“Having a causal picture of the business makes it possible to explain the forces driving performance, and answer ‘how did we get here?’. This is a prerequisite for deciding what policies and actions will push future performance in the desired direction,” explains Donna Mayo, strategy expert at Sage Analysis Group.
Development projects are the lifeblood of many organizations. This is true not only for ‘‘project-based’’ organizations such as civil construction, shipbuilding, or aerospace companies, but also for companies that depend on a flow of new products and services to remain competitive, such as companies in the automotive, electronics, and software industries. Delivering new products and services on time and within budget increasingly determines success or failure of organizations.
However, most large, complex development projects experience substantial cost and schedule overruns. Cost and schedule overruns on projects have persisted for decades despite advances in the field of project management. Why do projects continue to perform poorly despite these advances and substantial investments in tools and techniques? There are several reasons:
- Unplanned problems and changes frequently occur: although a few unplanned problems or changes (e.g. worker shortages, delayed decision making, schedule changes, etc.) may be manageable individually, the compounding impact of several them together can often be much greater.
- Development projects are usually complex with multiple interdependent parts: When one part of the work is changed or delayed it can ripple through to change, delay, and disrupt other parts of the project. Large, technically complex programs with tight overlap, little schedule flexibility, and scarce skills are more vulnerable to change.
- There can be long time lags to realize full consequences of actions and events: The full impacts of project changes can take significant time to unfold. A design error may take many months to find, during which time ongoing work will build upon the faulty design, compounding and propagating the initial error. When an initial event is separated far in time from its full consequences, accurately diagnosing its impacts can be challenging.
- Cause and effect impacts over time are not well captured or reported by typical project planning tools: Most tools don’t address “softer” factors that can play a significant role in determining overall project performance (e.g. design maturity, rework, schedule pressure, worker morale, etc.) These factors are harder to quantify hence they are not readily captured by most tools.
Sage’s Project Management Modeling System (PMMS) gives us a platform to create custom models of individual projects reliably and rapidly. Our models help project teams understand the true status of projects and how potential actions will or have affected performance. The core capability of our models is to simulate how a project performs under different conditions. This helps analyze options and scenarios and assess full impacts across a project over time – including how issues in one part of a project impact other parts of the project.
Most of our project simulation analyses focus on improving future performance. A small but significant number of assignments also involve retrospective analysis to help resolve contract disputes. We have helped over forty major contract disputes – all complex, with many involving delay and disruption from unplanned events and conditions.