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Using Business Simulation to Analyse Project Management Decision Making

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Project manager’s decisions are analysed by studying the chosen options and project performance in the business game SimulTrain®. A simulation provides an excellent opportunity for data mining and analysis because all participants manage similar projects and face the same challenges. The results of project simulations carried out by more than 8000 project managers and students of business
schools around Europe show the differences between participants’ choices and experts’ opinions. The analysis highlights the major shortcomings of project delivery,
decision making, and risk reaction and lists the common mistakes made by managers. Further, it demonstrates that managers’ proactive behaviour and risk prevention attitudes as well as investing into communication and team development result in better project performance.

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Using Business Simulation to Analyse Project Management Decision Making

  1. 1. The Shift from Teaching to Learning: Individual, Collective and Organizational Learning Through Gaming Simulation Proceedings of the 45th Conference of the International Simulation and Gaming Association Dornbirn, 2014 Willy C. Kriz, Tanja Eiselen, Werner Manahl
  2. 2. u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u 313 Using Business Simulation to Analyse Project Management Decision Making Igor Kokcharov Abstract Project manager’s decisions are analysed by studying the chosen options and project performance in the business game SimulTrain®. A simulation provides an excellent opportunity for data mining and analysis because all participants mana- ge similar projects and face the same challenges. The results of project simula- tions carried out by more than 8000 project managers and students of business schools around Europe show the differences between participants’ choices and experts’ opinions. The analysis highlights the major shortcomings of project deli- very, decision making, and risk reaction and lists the common mistakes made by managers. Further, it demonstrates that managers’ proactive behaviour and risk prevention attitudes as well as investing into communication and team develop- ment result in better project performance. Keywords business game, data mining, decision making, manager, performance, project ma- nagement, risk, serious game, simulation, SimulTrain 1 Introduction The difficulty of scientific analysis in project management is linked to the diversi- ty that exists in the project management profession. Most defining characteristics of complexity in projects are multiple stakeholders (57%), ambiguity of project features (48%), significant authority influence (35%), unknown project features (33%) and others [1]. Project managers use different methods like risk manage- ment, project performance indexes, change management practice, agile project management to turn complexity into success. While each project is unique, the common aspects, phases, and steps of project management are summarised in professional standards [2–4]. Only practice makes perfect. Managers only find situations, projects, and problems to be similar when performing a business game [5]. For example, while pilots impro- ve their reaction skills in critical situations by using flight simulators, project ma-
  3. 3. u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u 314 nagers employ project management simulators. The advantage of a simulation is the possibility to repeat critical situations quickly and without incurring financial losses and develop skills via collaboration [6]. Modern project simulations Alba- sim, Cayenne, Cesim, Fissure, PM Simulation, Prendo, Sharkworld, Simventure, Simultrain®, SMG, Topsim and others [7] are widely used for corporate professio- nal training. The business game SimulTrain® (Fig. 1), a simulation of a three-month project carried out by a group of four people in 6–8 hours, is used for the analysis. The simulation is based on the results of two scientific surveys [8]. The simulator includes an expert system that analyses participants’ decisions and provides them with a conclusion that highlights the strong and weak aspects of their mana- gerial behaviour. Figure 1 SimulTrain® project office and project performance indexes. Because participants face similar situations, their decisions can be compa- red. The main objective of the analysis of the results of more than 2000 simula- tions is establishing a list of the common mistakes made by managers. Making recommendations for improving the simulation model was an additional objective of the research. 2 Data Mining Participants’ input includes different information: they allocate people to activities, plan meetings and social events, react to risk issues, and make multiple-choice
  4. 4. u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u 315 decisions on project issues. The output of the simulations is a set of project perfor- mance indexes: the Schedule Performance Index, Cost Performance Index, Quali- ty Index, and Risk Management Index as well as their average value. Optimal values are 100% or higher. In other words, the greater the indexes, the better it is for the players. Log files of 2054 simulations were used for data mining. The average num- ber of decisions during a simulation is 483. On the average, attendees make one decision per minute during the simulation. Thirty-one percent of the games were carried out in French, 27% in German, 25% in English, 6% in Portuguese, 5% in Spanish, 4% in Russian, and the remainder in the other 15 languages available. The average score for all simulations was 95%. 3 Project Performance The analysis in Fig. 2 shows weak or no dependence between project performance (the average score) and the number of decisions taken during the simulation. Figure 2 Integral performance score versus the number of decisions taken during the simulation project. Figure 3 Risk Management Index versus the number of risk reaction decisions.
  5. 5. u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u 316 Decisions about risk prevention and risk mitigation show two trends: 1) there is a strong increase of the Risk Management Index when the number of de- cisions is small and 2) a further increase in the number of decisions has a small effect on the indicator. 4 Decision Analysis Participants resolve project issues by making decisions. There are 68 decisions with three options (Fig. 4). After a discussion, a team of four participants chooses one of three options. The team may refuse to make a decision, but this action re- sults in an unfavourable decision being taken by top management. Figure 4 A typical situation that participants meet in SimulTrain® Participants’ choices affect many parameters in the simulation, such as budget, schedule, motivation, quality, and risk. These choices then influence sta- keholder relationships [6]. A numerical measure of stakeholder relationships has been suggested (i.e., 0% to 100%). Fig. 5 shows two examples of when there is large and small differences between experts and participants’ opinions. The text of several decisions has been modified as a result of this analysis. a) b) Figure 5 Two situations where the choices of participants and experts are different (a) and similar (b).
  6. 6. u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u 317 The analysis also allows us to establish a list of the most common mistakes made during the simulation. This is a list of the themes where the difference in opinions was maximised: 1. Proactive use of a large range of communication tools; 2. Adapting to different stakeholder requests; 3. Honestly informing the team about all project situations; 4. Spending money to prevent risks; 5. Involving the team in decision making; 6. Investing into team development; 7. Avoiding micro-management; 8. Fighting for the organisational resources assigned by top management. These major points discovered by the analysis are important themes for follow-up discussions during project management training courses. 5 Risk Management Analysis Participants react to risks by planning actions in a Risk Register. Fifteen risk situ- ations concerning scope, schedule, quality, resource, finance, and operation are under consideration. Participants can choose up to five reactions to a risk. They can even choose all the suggested measures; however, this action affects the pro- ject budget. Therefore, they have to balance risk prevention and budget spending. Fig. 6 shows the differences between experts’ and participants’ choices for one of the situations. Figure 6 A situation when the opinions of experts and participants about risk reaction options are different.
  7. 7. u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u 318 The analysis shows the risk prevention situations where the opinions of experts and participants are sufficiently different. In particular, participants 1. Don’t involve external experts during project planning; 2. Don’t consider regular project plan updates; 3. Don’t consider training to be an important measure against missing qualifi- cations; 4. Don’t plan/prepare alternative technical solutions in case the initially planned solution does not work. 6 Discussion Business simulation provides an opportunity for data mining and analysis becau- se all participants manage similar projects. The analysis recommends modifica- tions to the business game model and highlights some of the major shortcomings in project delivery, decision making, and risk reaction, such as: 1. Proactive use of a large range of communication tools; 2. Adapting to different stakeholder requests; 3. Investing into team development; 4. Using external expertise during project planning; 5. Investing into alternative technical solutions. The analysis shows that managers’ proactive behaviour and risk preventi- on attitudes result in better project performance. References PMI’s Pulse of the Profession in-Depth Report: (2013). Navigating Complexity. A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) (2013). Project Management Institute. ICB – IPMA Competence Baseline (2006), Version 3.0, International Project Management Association. Managing Successful Projects with PRINCE2. OGC (Office of Government Commerce) (2009). TSO (The Stationery Office).  Salas, E., Wildman, J. L., & Piccolo, R. F. (2009). Using simulation-based training to enhance management Education, Academy of Management Learning & Education, 8, 559–573. Kokcharov I., Strehmel S., & Burov A. (2013). Case Study-based Collaborative eLearning. International Conference on Interactive Collaborative Learning, ICL, IEEE Proceeding, 2. List of Project Management Simulations http://pmgames.tuxfamily.org/ Sauter, R. (1996). La modélisation des facteurs humains dans la gestion de projects. Thèse # 1494, EPFL, Lausanne. Author/Contact Igor Kokcharov Sauter Training & Simulation SA, Switzerland igor.kokcharov@sts.ch

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