The Application of Success Probabilities, Success Driven Project Management, and Some Critical Chain Concepts To the Oil &...
Presentation Outline <ul><li>The Need to Manage Uncertainties </li></ul><ul><li>Success Driven Project Management/SDPM Met...
THE NEED FOR MANAGING UNCERTAINTIES, RISKS, & RESOURCE RESTRICTIONS IN PROJECTS <ul><li>These occur in all complex project...
Success Driven Project Management  (SDPM) <ul><li>Planning Stage: </li></ul><ul><ul><li>Calculate finish dates & costs wit...
Success Driven Project Management (SDPM) <ul><li>Execution and Control: </li></ul><ul><ul><li>Calculate current probabilit...
Resource Critical Path/RCP <ul><li>True (resource) critical path must reflect ALL schedule constraints: resource, finance,...
Success Probability <ul><li>System forecasts resulting required resources & contingency reserves  based on user defined ac...
Eight Integration Methods Used <ul><li>Systematic scope definition (several indentured structures/WBS) </li></ul><ul><li>N...
Eight Integration Methods   (Cont ’ d) <ul><li>Activity durations calculated: scope or volume  ÷ rate  using range estimat...
Eight Integration Methods  (Cont ’ d) <ul><li>Risk & uncertainties simulated: probability distribution for main project re...
Eight Integration Methods   (Cont ’ d) <ul><li>Current probabilities of success calculated and trends determined for: </li...
Methods Unique to SDPM <ul><ul><li>Multiple breakdown structures </li></ul></ul><ul><ul><li>Resource information & analysi...
SDPM versus CCM <ul><li>Resource Critical Path: </li></ul><ul><ul><li>All schedule constraints </li></ul></ul><ul><ul><li>...
SDPM versus CCM (cont’d) <ul><li>Many potential RCPs and paths with small floats may exist </li></ul><ul><li>‘ Feeding buf...
SDPM versus CCM (cont’d)   Risk Evaluation & Prediction <ul><li>Monte Carlo or range estimates </li></ul><ul><li>Predict u...
SDPM versus CCM (cont’d)   Progress Evaluation  & Decision Making <ul><li>Project performance and buffer usage monitored b...
SDPM versus CCM (cont’d)   Project Portfolio Management <ul><li>Planned as one large project </li></ul><ul><li>Projects in...
SDPM versus CCM (cont’d)   Periodic Schedule & Cost Performance Evaluation <ul><li>SDPM approach based on regular recalcul...
MC vs Using 3 Estimates:   Inputs <ul><li>Monte Carlo: </li></ul><ul><li>3 estimates made, prob. distributions assumed </l...
MC vs Using 3 Estimates:   Process Methods <ul><li>Project execution simulated many times, activity durations and risk eve...
MC vs Using 3 Estimates:  Completion Date <ul><li>Project finish date set to match desired probability under the defined d...
MC vs Using 3 Estimates:   Progress Evaluation <ul><li>Repeat process periodically, plot success prob. Trends </li></ul><u...
MC vs Using 3 Estimates:   Pro <ul><li>More accurate </li></ul><ul><li>Can show complex curves with more than one max </li...
MC vs Using 3 Estimates:  Cons <ul><li>Time consuming </li></ul><ul><li>If activities are performed by same resources, res...
MC vs Using 3 Estimates:   Using a Summary Model <ul><li>For large projects people sometimes use a summary network </li></...
MC vs Using 3 Estimates:   Merge Bias Question <ul><li>Exists when using summary models </li></ul><ul><li>Many paths mergi...
The Russian Approach to Project Planning <ul><li>Soviet Union roots </li></ul><ul><li>Universal coding system </li></ul><u...
Is this the real critical chain ? (Photo in Amazon, enjoying a couple of days off the Urucu/Manaus Project – Peter Mello, ...
Experience to Date: SDPM & RCP in Brazil <ul><li>First known application of SDPM happened at Urucu/Manaus Pipeline in Octo...
Experience to Date: SDPM & RCP in Brazil <ul><li>First known application of SDPM happened at Urucu/Manaus Pipeline in Octo...
Slowing Down to Speed Up !! <ul><li>What is expected with the adoption of Success Driven Project Management is the ability...
Fragnets <ul><li>Fragnets are modeled phases of the project that are carefully planned to be applied to the whole project....
Fragnets <ul><li>By using automated scheduling optimization and simulation, activities in each fragnet are reorganized to ...
Fragnets PMI COS  5th Conference,  May 4-7 2008, Chicago USA Schedule optimization
Fragnets PMI COS  5th Conference,  May 4-7 2008, Chicago USA 800 meters per day 1150 meters per day Slow down Speed up
Scheduling optimization in a few words <ul><li>Almost any network of activities can be improved if we simply try the alter...
PMI COS  5th Conference,  May 4-7 2008, Chicago USA
PMI COS  5th Conference,  May 4-7 2008, Chicago USA 9 DAYS 10 DAYS
SDPM is expanding in Brazil <ul><li>STD is an engineering company developing several projects around Brazil for oil & gas....
SDPM is expanding in Brazil <ul><li>Three new projects have started in January 2008. The average size of each of these pro...
SDPM is expanding in Brazil <ul><li>Several shared resources are still the same as the ones available for previous project...
SDPM is expanding in Brazil <ul><li>Before SDPM: Schedules had an average of 5 levels of detailing in the WBS and less tha...
SDPM is expanding in Brazil <ul><li>After SDPM: </li></ul><ul><ul><li>Acquisition of parts are planned using fragnets with...
PMI COS  5th Conference,  May 4-7 2008, Chicago USA Three point estimates Most Probable applied Pessimistic applied Most P...
PMI COS  5th Conference,  May 4-7 2008, Chicago USA Optimistic with  Critical Schedule Calculated
PMI COS  5th Conference,  May 4-7 2008, Chicago USA Success Probability PMI COS  5th Conference,  May 4-7 2008, Chicago US...
PMI COS  5th Conference,  May 4-7 2008, Chicago USA Success Probability – The paradox <ul><li>As Project Managers, we want...
PMI COS  5th Conference,  May 4-7 2008, Chicago USA Success Probability – The paradox <ul><li>As Project Managers, we want...
Conclusions <ul><li>Effective project planning and scheduling requires the identification of the Resource Critical Path (a...
Conclusions (Cont’d) <ul><li>PM maturity must be measured for PM processes and also available data banks </li></ul><ul><li...
Conclusions (Cont’d) <ul><li>Monte Carlo approach has practical limitations and unknown inaccuracies when applied to summa...
A Few Useful Links <ul><li>http://www2.petrobras.com.br/ingles/index.asp   </li></ul><ul><li>http://www.spiderproject.com....
<ul><li>Russell Archibald Principal - Archibald Associates, USA/Mexico  russell_archibald@yahoo.com  </li></ul><ul><li>Vla...
PMI COS  5th Conference,  May 4-7 2008, Chicago USA
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SDPM in Brazil - 2007

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Description of the initial adoption of SDPM concepts from Russia in a couple of project in Oil & Gas in Brazil with the participation of Peter Mello (Brazil), Vladimir Liberzon (Russia) and Russell Archibald (EUA)

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SDPM in Brazil - 2007

  1. 1. The Application of Success Probabilities, Success Driven Project Management, and Some Critical Chain Concepts To the Oil & Gas Industry in Brazil Russell D. Archibald, USA Vladimir Liberzon, Russia Peter Berndt de Souza Mello, Brazil PMI COS 5th Conference, May 4-7 2008, Chicago USA
  2. 2. Presentation Outline <ul><li>The Need to Manage Uncertainties </li></ul><ul><li>Success Driven Project Management/SDPM Methodology </li></ul><ul><li>Unique Features of SDPM </li></ul><ul><li>Comparison with Critical Chain </li></ul><ul><li>Monte Carlo versus using 3 point estimates </li></ul><ul><li>Experience to date in Brazil </li></ul><ul><li>Conclusions </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  3. 3. THE NEED FOR MANAGING UNCERTAINTIES, RISKS, & RESOURCE RESTRICTIONS IN PROJECTS <ul><li>These occur in all complex projects </li></ul><ul><li>The need is to identify, monitor and control risks and resources </li></ul><ul><li>They must be reflected in plans & schedules </li></ul><ul><li>Methods to accomplish this developed in Russia are now being applied in Brazil (and 21 other countries </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  4. 4. Success Driven Project Management (SDPM) <ul><li>Planning Stage: </li></ul><ul><ul><li>Calculate finish dates & costs with the required probabilities of their successful achievement </li></ul></ul><ul><ul><li>Determine the Resource Critical Path/RCP </li></ul></ul><ul><ul><li>Set target dates, costs & other restrictions </li></ul></ul><ul><ul><li>Calculate success probabilities </li></ul></ul><ul><ul><li>Determine contingency reserves </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  5. 5. Success Driven Project Management (SDPM) <ul><li>Execution and Control: </li></ul><ul><ul><li>Calculate current probabilities of achieving goals </li></ul></ul><ul><ul><li>Track success probability trends </li></ul></ul><ul><ul><li>Manage contingency reserves </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  6. 6. Resource Critical Path/RCP <ul><li>True (resource) critical path must reflect ALL schedule constraints: resource, finance, supply, calendar, & imposed dates </li></ul><ul><li>All constraints must be considered in both forward & backward passes </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  7. 7. Success Probability <ul><li>System forecasts resulting required resources & contingency reserves based on user defined acceptable probability of success to meet specific scope, schedule & cost targets </li></ul><ul><li>System calculates the probability of meeting imposed targets (success probabilities) </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  8. 8. Eight Integration Methods Used <ul><li>Systematic scope definition (several indentured structures/WBS) </li></ul><ul><li>Network planning (CPM/PDM) </li></ul><ul><li>Resources: </li></ul><ul><ul><li>Consumable, renewable, utilized & produced </li></ul></ul><ul><ul><li>Units, teams/crews, interchangeable units or crews </li></ul></ul><ul><ul><li>Assigned to project activities </li></ul></ul><ul><ul><li>Constraints in both forward & backward passes </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  9. 9. Eight Integration Methods (Cont ’ d) <ul><li>Activity durations calculated: scope or volume ÷ rate using range estimates with or without Monte Carlo </li></ul><ul><li>True (resource) critical path calculated: </li></ul><ul><ul><li>Logical & schedule constraints </li></ul></ul><ul><ul><li>Resource, financial & supply limitations in both the forward and backward passes </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  10. 10. Eight Integration Methods (Cont ’ d) <ul><li>Risk & uncertainties simulated: probability distribution for main project results (project & its main phases finish dates, costs, resource requirements) </li></ul><ul><li>Actuals reported & compared, contingency reserves tracked </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  11. 11. Eight Integration Methods (Cont ’ d) <ul><li>Current probabilities of success calculated and trends determined for: </li></ul><ul><ul><ul><li>Schedules </li></ul></ul></ul><ul><ul><ul><li>Costs </li></ul></ul></ul><ul><ul><ul><li>Resources </li></ul></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  12. 12. Methods Unique to SDPM <ul><ul><li>Multiple breakdown structures </li></ul></ul><ul><ul><li>Resource information & analysis </li></ul></ul><ul><ul><li>Activity duration calculated or estimated </li></ul></ul><ul><ul><li>Resource critical path, resource floats, & resource contingency reserves </li></ul></ul><ul><ul><li>Risk simulation & success probability analysis </li></ul></ul><ul><ul><li>Success probability trends predicted and tracked </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  13. 13. SDPM versus CCM <ul><li>Resource Critical Path: </li></ul><ul><ul><li>All schedule constraints </li></ul></ul><ul><ul><li>Activity & resource assignment reserves </li></ul></ul><ul><ul><li>Total floats: forward & backward passes </li></ul></ul><ul><ul><li>Different ‘drum resources’ for various project phases </li></ul></ul><ul><li>Critical Chain: </li></ul><ul><ul><li>One ‘schedule drum resource’ defines the ‘schedule constraint’ and one ‘critical chain’ </li></ul></ul><ul><ul><li>Resource-leveled schedule set first, then determine the ‘critical chain’ </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  14. 14. SDPM versus CCM (cont’d) <ul><li>Many potential RCPs and paths with small floats may exist </li></ul><ul><li>‘ Feeding buffers’ not necessary: </li></ul><ul><ul><li>Don’t ‘protect’ any chain/path </li></ul></ul><ul><ul><li>Project time and resource buffers, yes: ‘contingency reserves’ </li></ul></ul><ul><li>CC is the only single sequence that shall not change during project execution </li></ul><ul><ul><li>‘ Feeding buffers’ may postpone planned dates, creating holes in CC </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  15. 15. SDPM versus CCM (cont’d) Risk Evaluation & Prediction <ul><li>Monte Carlo or range estimates </li></ul><ul><li>Predict user defined success probabilities to meet targets </li></ul><ul><li>Project buffers </li></ul><ul><li>Recommend using optimistic schedule dates </li></ul><ul><li>CCPM recommends using 50% probability duration, all extra time at end of CC: chain buffer </li></ul><ul><li>CC “shall never change” </li></ul><ul><li>CC says nothing about cost! </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  16. 16. SDPM versus CCM (cont’d) Progress Evaluation & Decision Making <ul><li>Project performance and buffer usage monitored by trends in success probabilities </li></ul><ul><li>Up = good </li></ul><ul><li>New risks are included as they occur </li></ul><ul><li>Buffer usage estimated qualitatively </li></ul><ul><li>Approach is linear </li></ul><ul><li>No quantification </li></ul><ul><li>Nothing on cost </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  17. 17. SDPM versus CCM (cont’d) Project Portfolio Management <ul><li>Planned as one large project </li></ul><ul><li>Projects in Portfolio may have different priorities for resource allocation </li></ul><ul><li>Simulate performance using portfolio success prob. trends </li></ul><ul><li>Projects in a portfolio shall be pipelined to avoid multi-tasking </li></ul><ul><li>Priorities not discussed </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  18. 18. SDPM versus CCM (cont’d) Periodic Schedule & Cost Performance Evaluation <ul><li>SDPM approach based on regular recalculations of project and portfolio schedules, costs, and success probabilities and their trends </li></ul><ul><li>Recalculations shall be minimized </li></ul><ul><li>Regular adjustment of schedule is “firefighting” </li></ul><ul><li>“ People are free to finish the work as soon as possible” </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  19. 19. MC vs Using 3 Estimates: Inputs <ul><li>Monte Carlo: </li></ul><ul><li>3 estimates made, prob. distributions assumed </li></ul><ul><li>Risk events ID’d, prob. Estimated </li></ul><ul><li>Conditional links may be used </li></ul><ul><li>Using 3 Estimates: </li></ul><ul><li>3 estimates made, durations and costs </li></ul><ul><li>Opt. 10% </li></ul><ul><li>Most prob. </li></ul><ul><li>Pess. 90% </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  20. 20. MC vs Using 3 Estimates: Process Methods <ul><li>Project execution simulated many times, activity durations and risk events via random number generator </li></ul><ul><li>Prob. curve set by number of cases for each duration </li></ul><ul><li>3 scenarios calculated with res. leveling & budgeting </li></ul><ul><li>Prob. distr. set via predetermined curve </li></ul><ul><li>Any reasonable shape may be used </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  21. 21. MC vs Using 3 Estimates: Completion Date <ul><li>Project finish date set to match desired probability under the defined distribution curve </li></ul><ul><li>The same </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  22. 22. MC vs Using 3 Estimates: Progress Evaluation <ul><li>Repeat process periodically, plot success prob. Trends </li></ul><ul><ul><li>Rising trend=good </li></ul></ul><ul><ul><li>Falling trend=bad </li></ul></ul><ul><li>The same </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  23. 23. MC vs Using 3 Estimates: Pro <ul><li>More accurate </li></ul><ul><li>Can show complex curves with more than one max </li></ul><ul><li>Fast and precise </li></ul><ul><li>Distribution may not be correct but results are repeatable, with consistent errors </li></ul><ul><li>Success prob. trend analysis is accurate </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  24. 24. MC vs Using 3 Estimates: Cons <ul><li>Time consuming </li></ul><ul><li>If activities are performed by same resources, results are not accurate </li></ul><ul><li>Corrective actions are not reflected in the simulations; results not accurate </li></ul><ul><li>Estimations are less accurate </li></ul><ul><li>Merge bias: see next slides </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  25. 25. MC vs Using 3 Estimates: Using a Summary Model <ul><li>For large projects people sometimes use a summary network </li></ul><ul><li>This loses links between activities, cannot simulate resources properly, produces low accuracy </li></ul><ul><li>Summary networks not required </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  26. 26. MC vs Using 3 Estimates: Merge Bias Question <ul><li>Exists when using summary models </li></ul><ul><li>Many paths merging at the end </li></ul><ul><li>Merge bias within summary tasks not considered </li></ul><ul><li>Corrective actions cannot be modeled </li></ul><ul><li>Merge bias inside the project is ignored </li></ul><ul><li>Merge bias within a portfolio is considered </li></ul><ul><li>Not important: success probability trends are useful and accurate </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  27. 27. The Russian Approach to Project Planning <ul><li>Soviet Union roots </li></ul><ul><li>Universal coding system </li></ul><ul><li>“ Scientific Work Organization” </li></ul><ul><li>Use of norms and standards </li></ul><ul><li>Emphasis on resource planning and schedule optimization </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  28. 28. Is this the real critical chain ? (Photo in Amazon, enjoying a couple of days off the Urucu/Manaus Project – Peter Mello, 2007)
  29. 29. Experience to Date: SDPM & RCP in Brazil <ul><li>First known application of SDPM happened at Urucu/Manaus Pipeline in October 2006 </li></ul><ul><ul><li>The project had started in 2004 and was facing major delays due to a segmented view of the project, with several separated set of schedules for different regions (geographic division) and different areas (scope, costs, logistics and supplies). </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  30. 30. Experience to Date: SDPM & RCP in Brazil <ul><li>First known application of SDPM happened at Urucu/Manaus Pipeline in October 2006 </li></ul><ul><ul><li>An integrated schedule and the use of simulations with resource restrictions helped Petrobras to criticize and complement new contractors’ plans for project recovery, with significant gains in productivity. </li></ul></ul><ul><ul><li>Subprojects started in 2007 included requests to new contractors to apply lessons learned with the use of RCP [PMI Global 2007, Cancún] </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  31. 31. Slowing Down to Speed Up !! <ul><li>What is expected with the adoption of Success Driven Project Management is the ability to identify what phases of the project should be delayed to make critical resources available to other critical phases, thus expanding the productivity in areas of greater working dependencies with other teams. </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  32. 32. Fragnets <ul><li>Fragnets are modeled phases of the project that are carefully planned to be applied to the whole project. </li></ul><ul><li>One example is the modeling of “ one km of pipeline ” </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  33. 33. Fragnets <ul><li>By using automated scheduling optimization and simulation, activities in each fragnet are reorganized to the best sequence to increase global production. </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  34. 34. Fragnets PMI COS 5th Conference, May 4-7 2008, Chicago USA Schedule optimization
  35. 35. Fragnets PMI COS 5th Conference, May 4-7 2008, Chicago USA 800 meters per day 1150 meters per day Slow down Speed up
  36. 36. Scheduling optimization in a few words <ul><li>Almost any network of activities can be improved if we simply try the alternatives. </li></ul><ul><ul><li>Jane takes 4 days to write a quality plan and 2 days to write a communication plan for the project. </li></ul></ul><ul><ul><li>If both plans are reviewed by her boss, who spends 3 days for each document, how long does this project take ? </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  37. 37. PMI COS 5th Conference, May 4-7 2008, Chicago USA
  38. 38. PMI COS 5th Conference, May 4-7 2008, Chicago USA 9 DAYS 10 DAYS
  39. 39. SDPM is expanding in Brazil <ul><li>STD is an engineering company developing several projects around Brazil for oil & gas. Starting October 2007, their project managers have been receiving training in PM based on PMI best practices and SDPM application concepts. </li></ul><ul><ul><li>A successful five day planning project for a hot-swap in a gas pressure reduction city-gate proved the importance of simulating schedules with corrective actions (optimistic x probable x pessimistic). After that training, all their new projects undergo a new planning phase with detailed scheduling never applied in their projects before. </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  40. 40. SDPM is expanding in Brazil <ul><li>Three new projects have started in January 2008. The average size of each of these projects is twice the size of the projects they had during 2006/2007. </li></ul><ul><ul><li>There are a total of 22 on-going projects with a total value of R$ 35 million (US$20.7 million) (61% of the company’s portfolio) </li></ul></ul><ul><ul><li>The three new projects surpass a total value of R$ 22 million (US$13 million) (39% of the company’s portfolio) </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  41. 41. SDPM is expanding in Brazil <ul><li>Several shared resources are still the same as the ones available for previous projects, but scheduling based in the Eight Integration Steps of SDPM has permitted portfolio resource planning with significant cost reduction. </li></ul><ul><ul><li>All new projects are planned under SDPM recommendation </li></ul></ul><ul><ul><li>All on-going projects are being re-evaluated to guarantee portfolio resource sharing </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  42. 42. SDPM is expanding in Brazil <ul><li>Before SDPM: Schedules had an average of 5 levels of detailing in the WBS and less than 2,000 tasks. </li></ul><ul><li>After SDPM: </li></ul><ul><ul><li>Schedules have multiple WBS, sometimes with over 9 levels of detailing and accurate resource planning. </li></ul></ul><ul><ul><li>A new “project interface phase” was introduced to reflect activities under the responsibility of the customer and subcontractors (to guarantee immediate analysis of project deviations due to external dependencies). </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  43. 43. SDPM is expanding in Brazil <ul><li>After SDPM: </li></ul><ul><ul><li>Acquisition of parts are planned using fragnets with estimates for early and late deliveries. </li></ul></ul><ul><ul><li>A “top-management summary schedule” with an average of 30-50 control points is used by the PMO and customer to follow project progress. </li></ul></ul><ul><ul><li>Detailed planning now surpasses 15,000 activities </li></ul></ul><ul><ul><li>Activities from many functional areas are now included in the planning for resource critical path analysis. </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  44. 44. PMI COS 5th Conference, May 4-7 2008, Chicago USA Three point estimates Most Probable applied Pessimistic applied Most Probable Planning Pessimistic Planning Optimistic Planning
  45. 45. PMI COS 5th Conference, May 4-7 2008, Chicago USA Optimistic with Critical Schedule Calculated
  46. 46. PMI COS 5th Conference, May 4-7 2008, Chicago USA Success Probability PMI COS 5th Conference, May 4-7 2008, Chicago USA Tipical Schedule The real world Buffer protection
  47. 47. PMI COS 5th Conference, May 4-7 2008, Chicago USA Success Probability – The paradox <ul><li>As Project Managers, we want all the time and resources made available (pessimistic readiness) </li></ul><ul><ul><li>Over-protected projects aren’t cost effective and we cannot afford having results behind our competitors. </li></ul></ul><ul><ul><li>Unprotected projects (single estimate) will simply take longer and be more expensive than planned, leading us to unpredictable results. </li></ul></ul>
  48. 48. PMI COS 5th Conference, May 4-7 2008, Chicago USA Success Probability – The paradox <ul><li>As Project Managers, we want all the time and resources made available (pessimistic readiness) </li></ul><ul><ul><li>Over protected projects aren’t cost effective and we cannot afford having results after our competitors. </li></ul></ul><ul><ul><li>Unprotected projects (single estimate) will simply take longer and be more expensive than planned. </li></ul></ul>SDPM will create calculated critical schedules that will establish the necessary balance between cost & time effectiveness and the expected success probability, according to goals agreed with stakeholders.
  49. 49. Conclusions <ul><li>Effective project planning and scheduling requires the identification of the Resource Critical Path (as defined in this paper) </li></ul><ul><li>Risk management and success probability trend analysis must be integrated into daily work of project planning, scheduling, and controlling </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  50. 50. Conclusions (Cont’d) <ul><li>PM maturity must be measured for PM processes and also available data banks </li></ul><ul><li>Progress evaluation through success prob. trend analysis is effective using 3 estimate approach; merge bias is not important </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  51. 51. Conclusions (Cont’d) <ul><li>Monte Carlo approach has practical limitations and unknown inaccuracies when applied to summary networks </li></ul><ul><li>RCP and SDPM are proving to be practical and effective in the field in Brazil </li></ul><ul><li>Western PM software vendors should include resource constraints in both forward and backward passes for network analysis </li></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  52. 52. A Few Useful Links <ul><li>http://www2.petrobras.com.br/ingles/index.asp </li></ul><ul><li>http://www.spiderproject.com.br [go to ‘seminars’] </li></ul><ul><li>http://www.spiderproject.ru/aboutus_e.php </li></ul><ul><li>http://www.russarchibald.com/ [go to ‘author>recent papers’] to download this present paper plus: </li></ul><ul><ul><li>Liberzon, Vladimir, and R ussell D. Archibald, “ From Russia with Love: Truly Integrated Project Scope, Schedule, Resource and Risk Information,” PMI World Congress- The Hague, May 24-26, 2003; </li></ul></ul><ul><ul><li>Archibald, Russell D., Peter Berndt de Souza Mello, & Jefferson Guimarães, “The Application of SDPM, Critical Chain and Portfolio Project Management Principles to the Construction of the 670 km Urucu/Manaus (Petrobras) Pipeline,” PMI World Congress-Latin America, Cancun, MX, Nov. 12-14 2007 </li></ul></ul>PMI COS 5th Conference, May 4-7 2008, Chicago USA
  53. 53. <ul><li>Russell Archibald Principal - Archibald Associates, USA/Mexico russell_archibald@yahoo.com </li></ul><ul><li>Vladimir Liberzon </li></ul><ul><li>General Director, Spider Project Team, Russia &quot;Vladimir Liberzon&quot; <spider@mail.cnt.ru> </li></ul><ul><li>Peter Berndt de Souza Mello Director - X25 Treinamento e Consultoria, Brazil [email_address] </li></ul>
  54. 54. PMI COS 5th Conference, May 4-7 2008, Chicago USA

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