+
Open Loop / Closed Loop Project Controls
How to distinguish the difference between Open Loop Control and Closed Loop Control and why this
is important when discussing project management, software development, and making decision in
those domains.
I write to discover what I think.— Daniel J. Boorstin, Librarian of Congress
Version 2.0, 7.15.14
Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Introduction
2
Since the earliest days of the computer software
industry, managing of software development
projects has been fraught with uncertainty and
risk.
While the technical content of software products
and the technical methods used to build them have
changed over time, the fundamental issues that
determine the success or failure of software
projects have remain constant.
The fundamental management mistakes have
remained the same.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+These Management Mistakes Are
Simple and at the Same Time Complex
1. We don’t know what Done looks like in units of measure
meaningful to the decision makers.
2. We don’t have a credible path to reaching Done that
provides some level of confidence to those paying for the
project, that the needed capabilities will arrive on or
before the need date, at or below the expected cost.
3. Missing visibility to the resources needed to fulfill bullet
#2.
4. Failed to capture the uncertainties that create risk to
fulfilling bullet #2.
5. Failed to provide the means of measuring progress to
plan, based on physical percent complete, again in units of
measure meaningful to the decision makers.
3

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Purpose of Management Control
System
4
Project Controls is the – Management actions, either
preplanned to achieve the desired result, or taken as
a corrective measure prompted by the monitoring
process.
Project controls is concerned with the metrics of the
project – quantities, time, cost, and other resources.
As well project revenues, delivered customer value
and cash flow.
These metrics start by focusing on the delivery of
business or mission Value in exchange for the Cost
of that Value.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
5"You've got to be
very careful if you
don't know where
you're going,
because you might
not get there."
Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
Any notion of not
having a plan is
nonsense, just ask Yogi

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Overview of Project Controls
! Without a desired delivery date, target budget, and expected
capabilities, a control system is of little interest to those
providing the money at business level.
! There is no way to assure those needs – date, budget, capabilities – can
be met with the current capacity for work, efficacy of that work process,
or budget absorption of that work.
! With a need data, target budget, and expected capability
outcome, a control system is the basis of increasing the
probability of success.
! These targets are the baseline to steer toward
! Without a steering target the management of the project is Open Loop
! With need for a project control system, this briefing addresses
the two choices:
! Closed Loop Control – where the output signal has direct impact on the
control action.
! Open Loop Control – where the output signal has no direct impact on
the control action.
6

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Open and Closed Loop Control
! A control system where the
output signal has direct
impact on the control action.
! In a closed loop system the
error signal, which is the
difference between the input
and the feedback is fed to the
controller to reduce the error
and bring the output of the
system to a desired value.
! For each reference input,
feedback (difference
between actual state and
desired state) is used to take
corrective action.
! A control system where the
output signal has no direct
impact on the control action.
! In an open loop system, the
output is neither measured
nor fed back for comparison
with the input.
! For each reference input
there is a fixed operating
condition.
Closed Loop Control Open Loop Control
7

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Open Loop Control
! An Open-Loop system, is a non-feedback system, where
the output – the desired state – has no influence or effect
on the control action of the input signal.
! In an Open-Loop control system the output – the desired
state– is neither measured nor “fed back” for comparison
with the input.
! An Open-Loop system is expected to faithfully follow its
input command or set point regardless of the final result.
! An Open-Loop system has no knowledge of the output
condition – the difference between desired state and actual
state – so cannot self-correct any errors it could make
when the preset value drifts, even if this results in large
deviations from the preset value.
8

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Open Loop Control for a Clothes
Dryer
! We set the controller (the timer) on the dryer to run for a
specific time.
! The dryer creates heat (output) and runs until the timer says
stop.
! When the elapsed time is complete the dryer stops.
! The clothes may or may not be dry depending on the allotted
time and temperature of the dryer.
9

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Open Loop Paradigm
! A process is controlled through the actions
of
! Work performed at the capacity for that work
! Time period of the work performed
! This process has a desired outcome not
connected with the actual desired state
10
! In the clothes dryer example – the actual desired state is dry
clothes.
! The timer (controller) is a proxy for the desired state
! The timer is not measuring the actual state and comparing it
to the desired state
! The timer is an Open Loop control system.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Formal Representation of Open Loop
Control
11
!
!
!
G1 =
θ1
θi
, G2 =
θ2
θ2
, G3 =
θ0
θ2
G1 ×G2 ×G3 =
θ1
θi
×
θ2
θ1
×
θ0
θ2
=
θ0
θi
Gain, G( )=
θ0
θi

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Closed Loop Control
! A Closed-loop Control System, is a feedback control system
which uses the concept of an open loop system as its forward
path but has one or more feedback loops between its output
and its input.
! The reference to “feedback,” means some portion of the output
is returned “back” to the input to form part of the systems
excitation.
! Closed-loop systems are designed to automatically achieve and
maintain the desired output condition by comparing it with the
actual condition.
! It does this by generating an error signal which is the
difference between the output and the reference input.
! A “closed-loop system” is a fully automatic control system in
which its control action being dependent on the output in some
way.
12

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Closed Loop Control
! The desired dryness is set by the user
! The dryer turns on the heat and starts drying the cloths
! A sensor measures the dryness of the cloths and determines if
it is necessary to keep drying or not
! When the cloths reach the desired dryness the dryer stop
13

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Closed Loop Control Paradigm
! The closed loop control has three elements
! The desired state
! The actual state
! The error signal – difference between desired and actual – used
to control the drying function
! This is the steering signal to keep the system headed in the
desired direction – DRY CLOTHS
! Without the desired state, there can be no steering signal –
different between desired and actual
14
LOOP WHILE (IF State=“no DRY, Continue, ELSE Stop)!
! The desired state of the cloths is defined to the
control system
! Make my cloths dry
! Sense “dryness”
! Stop drying when the desired state of “dryness” is
reached

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Formal Representation of
Closed Loop Control
! G represents the open-loop gain of the control system and is
the forward path
! H represents the gain in the sensor or measurement system in
the feedback path
! Output of the system = G × Error
! Θe is also input to feedback loop G
! Output f rom summing point equal Error = Input – H × Output
15

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Key Differences Between Open and
Closed Loop Before Proceeding
! Controller has some knowledge
of the output condition
! The desired condition is not
present in the control loop –
hence the Open Loop
! Any corrective action requires an
operator input to change the
behavior of the system to achieve
a desired output condition
! Controller has some knowledge
of the output condition
! The desired condition is
compared to the actual condition
to create an error signal
! Which is the difference
between the input signal (the
desired dryness) and the
output signal (the current
dryness)
! Closed loop means feedback not
just for recording the output, but
for comparing with the desired
state to take corrective action
Open Loop Control Closed Loop Control
16

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Key Behaviors of Open Loop and
Closed Loop Controller
! No comparison between actual
output condition and the desired
output conditions
! Has no regulation or control
action over the output condition
! Each input condition determine a
fixed operating condition for the
controller
! Changes or disturbances in
external conditions does not
result in a direct output change
unless the controller and
manually altered
! Output condition errors are
adjust by changes in the
controller function by measure
difference between output and
desired condition
! Output conditions are stable in
the presence of an unstable
system.
! Reliable and repeatable output
performance results from
corrective actions taken from the
error signal
Open Loop Control Closed Loop Control
17

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+
Control Loops and Software
Development
What data do we have?
What data to we need?
What questions can be answered with this data?
What decisions can be made from answers to these questions using the data?
How can we better manage the project to success?
18

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Let’s Tell a Good Story†
! The Setting – we work in an enterprise IT environment, a product
development company, or on a mission critical software project.
! The Protagonist – Those providing the money need information to
make decisions
! The Imbalance – it’s not clear how to make decisions in the
absence of information about, the cost, schedule, and technical
outcomes from those decisions.
! Restoring the Balance – when a decision is made, it needs to
based on the principles of microeconomics, at least in a
governance based organization.The decision
! Recommended Solution – start with a baseline estimate of the
cost, schedule, and technical performance. Execute work and
measure the productivity of that work.
! Using these measures to calculate the variance between planned and actual.
! Take management action to adjust the productivity, the end date, the budget
– using all variables produce a new Estimate To Complete to manage toward
This is a closed loop control system
19
† This approach is guided by Cliff Atkinson’s Beyond Bullet Points, where telling the story is the basis of successful capabilities
based planning, process improvement, writing a winning proposal, and or a credible white paper.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+The Microeconomics of Software
Development†
! Economics is the study of how people make decisions in
resource-limited situations.This definition of economics fits the
major branches of classical economics very well.
! Microeconomics is the study of how people make decisions in
resource-limited situation on a person scale. It deals with
decision that individual and organizations make on such issues
as how much insurance to buy, which word processor to buy,
what prices to change for pro ducts and services, which path to
take in a project.
! Throughput the project lifecycle, these decision making
opportunities. Each decision impacts the future behavior of the
project and is informed by past performance and the
probabilistic and statistical processes of the underlying project
activities.
! To make an informed decision about the project, estimates are
made using this information
20
† Microeconomics applied to projects is a well understood and broadly applied discipline in cost account and business strategy and
execution. Decision making based on alternatives, their assessed value and forecast cost. Both these values are probabilistic.
Microeconomics is the basis of Real Options and other statistical decision making.Without this paradigm decision are made not knowing
the future impact of those decisions, their cost, schedule, or technical impacts.This is counter to good business practices in any domain.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+First Look At Sampled Performance
Data and Software Control Methods
! In an Open Loop system,the Output condition has no
direct impact on the control action.
! Sampled data from past performance provides information
about the outputs of the process
! No error signal is created between the actual condition and
the desired condition
! This is the definition of Open Loop Control
! To have a Closed Loop control system
! The Output condition must impact the control actions
! This impact is created by an error signal calculated by the
difference between the desired condition and the actual
condition.
! This feedback is then used to make changes in the system to
assure the output condition meets the desired condition.
21

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+What Does This Mean For Software
Development?
! We have a planned completion date for any important
project.
! This is a critical assumption.
! Without a need date or target budget, the discussion of
controlling projects is of little interest.
! The actual condition is compared to the desired condition
(the planned completion date) to assess if that date can
be met.
! If we produce work at the current rate (actual condition) will we
be able to meet the desired condition (planned completion
date).
! The critical aspect for Closed Loop is a desired condition.
! Without that, the control process is Open Loop and the
completion date will be what it will be.
! With a Closed Loop, the corrective actions to complete on
needed date are defined by the difference between actual and
desired.
22

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Economic Analysis Techniques for
Decision Making Under Uncertainty
! Under complete uncertainty
! Maximax rule
! Maximum rule
! Laplace rule
! Expected value techniques – estimating
probabilities of occurrence of each outcome
! Buying information based on Epistemic Uncertainty
! Prototyping
! Little Bets in an agile paradigm
! How much information is enough is answered with Bayes’ Law
23

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+We Have Some Data
We Have An Estimate
Now We Need To Decide
With the project underway, we need to manage toward a needed
completion date, for a planned cost, and a needed set of
capabilities.
How can we do that in an Open Loop system?
24

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Example of Open Loop Control
! Perform work and write
down the actual
performance
! Use this data to forecast
future performance
! Without a target –
desired – performance
the actual performance
can’t be used to generate
the error signal needed
to take corrective action.
25
Example data from
http://softwaredevelopmenttoday.blogspot.com/2014/07/
what-is-capacity-in-software.html of sampled development
projects for number of stories per sprint.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Principles of Open Loop in software
development
The question is:
! Is the measured capacity for work sufficient to meet the
needed capacity for work in the project paradigm?
! How can we control the project so we show up on time, on
budget, with the needed capabilities?
! Measuring actuals and using these to forecast this capacity
is Open Loop, since there is no desired performance.
! With the need date, target cost, and expected capabilities,
we need targets to steer toward.
! These targets are not the actual capacity, but the needed
capacity.
Your job is to learn what that capacity is and limit the work to
capacity!
(Credit to Mary Poppendieck (PDF,slide 15) for this quote).
26

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+What Can We Learn With Open Loop
Control?
27
1
3
2
3
2
3
4
2
1
4
3
2
3
4
1
5
2
3
4
3
2
1
4
6
9
11
14
18
20
21
25
28
30
33
37
38
43
45
48
52
55
57
0
10
20
30
40
50
60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Actual Stories / Iteration
Cum Actual Stories / Iteration
The actual stories per
iteration measured from
project
The cumulative stories per
iteration measured from
project
We know what rate we are running at because we
record that data. But we don’t want rate we should
be running at to show up on time
We have not steering
target to compare our
actuals against

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+What Can We Learn With Closed
Loop Control
28
0
10
20
30
40
50
60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Actual Stories / Iteration Cum Actual Stories / Iteration Planned Stories / Iteration Cumm Planned Stories / Iteration
Actual cumulative stories
per iteration measured
from project
Desired cumulative
stories per iteration
measured from project
Difference between desired stories per iteration and
actual stories per iteration provides steering
information, to tell project if they’ll make the planned
completion date given “baseline”
We know what rate we are running at because we record that data.
And we don’t want rate we should be running at to show up on time.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Summary of two Previous Charts
! Stories per iteration recorded
as project proceeds.
! Cumulative stories per
iteration recorded as project
proceeds.
! What number of storied per
iteration should the project
be produced to stay on
schedule and cost (work
effort = cost)?
! Don’t know – there is no
“desired” number for
steering.
! Stories per iteration recorded
as project proceeds.
! Cumulative stories per
iteration recorded as project
proceeds.
! What number of storied per
iteration should the project
be produced to stay on
schedule and cost (work
effort = cost)?
! The difference between
“desired” and “actual” shows
shortfall or overage of stories
per iteration to show
performance of project
Open Loop Closed Loop
29

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Process Check for Open Loop
Control Systems applied to Software
30
Closed Loop control is based on an Open Loop control.
To close the loop, we must establish a target performance
number – the desired capacity for work.
This desired capacity for work may or may not be the actual
performance for work.
We need to answer:
" At the actual rate,will we be over budget when we finish on
the needed date?
" At the current rate will we show up late?
" At the current rate,will we be able to deliver the needed
capabilities as planned?

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+
Wrap Up
" Without a plan, you won’t recognize done when it arrives
" Without a plan, you don’t know where you’re going until you
arrive at the destination, out of money and out of time.
" Without a plan you can’t measure progress other than
consumption of time and money
31

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Project Success Depends on Many
Things
! When you drive the project in the absence of a desired outcomes –
the project goal – without units of measures meaningful to the
decisions maker,
Some technical,some managerial,some political,some
economic.
32
! Is like driving in the rear view
mirror.
! It can be done, but you don’t know
you ran over anything until you do.
! Close Loop Control provides the
headlights to see where you’re
going and what’s in the way of your
progress
! Open Loop Control has no desired outcome in terms of delivery date,
cost, and needed capabilities, defined before you start and during you
trip, so you’ll only know where you’re going when you arrive.

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Bibliography
! Software Engineering Economics, Barry Boehm, Prentice Hall
! Software Cost Estimation with COCOMO II, Barry Boehm, et al, Prentice Hall
! COSMIC: Guideline for Sizing Business Software,Version 3,
http://www.etsmtl.ca/Unites-de-recherche/GELOG/accueil
! “Avoid Software Project Horror Stories: Check the Reality Value of the Estimate
First!”, Harold van Herringen, ICEAA 2014,
http://documentcenter.meetingcaddie.mobi/Events//2ffb743d-7bc3-492c-
b756-cfb6eeea0110/Documents/ef7d120c-c386-471a-9f86-bac6bc7a80f7.pdf
See Nederlandse Software Metrieken Association, www.nesma.org and
International Software Benchmarking Standards Group, www.isnsg.org, and
Common Software Measurement International Consortium, www.cosmicon.com
! How to Lie with Statistics,Darrell Huff,W.W. Norton, 1954
! Facts and Fallacies of Software Engineering, Robert L. Glass Addison-Wesley,
2003.
! Probability Method for Cost Uncertainty Analysis:A Systems Engineering
Perspective, Paul R. Garvey, CRC Press, 1999
33

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Bibliography
! “Factors Affecting Duration And Effort Estimation Errors In Software
Development Projects,” Ofer Morgenshtern,Tzvi Raz, and Dov Dvir,Working
Paper No 8/2005, Henry Crown Institute of Business Research, Israel.
http://recanati-bs.tau.ac.il/Eng/?CategoryID=444&ArticleID=747
! “An Empirical Validation of Software Cost Estimation Models,” Chris F. Kemerer,
Research Contributions,Management of Computing,Communications of the ACM ,
may 1987,Volume 30, Number 5.
! “Software Engineering Economics,” Barry Boehm,TRW Defense Systems,
Redondo Beach, CA
! “Software Cost Estimation Methods: A Review,”Vahid Khatibi and Dayang N. A.
Jawawi, Journal of Emerging Trends in Computing and Information Sciences,
Volume 2, No. 1, 2010.
! “What We Do and Don’t Know About Software Development Effort Estimation,”
Magne Jorgensen, IEEE Software,March 2014.
! “Review of Studies on Expert Estimation of Software Development Effort,” M.
Jorgensen, Simula Research laboratory, 2002.
34

Copyright ©, 2014, Niwot Ridge LLC, Performance-Based Project Management®
+Bibliography
! Protecting Software Development Projects Against Underestimation, Eduardo
Miranda, Alain Abran, École de technologie supérieure - Université du Québec
! “Improving Subjective Estimates Using Paired Comparisons,” Eduardo
Miranda, IEEE Software, January/February 2001.
! “Improving Estimations in Agile Projects: Issues and Avenues,” Luigi Buglione,
Alain Abran, Software Measurement European Forum – SMEF2007, Rome (Italy),
May 8-11, 2007.
! “Estimating the Test Volume and Effort for Testing and Verification & Validation,”
Alain Abran, Juan Garbajosa, , Laila Cheikhi1, First Annual ESAWorkshop on
Spacecraft Data Systems and Software - SDSS 2005, ESTEC, Noordwijk, European
Space Agency, Netherlands, 17-20 October 2005.
35

Chapter 036 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014