GPM First
Chapter 4 of Project Management for Supplier Organizations (978-1-4724-1109-9) by Adrian Taggart

The Life of a Project

Chapter 4

Like projects, our own lives are only temporary. We are born and then, sometime later, we will die. But again, like projects, we are transient: we change throughout our lives.

Our physical strength, for instance, changes. As newborn babies we have very little strength (apart from the lungs!) but as we are nourished and exercise, our strength grows. It grows throughout adolescence, reaches a maximum in early adulthood, and then starts to decline through middle age, slowly at first but perhaps a little faster in our later years.

Consider the amount of help and support we need from others. This is the opposite to the above, being very high in our early years, dropping to very little in our adult years, before rising dramatically as we pass into old age. We can represent these trends pictorially (see Figure 4.1).

 
Figure 4.1 Trends during our own lifecycle

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Even though each of us is unique, these (and other) changes apply to us all and an awareness of them allows us to predict the future with some confidence, and hence to manage our own lives a little better. For instance, these two changes show the wisdom of pensions and the need to put aside some resources during our productive years to cater for our later years.

The same applies to projects. Each is unique, but the changes over its life are not and, by studying previous projects, it allows us to understand, and manage, projects better.

Consider the following.

How Projects Change Throughout Their life

The following significant trends of a project over time are the principal examples of the transient aspects of projects discussed in Chapter 1.

Rate of Expenditure

The rate at which we spend money, i.e. the amount of money spent per day, per week, per month, changes throughout the life of a project. Further, since most of the money we spend on projects is ultimately spent on reusable resources, predominantly people1[8] (either directly or indirectly via suppliers) the trend of the parameter ‘Total Number of People Engaged on Project’ follows the same shape as the trend of ‘Rate of Expenditure’.

Consider a project like the 2012 Olympic Games in London. When the decision was made to put in a bid for the Games very few people were involved. Having made this decision, many more were involved subsequently in writing up the bid. However, this number was tiny compared to the huge number of people engaged in the subsequent planning and designing of the new facilities. In turn this huge number was dwarfed by the colossal numbers involved in constructing the facilities. However, one year after the Games, how many are engaged? A very small number.

This pattern of an initially upward arching curve that levels out at a maximum after about two thirds of its duration, before undergoing a dramatic drop-off, is characteristic of projects. It can be described as a bell curve that is distorted to the right (see Figure 4.2).

 
Figure 4.2 Trends during a project lifecycle

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This demonstrates that the busiest time of the project, when most of the money and most of the human effort is being spent, is actually in the later parts of a project.

Although the parameter ‘Total Number of People Engaged on Project’ follows the same trend, it should be acknowledged that this understates the volatility of the resource demand. If we were to disaggregate this total into the individual types of resources we would see a more complete and complex picture of the project team continuously changing in its make-up as different sub-groups joined and left the project. This ‘revolving door’ aspect of those organizations that deliver projects has enormous implications for the dynamics of the team and also the practicalities of resource management discussed in Chapter 15.

Cumulative Expenditure

The rate of expenditure should not be confused with the ‘total spent so far’, known as the ‘cumulative expenditure’.

This is the sum of all costs up to that date; the amount that we have spent in this time period, plus the amount we have spent in all the preceding periods.2[9]

The graph for this parameter is a very characteristic shallow S-shape and is often referred to as an ‘S-curve’.3[10] The cumulative expenditure (both planned and actual) features very heavily in the planning and control of projects, for example, within the Earned Value Management technique.

Cost of Implementing Changes

Consider again the construction of the new Olympic stadium, and imagine making a change whereby the stadium is to be relocated 18 inches to the east. What would be the cost implication of this, if the change was effected?

  • When the decision to bid for the Games was made?

  • When the plans were finalized?

  • When the foundations were concluded?

  • When the stadium was complete?

  • Six months before the opening ceremony?

 

The costs associated with making a change depend upon when in the life of the project the change is initiated. The later it is, the more work there is that will need to be corrected, so, as can be seen in Figure 4.2, the relationship is represented by a dramatically upward arching curve.

It is well that anyone involved in projects is familiar with this curve. It demonstrates how a change, even a modest change, when implemented in the early parts of a project, can have minimal implications and yet, making the same change later in the project, can be wholly ruinous to the whole endeavour.

The mechanism whereby changes are so destructive, and hence why they must be managed, is such that it warrants careful attention and Chapter 11 is dedicated to this purpose.

Ability to Exert Influence

When, in the life of a project, is it most important to ‘get things right’?

Unsurprisingly, it is the inverse of, and wholly influenced by, the ‘cost of implementing change’. Because the cost of change ‘sky-rockets’ upwards in the later stages of a project, the rationale and opportunity for such changes diminishes.

Therefore, the ability to influence a project is very high at the start of the project but drops off dramatically as plans are enacted (see Figure 4.2).

Many project managers still greatly over-exaggerate their ability to influence events late in a project. The practical reality is that once enactment of the plan commences, the ‘die is cast’. The corollary of this is perhaps the most important perspective, namely, to influence a project one must maximize the efforts at the start of the project, during its conception and planning.

This logic extends to any phase, work package, fragment or task within a project. There is nothing cheaper and quicker than ‘getting it right first time around’ when implementing the project, however ‘getting it right first time around’ requires time, money and effort to be invested at the start.

Failure to sufficiently conceive and plan a project results in an ever- increasing number of problems emerging during the later stages, with a consequential ever-increasing demand for the project management resource. Such a scenario can be described as ‘Crisis Management’ and is a depressingly frequent reality for projects.

Uncertainty

Chapter 1 described how the project environment is characterized by a high degree of uncertainty, however this level of uncertainly does not remain constant throughout the project. It follows a trend whereby it is very high at the very beginning and drops off exponentially during the project lifecycle (see Figure 4.2).

The rate at which this uncertainty is reduced is not just a feature of the project and its inherent characteristics, but also the skill of the project manager.

Good project managers are always striving to reduce the amount of uncertainty as much as possible, as quickly as possible; to pull the shape of the curve downwards.

The optimum scenario is to pull the curve into a right angle whereby, at the very start of the project, all uncertainty disappears. This, of course, is the reality of those engaged in routine operations, such as the assembly of the washing machines when, at the outset, everything is already known. This is not a realistic prospect for projects. By their very nature it is not possible to remove so much uncertainty so quickly. However, that is not an excuse not to try.

Almost all of the efforts of project management can be described in terms of how they seek to reduce this amount of uncertainty. This gradual and managed erosion of the uncertainty is sometimes referred to as ‘progressive elaboration’. A consequence of this is, that as the project manager takes the project forward, they are able to offer estimates of parameters, such as final cost and duration, with increasing precision.

Strategic Control of Projects

The interplay between the ‘ability to exert influence’ and ‘uncertainty’ provides a very valuable insight into projects, the difficulties they pose and how crucial the early stages are.

It shows that the decisions that exert most influence over the project are made at the very time when uncertainty is at its highest, and hence most likely to be erroneous.

This simple fact explains why projects are so difficult to manage.

It also provides the rationale for so many project management techniques but perhaps the most significant of these is the use of Decision Gates.

The Rationale for Decision Gates

Consider being asked to endorse a proposed project to develop a new product.

Reject the project and you may be depriving yourselves of a very profitable new revenue stream.

Sanction it and you may be committing to a very expensive and damaging white elephant.

No decision made later in the project will have a greater impact and yet this is the time of highest uncertainty, when the key pieces of information that will indicate the final costs and benefits of the project are known in only the vaguest terms.

This represents a significant risk to the organizations that sponsor projects since there is a high likelihood that the chosen decision will be the wrong one, not due to any incompetence on behalf of the decision-maker, but because the information has such high uncertainty associated with it.

Reducing the uncertainty requires work to start on the project but this will consume precious money and resources, the waste of which the decision, fundamentally, is trying to avoid. However, basing the decision on such uncertain data carries enormous risk.

This represents an inescapable conundrum to sponsors of projects and the appropriate response is to proceed by a series of ‘Decision Gates’.

Here, the word ‘gate’ is interpreted in a very literal sense. The project cannot pass through a gate without stopping and opening it, and this can only be done with the permission of the gatekeeper.

By these, permission for the project to proceed is given, but only sufficient funding is released to allow the project to proceed up to some defined point in the near future, at which time the decision whether to proceed will be reviewed.

As we have seen, the costs associated with the early stages of the project are relatively low, in stark contrast to the erosion of uncertainty which is fastest at this time. Consequently, when, at some later point, the decision to approve the project is reviewed, it will be with the benefit of significantly superior information and after only modest expenditure (see Figure 4.3).

 
Figure 4.3 Rationale for Decision Gates

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the project is reviewed, it will be with the benefit of significantly superior information and after only modest expenditure (see Figure 4.3).

It may well be that the erosion of uncertainty about the likely costs and benefits4[11] reinforces the rationale for the project in which case it can progress to the next Decision Gate.

Alternatively, the erosion of uncertainty may wholly undermine the rationale for the project, in which case it must be stopped.

Such early termination is not necessarily a symptom of poor project management. More often than not the reverse is true.

For an organization, it is more important to ensure that they manage the right projects than it is to manage a project well. Proceeding in the manner described, with the robust use of Decision Gates, is the safest way of protecting its investments.

However, in practice, strong management is required to enforce these decisions because, understandably, early termination can be emotionally challenging; often akin to putting the family pet to sleep.

Project teams and managers must be tenacious, persistent and wholly committed to the success of a project, otherwise they will not prevail. Sustaining this whilst simultaneously maintaining the neutrality required for objective decisions about whether the project is viable, is an unpleasant conflict of interest.

This conflict of interest is one reason why projects are controlled at two levels - a strategic and a tactical level - and have both a sponsor and a project manager.

The Design of a ‘Project Lifecycle’ Model

The divisions of work between the Decision Gates are known as ‘phases’ and the series of phases and Decision Gates are known, collectively, as the project’s ‘lifecycle’.

The design of the lifecycle model is directed by the need to abort unattractive projects as early as possible and to minimize the expenditure that may have to be written off.

This can be achieved by minimizing the period between the Decision Gates but since each requires the updating of the business case and the reconvening of the steering group or executive board, there are practical limits to the frequency of Decision Gates that a project can accommodate. Also, overly frequent Decisions Gates have the effect of ‘micro-managing’ the project manager.

A compromise is therefore required and early in the project the ‘gatekeepers’ will identify when they want the Decision Gates to occur. Also, they will decide what information (and hence documents) and deliverables they wish to have available at each of those Decision Gates. This will be done with a view to defer spending on expensive work as late as possible, whilst simultaneously reducing the uncertainty as quickly as possible. This will both improve the quality of early decisions and minimize any write-off cost (see Figure 4.3). Accordingly, inexpensive measures that dramatically reduce uncertainty, such as feasibility reports, are associated with the early Decision Gates.

The items required at each Decision Gate are created in the preceding phase. They are known as ‘phase products’ and they define the work required within the phases. Early phases will have ‘phase products’ such as investigation reports, the mid-point phases will have designs and plans, and the later phases, the actual project deliverables.

Strategic and Tactical Control of Projects

Lifecycle models assist organizations to differentiate between ‘strategic’ and ‘tactical’ control over projects.5[12] ‘Strategic control’ is exercised by the sponsor and project steering group (the gatekeepers) at the Decision Gates. It is concerned primarily with the protection of the sponsoring organization.

‘Tactical control’ is the day-to-day control of work within the individual phases, exercised by the project manager.

The former is more important than the latter. It provides the ultimate sanction and without it misconceived projects, perhaps with the potential to bring down the whole of the sponsoring organization, cannot be cut away. History offers many examples of the consequences of such failure.

As well as the project itself, strategic control will consider its commercial environment and the other projects being sponsored by the organization. Sometimes the strategy of a sponsoring organization changes such that the output of the project is no longer required; sometimes the innovation of a competitor renders a project redundant; sometimes it is better to divert the limited resources of an organization in pursuit of a more attractive project. Each of these are reasons to terminate a project even when, intrinsically, it is in good shape.

In addition to deciding whether to proceed or not with the project, Decision Gates offer senior management an opportunity to verify the tactical control of the project manager, for instance by checking that all phase deliverables have been completed to a satisfactory degree. In this respect the gates can start to become an exercise in progress evaluation, and whilst a degree of this is inevitable, care should be taken to prevent the steering group being drawn into a level of detail that can and should be managed by the project manager.

Strategic Plan

A well-conceived lifecycle is best thought of as a strategic plan. It becomes a link between those commissioning and those executing the project and is an important element of an organization’s project governance.

Once established it allows the steering group to step back and let the project manager and team get on with the tactical management of the project.

For the project manager, it also allows them to let go of the bigger picture and manage the project one phase at a time; an altogether more manageable parcel of work. This is particularly relevant for large projects that may last many years.

It is important therefore that the lifecycle is well conceived.

The Lifecycle as the Basis of a ‘Method’

Many organizations are established not just to deliver one project, but a series of projects, for example a construction company. Very often these projects are sufficiently similar to each other that the same lifecycle, or strategic plan, can be applied to each.

This offers many potential advantages to an organization. These advantages are associated with economies of scale (each project does not have to design their own), speed of initiation (the strategic plan is already there), familiarity and consistency (everyone in the organization already understands the process and their role), ease of comparison of projects, and it also aids the adoption of ‘lessons learned’ from previous projects by refining what should be done and when.

Many organizations choose to maximize the potential for these benefits by supplementing the common lifecycle with standard forms, documents, roles and responsibilities and the like. The combined effect of these is that they become a protocol that lays out how a project is to be delivered. This protocol is known as a project management method (sometimes as a ‘methodology’).

Readers may wish to observe that the adoption of such a method serves to reduce the ‘uniqueness’ of the project and has the effect of moving it downwards in the continuum offered in Figure 1.1. Potentially, this offers many advantages but again the caveat remains that all projects are unique and there are limits to how far the same approach can be applied to different projects. Many readers will have experienced the intense frustration of being obliged to follow a management protocol which is simply inappropriate for their project. It can be disastrous.

For this reason, each method tends to apply only to one specific environment. Publicly available methods are available, e.g. PRINCEII, but most methods are specific to projects within just one type of industry (e.g. the Guide to Railway Investment Projects (GRIP) in the UK rail sector), or projects just within the one company.

In practice there is a great skill involved in designing a ‘method’ that is sufficiently rigid such that the desired benefits can accrue, and yet remain sufficiently flexible such that it can be applied easily to a number of different projects.

Generic Lifecycle Models

As implied above, there is some latitude in the precise design of a project lifecycle model and different practitioners choose to ‘slice and dice’ projects differently.6[13]

This becomes evident when considering projects in just one sector of industry or commerce; in just one organization; or indeed just one type of project. When considering such a subset of projects it is possible to tailor the lifecycle model to the specifics that appertain.

However, behind this is a broad pattern and flow of activities that is common to all projects, so much so that we can entertain the idea of a generic lifecycle model; one that can be applied to all projects.

The next chapter describes such a model.

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