estimate. It will be valid only to the extent that our estimates of task durations turn out to be true. Since there are generally many tasks, it is almost certain that many of them will take less time than estimated while others will take more time than estimated. So, in reality the project finish is likely not to be as projected by a deterministic CPM or PERT but to be somewhere in a range of dates that we might suppose to be spread symmetrically around that estimate.

Please click here to download full paper.

Associated files are Paper for Construction CPM.xlsx and Was the Project Really Late.pptx