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Successfully Managing High Risk, Critical Path Projects

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Title: Successfully Managing High Risk, Critical Path Projects


1
Successfully Managing High Risk, Critical Path
Projects
  • Lawrence Oliva
  • Director, Infrastructure Project Management
  • CSC PRIME Alliance

2
Introduction
  • 16 Of All Projects Started Complete Successfully
  • (Schedule, Budget, Deliverables) 1
  • Top Five Reasons For Failure
  • 1) Incomplete Requirements
  • 2) Lack Of User Involvement
  • 3) Lack Of Resources
  • 4) Unrealistic Expectations
  • 5) Lack Of Executive Support
  • Typical Cost Overrun Of 189
  • Typical Schedule Overrun Of 222

1) Standish Group, 1995, study of 365 companies
and 8380 IT applications
3
Introduction
  • 5 Of All High Risk, Critical Path Projects
    Started
  • Complete Successfully 1
  • Top Five Reasons For Failure
  • 1) Unrealistic Expectations (Schedule, Cost,
    Functionality)
  • 2) Insufficient Funding
  • 3) Poorly Defined Objectives
  • 4) Incomplete Requirements
  • 5) Lack Of User / Customer Collaboration
  • Typical Cost Overrun gt 250 (For Completed
    Projects)
  • Typical Schedule Overrun gt 280 (For Completed
    Projects)

1) L. Oliva Independent research, 2001-2002, on
profiles of 100 HRCP projects
4
HRCP Projects Are Increasing
  • Companies Are Reducing Technology Budgets,
    Leading To Fewer, But Mission Critical Projects
  • At The Same Time, Technology Continues To
    Increase In Complexity, Making Projects More
    Difficult...
  • Simultaneously, A 95 Project Failure Rate Has
    Decreased The Number Of Experienced PMs
    Available To Lead HRCP Projects
  • Its An Interesting Paradigm!

5
Working Definitions
  • High Risk
  • Activities Have A High Risk Of Failure Due To
    Factors Such As Scale, Scope, Technology,
    Schedule Or Final Deliverable
  • Critical Path
    Every Sequential Task
    Planned With A Minimum Duration, Without Planned
    Schedule Slack

6
Profile of HRCP Projects
  • Project Contains Many Unknowns (Technology,
    Political Objectives, Resource Availability,
    Scope, etc.)
  • Project Failure May Lead To Significant Financial
    Impact Or User Injury Often Within Public View
  • Time Frame Is Immoveable (Y2K or Budget Year)
  • Deliverables Are Large () and Desirable
  • May Involve Public Or Worker Safety
  • May Be Mandated By Law, Society or Nature

7
Recent Examples of HRCP Projects
  • Pentagon Reconstruction (In One Year After 9/11)
  • World Trade Center Cleanup (9 m vs 24 m Estimate)
  • TSA Baggage Inspection Program (435 Airports By
    12/31/02)
  • Power Restoration Efforts after 8/03 Northeast
    Blackout
  • California Governor Recall Elections
  • Brentwood (DC) Post Office Anthrax
    Decontamination
  • Hunt For Snipers In Washington DC Area (Oct 2002)
  • Search And Recovery of Shuttle Columbia Vehicle
    Crew

8
Why High Risk Projects Go Critical Path
  • Initial Planning Was Inaccurate
  • Unplanned/Undocumented Scope Changes C.O.s
  • Unplanned Events Happening Outside the Project
  • Key Personnel Changes
  • Technology Failures
  • Unexpected Financial Conditions/Changes
  • Lack / Loss Of A Dependable Executive Owner
  • Critical Supplier Failure Or Contractual Default
  • Failure Due To Cascade Effect

9
Five Common Aspects of HRCP Projects
  1. Underestimation of Problem Complexity
  2. Unclear Requirements And/Or Deliverables
  3. Lack of Proper Change Controls
  4. Underestimated Resource Levels
  5. Cumulative Small Failure Cascade Effect

10
Five Common Aspects of HRCP Projects
  • Underestimation of Problem Complexity
  • Non-technical Experts Established Unrealistic
    Initial Goals/Timeframe
  • Lack Of Knowledge About Large Scale Project
    Management Methodologies
  • Lack of Technical/Operational Knowledge About The
    Problem(s) Or Solution(s)
  • Exuberant Optimism For The Schedule
  • Management Not Aware Of Their Responsibilities
  • Political Agendas Driving Actions

11
Five Common Aspects of HRCP Projects
  • Examples Of Underestimation of Problem Complexity
  • FBI Trilogy Project Is Running 100 Million Over
    Budget And 1 Year Behind Schedule Due To
    Technical Complexity
  • Denver Intl Airport Baggage System Ran So Far
    Over Schedule It Caused A Delay In The Airports
    Opening Completion Took 200M More Than Budgeted
  • Production of HDTV Receivers Delayed For Three
    Years Due To Content Owners Fear Of IP Theft By
    Viewers Using PCs
  • Hershey Foods Deployed New SAP, Manugistics and
    Siebel App Suites At The Same Time in 1999
    Inaccurate Inventory And Sales Mistakes Caused
    Losses Of 150M

12
Five Common Aspects of HRCP Projects
  • 2. Unclear Requirements And/Or Deliverables
  • Requirements Are Unknown To Project Team
  • Requirements Appear To Be Obsolete Or Inaccurate
  • Deliverables Appear To Be Constantly Changing
  • Lack Of Documentation About Deliverables
  • Requirements Developed Without User, Customer, or
    Stakeholder Involvement
  • Contracts Not In Place To Pay For Deliverables

13
Five Common Aspects of HRCP Projects
  • Examples Of Unclear Requirements Or Deliverables
  • TSA Screener Hiring Program Cost Increased 722
    Due To Lack Of Clear Requirements (100M to
    722M)
  • Lack of Clarity About Which Standard Measurement
    System To Use Causes Crash Of Mars Climate
    Orbiter (125M)
  • Ariane 5 Rocket Exploded In 1996 Because Software
    Flaws That Caught A 64-bit Floating Point To
    16-bit Integer Conversion Decided To Shut Down
    The Guidance System Rather Than Ignore The
    Erroneous Data (500M Payload Lost)

14
Five Common Aspects of HRCP Projects
  • 3. Lack of Proper Change Controls
  • No Documentation For Changes Requested Or
    PerformedBy Either Customer Or Project Team
  • No Methodology To Determine Schedule Or Cost
    Impact Of Changes To Project Baselines
  • No Client/Management Approval Process For Changes
  • If It Exists, Change Control Process Takes
    Months, Outliving Project Work Performed

15
Five Common Aspects of HRCP Projects
  • Examples Of Lack of Proper Change Controls
  • Building Maintenance Company Learns PM Accepted
    10 Million In Change Orders Without Incremental
    Funding Or Documentation Files for Bankruptcy
    Three Months Later (2002)
  • Military Weapons Contractor Provides Invoices For
    252M Based On Verbal Understanding On Changes
    With Contract Officer. Government Pays. (2001)
  • 250M Lockheed Satellite Crashes To Floor During
    Test Key Safety Bolts Removed By Team Building
    Other Satellite Without Proper Notification (8/03)

16
Five Common Aspects of HRCP Projects
  • 4. Underestimated Resource Levels
  • Scope Did Not Indicate Correct Resource Levels
  • Severe Budget Underruns With Schedule Slips
  • Excess Overtime Hours By Entire Team
  • Staff Trying To Perform Work That Should Be Done
    By Missing Staff
  • Long Delays In Locating Rare Skillsets
  • Inability to Perform Additional Billable Work Due
    To Absorbed Programming Team

17
Five Common Aspects of HRCP Projects
  • Examples Of Underestimated Resource Levels
  • Springfield VA Intersection Construction Project
    Is About 300 And Five Years Behind Schedule Due
    To Scope Creep And State Funding Constraints
  • Due To Budget Reasons, Verizon Communications
    Laid Off 2300 Technicians In NYC Last December
    People Who Rebuilt The Destroyed WTC Switching
    Center In 12 Months
  • Oxford Health Plans Migrated To A New Set Of
    Applications in 1996 Without Training Doctors,
    Nurses Or Accounting Staff Losses Totaled Over
    80M

18
Five Common Aspects of HRCP Projects
  • 5. Cumulative Cascade Effect Of Small Failures
  • Small Problems Trigger Massive, Uncontrollable
    Failures
  • Small Schedule Overruns Expand Into Indefinite
    Times
  • Small Budget Overruns Become Infinite Estimates
  • Key Technology Elements Operate In Unimagined And
    Uncontrolled Ways

Small
Big
19
Five Common Aspects of HRCP Projects
  • Examples of Cumulative Cascade Effect
  • French Concorde SST Runs Over 25 Metal Strip
    During Takeoff, Causing Tire Explosion and
    Aircraft Crash
  • 10 Chunk Of Foam Falls Onto Shuttle Columbia
    Causing Loss Of Craft And Crew
  • Lighting Strike At One Ohio Power Station
    Triggers Northeast Blackout Impacting 50 M People
    In August 03
  • Effects Of Blaster Worm (Estimated At 1B In Aug)
    Could Have Been Prevented By Downloading Free
    Patch in July

20
Political Aspects of HRCP Projects
  • Review By Elected Officials And Unelected
    Bureaucracy
  • Working With A Culture Of Service, Not Profit
  • Political Posturing With Media Access
  • Linking Of Political Agendas To Project Success
  • Alignment With Supporters To Drive Public Focus
  • Balancing Public Disclosure With Legal
    Constraints
  • Bridging Elective Terms-In-Office

21
HRCP Challenges
  • NIH (Not Invented Here) Mindset
  • Patents And Regulations May Dictate Processes
    Changes Are Difficult
  • Changing Management Priorities May Impact Project
    Priority And Budget
  • Unexpected Litigation May Impact Project
    Deliverables
  • Political Pressures May Terminate Project Despite
    Potential Benefits

22
HRCP Directional Indicators
  • Unreliable Or Inaccurate Metrics
  • Stovepipe One Perspective Measurements
  • Management Malpractice (Enron, Worldcom, etc.)
  • Silver Bullet Syndrome (Expecting A Miracle
    Fix)
  • Unexpected User Requirements Scope Creep
  • Litigation / Visits From Public Interest
    Parties
  • Unexpected, Low Productivity From Team Members

23
Media Aspects of HRCP Projects
  • Two Problems of HRCP Projects
  • 1) Complex projects usually have complex
    explanations
  • 2) Media coverage usually focuses on problems,
    not benefits
  • Solution
  • Need To Create A Set Of Project Statistics And
    Benefits
  • PM May Need To Educate Media Personnel
  • Prepare Sound Bites For Interviews
  • Media Coverage Can Be Vital To Financial And
    Political Support When Over Budget / Over Schedule

24
Media Aspects of HRCP Projects
  • Examples Of Media Briefing Statement
  • Still Under Review By The FDA, This Product
    Could Reduce The Risk Of Post-Operative Infection
    by 47 For 12 Million Hospital Patients.
  • We Intend To Reduce The Commute Time Of 17
    Million Drivers In California By Synchronizing
    The Traffic Lights Across 300 Square Miles Of
    Roads For Just 10 Per Day Per Driver.
  • Starting Monday, This New Internet Web Portal
    Will Reduce Sales Tax Collection Times By 18
    With 21 Fewer Support Staff.

25
HRCP Project Metrics
  • Earned Value Reporting
  • Resource Utilization Percentages
  • Clarity Of Stakeholders Communications
  • Frequency Of Project And Media Communications
  • Depth/Quality Of Risk Measurements (Facts vs
    Estimates)
  • Six Sigma Measurements (If Applicable)
  • Potential Benefits To Society Or Business

26
HRCP Project Metrics
  • Examples Of Potential Benefits To Society Or
    Business
  • Fewer Medical Mistakes / Patient Deaths
  • 24x7 Citizen Access To Forms and Payment Systems
  • First To Market With Information
  • First To Market With New Product
  • Accident Analysis To Prevent Future Occurrences
  • Lower Labor and Operating Costs
  • Less Traffic Congestion And Air Pollution Levels
  • Improved Homeland Security

27
Develop And Update Backup Plans
  • Identify All Critical Activities That Need Backup
    Plans
  • Proactively Create Plan B, C and D Scenarios With
    Cost And Resource Contact Points
  • Create An Emergency Skillset Bench
  • Create A Communications Plan For Shareholders And
    Media Tied To Increasing Levels Of Impact
    Severity
  • Be Prepared To Change Plans As Events Unfold

28
Develop And Update Backup Plans
  • Examples Of Backup Plans For A Technology
    Project
  • Plan B Remove 20 Features, Subcontract One
    Module
  • Plan C Remove 40 Features, Add 20 Testers
  • Plan D Remove 30 Features, Add 1M Four Months
  • Plan E Sell IP Content To Competitor For 50 Of
    Cost
  • Always Have 25 Qualified Resources On-Call
  • Always Write and Practice Media Message About
    Project Status Have Telephone/Email List Ready

29
Develop And Update Recovery Plans
  • Recovery Plans Are Used For Recovering Assets And
    Information Required For Failure Analysis
  • Recovery Plans Often Include
  • Reducing Customer Expectations
  • Reducing Project Scope
  • Reducing Critical Path Points
  • Breaking Work Into Smaller Work Packages
  • Outsourcing Critical Deliverables To Partners
  • Re-Confirming Stakeholder Priorities
  • Increasing Budget Required To Complete Project

30
Develop And Update Recovery Plans
  • Examples Of Recovery Plans
  • Use An Unconnected Event To Reset Expectations
  • Restructure Project Into Four Quarterly Releases
  • Add Schedule Time To Q1 Delivery Date (Move 1/1
    to 3/31)
  • Constrain Software Capability From 120 To 85
    Functions
  • Outsource Work To Two Partners In India and
    Russia
  • Schedule A Four Hour Briefing With Stakeholders
    To Provide Status and Confirm Additional Funding
    Interest
  • Conduct An Anonymous Web Poll To Gauge Market
    Interest

31
Leadership Challenges
  • Different Agendas The Project Manager Must Be
    Able To Manage Multiple Customers Having
    Different Agendas
  • Stress Enormous Personal Stress Exists On All
    Team Members Due To Potential Project Failure
    Risk And Critical Path Schedule
  • Scrutiny Media Review Adds Communication Steps
  • Audits Financial Pressures Often Require More
    Fingerprints
  • Balance Requires Leadership Balance Between
    Vince Lombardi And Mr. Rogers To Motivate, Lead
    And Cut Losses Early

32
Managing The Challenges
  • Love The Work The PM (And All Team Members) Must
    Like What They Are Doing
  • Grace Under Pressure People Often Blame You
    Simply Because They Have No One Else To Blame
  • Process Flexibility Processes Intended For
    Normal Projects Sometimes Arent Appropriate For
    HRCP Projects
  • Time Management Ability To Utilize And Maximize
    Every Second Of Every Day Is A Key Skillset
  • Big Picture Fitting The Small Pieces Into The
    Larger Pieces Every Activity Has A Predecessor
    And A Successor

33
Summary
  • HRCP Projects Have Lots Of Different Forces
  • HRCP Projects Have Common Characteristics
  • Challenges And Indicators Are Directional Guides
  • Accurate Metrics Are Critical To Planning
  • Remember Stakeholder And Media Communications
  • Backup Plans Are Critical To Retaining Schedule
  • Recovery Plans Are For Worst Case Scenarios

34
Conclusions
  • Successful HRCP Projects Are Possible And
    Visible
  • Wilson Bridge Replacement Project (2.5B)
  • Aircraft Cockpit Door Reinforcement Program
  • WHO SARS Epidemic Analysis Containment Program
  • Summer And Winter Olympics
  • Anthrax Cleanup
  • Restoration of Power Grids And Substations After
    N.E. Blackout and Hurricane Isabel
  • Best Wishes For Success With Your HRCP Project!
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