Rajeev andharia pmi conference 2010 v1.0

Predictability in Project Performance using Applied Statistics
Rajeev AndhariaPMP, CISA, CISSP, ITILv3 Expert
Co-Author “Six Sigma for IT Management”
rajeev@myBTP.in

Agenda
The PM Challenge
Key Concepts
Some Key Techniques
Sensitivity Analysis & Criticality Index
Monte Carlo
Some thoughts
Approximate: 30 minutes

The Project Management Challenge…
Boss:I need the Cost number
PM:I need details
Boss:give me a number now. I wont hold you to it.
PM:U will put the number in ur Budget. U will forget we had this conversation & beat me when the project goes “overbudget”
Boss: Give me a number or I will beat you right now
PM: Ok, it will cost $ 1 million
Boss: That’s too high
PM: If you already know the number why are you asking me?
Boss: you should feel involved & accountable 
PM: I rather be a developer 
There are no facts about the future—everything that hasn’t happened is only an ESTIMATE.
Boss
PM

The Choice…
Would you go to an orthopaedist who did not use X-rays?
J.M. Furbringer

Key Concepts
Predictability:
Performance:
Statistics:
degree to which a correct forecast can be made either qualitatively or quantitatively
Accomplishment measured against preset standards of accuracy, completeness, cost, and speed.
set of tools for collecting, organizing, presenting and analyzing numerical facts or observations.
provides tools for forecasting using data & models.

Key Concepts
Project Performance Management
Why Statistics & Project Management?
increasing the “probability of success” of achieving the unique outcome within the given constraints (i.e. scope, time, cost, quality, risk & resource)
improving predictability in project performance using proven practices in “applied statistics” & project management

Key Technique-1: Activity Criticality Index
Given the activity duration estimates, the project manager wants to identify the critical activities.
Popularly used technique: CPM
Alternate technique: Criticality Index based on Sensitivity Analysis

Sensitivity analysis is a technique for systematically changing parameters in a model to determine the effects of such changes.
The Criticality Index expresses how often a particular task was on the Critical Path during the analysis.

Key Technique-2: Monte Carlo Analysis
Question: What is the outcome of rolling 2 Dice?

Question: What is the Project Completion Date?

Tell me something more on Monte Carlo Analysis?
Step 1: Create a parametric model, y = f(x1, x2, ..., xq).
Step 2: Generate a set of random inputs, xi1, xi2, ..., xiq.
Step 3: Evaluate the model and store the results as yi.
Step 4: Repeat steps 2 and 3 for i = 1 to n.
Step 5: Analyze the results using histograms, summary statistics, confidence intervals, etc.

Parting thoughts…
Conclusions are judged to be sturdy only
if the neighborhood of assumptions is wide enough to be credible and
the corresponding interval of inferences is narrow enough to be useful.”
Edward E. Leamer (econometrician)

Parting thoughts…
Stakeholder Management can be significantly improved by increased Predictability in Project Performance.
Earned Value Analysis
Decision Theory
Expected Value
Sensitivity Analysis
Probability Distributions
Quality Tools

Thank You for Listening
rajeev@myBTP.in

Rajeev andharia pmi conference 2010 v1.0

by PMInstituteIndia on Dec 03, 2010

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Rajeev andharia pmi conference 2010 v1.0 — Presentation Transcript