Practical interpretation of the method and indicators of mastered volume

1. Introduction

Methods of mastered volume (MOO) 1 2 - technology is run-in and, unequivocally, effective. However, deciding to apply it, one should keep in mind several obvious and known limitations, which greatly reduce its efficiency factor and its efficiency.

First, it should be applied only after a certain part of the project has passed (about 15% -20% 3. This handicap is necessary so that sufficient statistics on the work already done has been accumulated and indicators included in the methodology, such as SPI / CPI, could be safely trusted.

Secondly, it is the basic indicators of the IPO that do not take into account the coherence of projects between themselves and the impact of force majeure events on the results of the project being monitored and future tasks. For example, if a key developer suddenly becomes ill or unexpectedly leaves on urgent business, the deadlines for the current project are broken, and the deadlines for subsequent work that are planned for him but are not monitored are shifted. Due to the fact that planned tasks are in the “future” category, their indicators are not measured. Nevertheless, the failure that occurred on them in the future will also be reflected.

That is why, applying MEA in practice, one should take into account these risks and remove the restrictions that were outlined above. Consider this principle on the example of some IT company engaged in the implementation of projects in the interests of the customer.

It is clear that in one short article it is impossible to fit the whole range of risks that project managers and production departments face in their daily activities. Nevertheless, this example will allow you to find out how to see in advance the “rakes” carefully laid out by reality, and bypass them without breaking the production processes.

2. Model of the project activity of an IT company

Consider a company whose project unit consists for simplicity of the following departments:

Department of analysts and architects;
Two development departments, each of which develops its own set of products used in the company's projects;
Testing department;
Implementation department.

The company’s portfolio includes N projects, their number is determined objectively according to the principle “how much it will be possible to carry out at a time, without overloading employees” The terms of work on each stage of the project and the duration of their implementation were determined. The resources of the departments are also tied to the tasks in the projects.

The project office of the company consists of at least two people, each of whom is responsible for their part of the project portfolio.

3. The main risks in the implementation of the project portfolio

Let's look at this model from a position of the head. It would be logical to ask what problems may arise in the course of work and what can be done to avoid them.
The scourge of almost all design organizations is a “departure” from the budget and specified deadlines. What is interesting, by and large, the backlog from the stated dates and budget overruns occur for quite predictable reasons:

The first reason: the volume and cost of work in the current project and in the future are estimated on the basis of an optimistic model, without taking into account possible force majeure or the degree of complexity of the project taken concretely (and not abstractly). Suppose the company has successfully completed 10 projects just in time for 1 month. The eleventh project manager takes, setting a deadline similar to the previously executed. If the complexity of the project is higher, or during the work on it any force majeure happens, the indicated period will be broken.

The second reason: the delay in financing external work, the results of which depend on the entire success of the project.

The third reason: various resource conflicts (we mean all types of resources, financial labor, etc.).

The fourth reason: errors, due to which part of the resources intended for the implementation of the project is irretrievably lost. For example, they suddenly reduced the budget or executors are required to buy equipment or pay for the work of third parties, and those in turn raise the price.

If one or more of these risks are triggered, the customer and the developer immediately begin to look for "the best solution of the worst", as there is a shortage of resources and time trouble. The situation is ineffective, unpleasant, and nobody wants to repeat it. Nevertheless, she is, so to speak, prone to repetition, despite all the efforts of the head to prevent it.

4. We look at the situation from the other side.

In the film “The Prisoner of the Caucasus”, a phrase was sounded that perfectly describes the model of identification of typical errors: “He who interferes with us will help us”. Accordingly, in many projects one can notice the following common features:

At the stages of planning and analyzing tasks, the same employees with the same level of competence are usually evaluated, so the percentage of errors or the likelihood of “falling out” of the deadlines can be predicted in advance, making it a stable indicator;
At the stages of implementation, on the same tasks, people on average work stably, again, introducing a stable error in the work plans;
Due to the fact that employees are specialized in departments, they carry out tasks also planned according to similar principles.

That is, summarizing - the employees work tomorrow in the same way as they did today (1) .

This statement, of course, needs to be checked in each case. It is necessary to periodically check the planned and actual deadlines for completing the tasks, as well as the volume of work per department. If the ratio of the plan to the fact is stable, then this hypothesis can be used.

The second, but no less important part, helps to build a complete project management system - a unified picture of the future for all projects, which will significantly reduce the time for discussion of the project and the number of disagreements. This is especially true in situations involving resource conflicts. It is reached agreement that: assessment of the state of both the individual project and the portfolio as a whole is assigned to an automated system that uses the raw data entered by the employees. Based on these data, a forecast is formed (2) .

At the same time, the used volume indicators are used. For example, as shown in the figure below.

- scheduled tasks
- forecast tasks
- scheduled payment
- forecast payment.

The next point that allows you to predict in advance potential problems is an understanding of the connectedness of tasks performed in the process of work. That is, the manager must understand that if a task may require more time and resources to implement, then those following it will automatically fall under the risk of rescheduling or a shortage of resources.

5. Actually on the application of the method of mastered

Now we move from abstract fabrications to the practical application of the methodology. For this you need to solve the following tasks:

Describe the main risks, to prevent the consequences of which you can use the method of mastered volume;
Formulate the very methodology and algorithms for its use in a usable form.
The main risks are:
Resource conflicts arising due to the fact that two or more projects are applying for a resource at the same time.
The risks of lack of resources at the scheduled time: labor, financial, etc. The project may be faced with a delay in the delivery of goods or services necessary for the implementation of the task.
The risk of under-utilization of resources, for example, if the salary is paid regardless of the results or without reference to meeting the deadlines of the project.

How to identify these risks and help the company avoid them? Firstly, it is necessary to assess the situation in the future, and not just for the day to come. Imagine that a problem can theoretically arise, and secondly, understand what actions are necessary so that this negative situation does not occur.

It is for identification of risks that it is most convenient to use the method of mastered volume. In practice, the project manager must have the tools to control and manage the risks of project activities. We list the main points in the list of tools for such control.

5.1 Security of the project with financial resources

Estimated on the basis of projected values for the payment schedule. The estimated period is the period from the current time to the estimated time of completion of the project. The task is to view the schedule of planned payments and compare it with the actual forecast for payments.

When forecasting, the project’s budget is sufficiently suited for its successful implementation in the event of delays in the next scheduled payments, as well as the amount of funds transferred between periods. Among other things, for the future it is necessary to estimate the balance in the budget after the completion of the project.

5.2 Project workforce

Estimated on the basis of the project needs for labor resources in the same period (from the current time to the estimated time of completion of the project). The assessment imposes the predicted load on the resource pool and the time required for the implementation of the planned tasks.

If there is an overload on any of the resource pools, it must be demonstrated to the project manager. The task at this stage is to reschedule tasks that are not taken to work according to the FIFO principle. At the same time, it is necessary that the predicted deadline corresponds to the previously scheduled completion date.

Accordingly, if potential underload is identified by any of the resource pools, the project manager can automatically balance the load according to the FIFO principle.

In cases where it is impossible to use automated collision resolution, project managers are invited to jointly re-plan the load on the resource pool.

6 Practical use of indicators

For individual projects and for an integrated portfolio, it is necessary to build a reporting system that will allow assessing the state of current affairs and the work of the company as a whole. Project managers will be much easier to manage the risks associated with labor and financial resources.

6.1 Assessment of the project status

Assuming that the project is proceeding normally most of the time, it will be optimal to show the status of the project through an assessment of the scope of its implementation and predictive situations that may adversely affect its timely completion with appropriate color markers indicating the degree of negative impact on the end of the project.

6.2 Assessment of the portfolio

The easiest way is visualized in the form of a panel, the main idea of which is borrowed in the projectprofiler 4 , which highlights the general state of the portfolio and summary information for each of the projects. To calculate the position of the project in the SPI-CPI coordinate system (where SPI is the X axis, and CPI is the Y axis), the corresponding values are calculated using the formulas in Section 7.

6.3 Financial Risk Management

Principles of operational management of financial resources:

Principle 1. "Release of unused funds." It is necessary to periodically assess opportunities for the presence of unused amount of finance, provided that the task is fully completed, and suggest that project managers complete such funds and clarify the actual funds spent marking the remaining ones available, which, for example, can be used to speed up the solution of any other tasks on current or other projects. This is achieved through the construction of a report on the sufficiency of the budget in the project / portfolio in the period t + i - t - current time, i - number of quarters - calculated at the project level as the difference between the amount of obligations by the specified payment date and the payment schedule by the corresponding date relevant article.

Wherein:

if the deviation (forecast - plan) of the amount at the end of the current planning period is within (10-15%), and at the end of the next planning period is within (15-25%), then the heads of the relevant projects are invited to adjust the plan project in such a way as to return the predicted value in an acceptable framework.
if the deviation (forecast - plan) exceeds the above values - the decision by one manager will most likely fail and all who may be affected by this decision are connected to the decision.

Principle 2 “Deficit Control”. It is necessary to analyze the used volume by task and to predict a lack of finance in quantitative and time dimensions, on the basis of which to offer project managers to take any actions to save or initiate changes in the project (to admit).

The analysis is performed by comparing the balance of the article limit with the projected amount of expenditure on this article at the date of the end of the calculated planning period. The forecast amount of expenditure on the item is calculated as the predicted value of the utilized volume of the corresponding item at the date of the end of the planning period, taking into account all the predicted values of necessary expenses, currency exchange rates, rates for suppliers and payment schedules. Wherein:

if the deviation (forecast - plan) by the amount at the end of the current planning period is within - (10-15%), and at the end of the next planning period is within - (15-25%), then the respective project managers are invited adjust the project plan in such a way as to return the predicted value to an acceptable framework, or to fix potential savings in the relevant period;
if at the time of payment a deviation is recorded (plan - fact> 0) or deviation (forecast - plan) on the amount at the end of the current planning period goes beyond the above, then this deviation is automatically marked as savings on the corresponding expense item.

6.4. Human Resource Risk Management

Principles of operational management of labor resources:

Principle 1 “Load Leveling”. Opportunities for rescheduling tasks (sites with a forecast availability of free resources) are periodically assessed, for one pool of resources so that one task assigned to this pool starts immediately after the previous one as follows:

during the initial planning of project tasks, the tasks are aligned according to the planned and actual completion of the work, and in the event of a resource conflict:

- if the deadlines for completing the task, taking into account re-planning without using principle No. 2, fit into the planned deadlines for completing the project, the task is assigned to the new dates and they are reflected in the WBS;

- If the deadlines for completing the task, taking into account re-planning without using principle No. 2, do not allow the project to be completed within the planned time frame, then the WBS reflects the result of resolving the resource conflict with the participation of project managers.

in case if any of the tasks according to the forecast is completed earlier than the scheduled date, the task in turn is automatically assigned to the executor, which is reflected in the WBS.

Principle 2 "Recycling". We assume that without significant damage to health, employees can quickly process up to an additional 2 hours per day and 3 out of 4 pairs of days off per month (10 hours each). Accordingly, agreements between project managers of production departments for projects should be based on the following principles:

minimization of mutual influence on WBS projects;
fair consideration for the use of resources.

For example, “project 1” needs to return 90 h / h to return to the CIC schedule. To solve this problem, he turns to the "project 2", in which all resources are normally planned and there are no delays. Then “Project1” will need to pay additionally:

124 h / h resources at the standard rate, which is 56 h / h (7 working days) at the standard rate and (20_ output + 14_working per working day) = 34 h / h at the double rate;
"Project 2" 88h / h at the standard rate to compensate for 44 h / h of processing on weekdays and work on weekends.

Principle 3 "Temporary expansion of the pool of resources." It is necessary to evaluate the possibilities of reducing the time of tasks, with fixed labor intensity (resources with low load are not the period of the task), by one pool of resources so that one task attributable to this pool can be implemented in a shorter period with reflection of the results for such tasks in WBS .

Principle 4 “Release of unoccupied resources”. It is necessary to assess the opportunities for the release of labor resources on the condition that the work on the task is completed and to mark the resources found in this way as free in the project plan.

Principle 5 "Fixing an objective delay." It is necessary to assess the likelihood of delay on related tasks and, when it is found, propose either reschedule tasks or exchange resources between two tasks, if possible, by communicating two project managers.

7. The adjusted method of calculating the mastered volume

7.1. Initial data

The following data is required for the calculation of the used volume indicators:

Project budget: limits on items and planning periods;
Calendar Resource Plan (WBS);
Current and forecast exchange rates (in case goods or works of foreign companies are acquired);
Data on the tasks of the projects: planned and actual deadlines for the completion of tasks, write-offs, as well as linking payments to WBS tasks;
Resource pools% of their allocation by period (for labor resources - work capacity).

7.2. Forecast Values

In case the main hypotheses

(1) the stability of the work of employees (rather, the stability of the distribution of planning errors) is confirmed as a result of checking statistics,
(2) managed to agree on a single picture of the world,
then nothing prevents the transition to forecasting the use of labor resources, adjusting the planned duration of the task, depending on the indicators of the plan / fact of resources involved in its implementation. Namely:

7.2.1. The estimated duration of the project task in the WBS

With number k in the project with number - calculated on the basis of write-offs, reflecting the actual duration performance of work on this resource pool, incl. and in other projects (which is correct, because the assessment error is unlikely to change when it is evaluated by the staff of the same team).

The calculation is performed by preliminary calculation of predicted values for open tasks in the context of the involved resource pools ( i ):
Where - the fact / plan ratio is defined as follows:

here q = 0, .., 3 is the number of quarters for which the forecast is made relative to the current period, while for overdue tasks q = 0 , and - averaged over the past 3 months, the score for all tasks in which the i- th resource pool participates. For closed tasks .

I.e:

if it is possible to estimate on the basis of current data on the current task - it is taken,
in the absence of current data - the average estimate based on data for three months,
in the absence of data it is considered that the forecast is identical to the plan.

The forecast end of the whole task will be calculated as
where i are the resource pools involved in the implementation of the task.

In case the task is completed completely, then the predicted closing time coincides with the actual:

Thus, for each point in time, the forecast dates for the completion of each WBS task are determined.

7.2.2. Expected completion date of the project

Calculated based on the current WBS based on the forecast deadlines for completing tasks. used instead of planned values :

7.2.3. Predicted value of utilized volume

In the project with the number k at the moment of time t - it is built on the basis of a comparison of the actual / forecast progress in the implementation of the objectives of this project with the planned one. The calculation is made by preliminary calculation of the predicted values of the volume of the project ,
Where reflects the labor costs of the project k actually incurred or predicted by the time t based on the forecast deadlines for completion of the tasks, see paras. 7.2.1 and 7.2.2).

Accordingly, the planned value of the volume of the project by the time will be calculated in the form

,
where it reflects the planned work on the project to the point in time.

Accordingly, the value of the utilized volume (SPI):

7.2.4. The predicted value of the dynamics of cost management

In the project with the number k at the moment of time t - it is built on the basis of a comparison of the actual / forecast progress in the execution of the payment schedule of this project with the planned one. The calculation is made by preliminary calculation of the estimated values of the project costs incurred by the time t :

Where reflects the costs of the project k actually incurred or predicted by the time t , taking into account the predicted value of exchange rates by this point, based on the forecast deadlines for completing the tasks, see paras. 7.2.1 and 7.2.2). Accordingly, the planned cost of the project k to the point in time t will be calculated in the form: