Critical Chain Project Management

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Critical Chain Project Management

• Lisa Stensland
• Sr. Project Manager
• Administrative Systems

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Successful, Challenged, or Failed?
Success On time, within budget, committed
scope Challenged Late, overbudget, or lacking
key scope Failed Canceled before completion or
never implemented
According to the 2004 Standish report
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The answers
15 of projects were cancelled before they
finished
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The answers
51 of projects were late,overbudget, or lacked
scope(probably due to schedule challenges)
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The answers
Only 31 of projects finished on-time, within
budget, and with committed scope
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Consider this

• The longer a project takes
• The more it costs
• The longer it takes
• The more opportunities exist to change scope
• The more changes in scope
• The more it costs
• The longer it takes

Perhaps we should figure out a way to prevent
projects from taking longer than they absolutely
need to!
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Firstthe Old Way
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Critical Path Method
Wellabout 5 days
I am working on another project
I get interrupted alot
Something usually goes wrong
So10 days!
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Critical Path Method

• Track the project based on task due dates
• React when something is late
• REALLY react when something on the critical path
  is late
• Hope and pray that the project comes in on time

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Laws of Project Management

• Murphys Law
• What can go wrong will go wrong
• When things cannot get any worse, they will
• When things appear to be going well, you must
  have overlooked something

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Estimation Variation
50 confidence
Safety
10 confidence
90 confidence
2
5
10
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Estimation Variation
Since all tasks are scheduled with 90
confidence, why are most projects still delivered
late, overbudget, or with removed scope?
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Laws of Project Management

• Parkinsons Law
• Work expands to fill the time it is given
• Student Syndrome many people will start to
  fully apply themselves to a task just in the wake
  of a deadline
• Driven by focus on the task due dates
• As long as I get it done on time, everything is
  dandy!

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Now what?
Focus on the date that the task is due
If something goes wrong, task will be late. If
this happens on the critical path, the project
will be late.
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Whats wrong with CPM?

• Buffer built into each individual estimate is
  overkill and inefficient
• Tracking individual task due dates to indicate
  project health encourages
• Estimates that are commitments
• Work expanding to fill the time available
• Encourages individual ownership of individual
  commitments rather than team ownership of the
  team commitment

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What is Critical Chain Project Management?

• A way to schedule and track a project that
  encourages
• An aggressive schedule that makes it more
  possible to deliver early
• Team focus
• Team ownership of the team commitment

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What Critical Chain does differently

• Effective utilization of safety buffers
• Focus on start dates
• Focus on aggressive, focused completion of tasks
• Take advantage of early finishes
• Focus on buffer utilization for project health

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Effective utilization of safety buffers

• Consider an insurance analogy
• 3 homes need to insure against risk
• The old way (CPM)
• Assumes each home will suffer a serious problem
• So each home self-insures
• Not enough to cover a serious problem
• The Critical Chain Way
• Assume that not every home will get hit with a
  serious problem
• Pool your resources
• Enough to cover a serious problem, possibly more

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Effective utilization of safety buffers
Task 1
Do not use safety buffers in the tasks
Task 2
Task 3
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Effective utilization of safety buffers
Task 1
Do not use safety buffers in the tasks
Move the safety buffer to protect the commitment
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Effective utilization of safety buffers
Safety
Safety
End
End
Safety
Safety
Safety
Safety
Safety
Safety
Remove the safety from the individual tasks
Put it where the project benefits
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Buffer Placement

• Project Buffer
• Between the last task of the aggressive project
  schedule critical chain and the committed end
  date
• Feeding Buffers
• Protect the critical chain from being impacted by
  non-critical chain
• Place at the end of non-critical chains before
  they connect to the critical chain

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Buffer Sizing

• There are multiple ways to size the buffers
• 50 of the sum of task durations on the chain
• Conservative
• Great for first timers thats us!
• SSQ
• Square root of the sum of the squares of the
  differences for the tasks along the chain
  (??!?!?!)
• More aggressive

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Creating a Critical Chain Schedule

• Build the WBS
• Identify dependencies
• Gather estimates with 50 confidence
• 1 set 50
• 2 sets 50 and 90 - check for difference
• 1 set 90 - and cut in half to get to 50
• Build your project schedule using LATE FINISH
  (rather than early start)
• Resolve resource contentions (leveling)
• Start with the resources on the critical chain
  first!

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Creating a Critical Chain Schedule

• Identify the critical chain
• Exploit the critical chain to identify any
  resequencing that can shorten the duration
• Add the Project Buffer to the end of the critical
  chain
• Add Feeding Buffers to all non-critical chains
  that feed the critical chain
• Resolve new resource contentions

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PeopleSoft 8.9 Upgrade Schedule
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Critical Chain Project Tracking

• For each task, collect
• Actual Start Date
• Days Remaining
• Actual End Date
• Calculate the impact on the project and feeding
  buffers
• If a task is late or expected to be late, consume
  days from the appropriate buffer and DOCUMENT WHY
• If a task is early (completes ahead of estimate),
  replenish the appropriate buffer
• Monitor trends in buffer utilization for issues
• Use a fever chart to assess project health

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Execute contingency plan
Identify contingency plan
All is good
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Take advantage of early finishes

• Tasks may actually finish early!
• Treat the transition of tasks as a baton race
• Keep appropriate people informed that an early
  finish may be imminent so they can be prepared to
  grab the baton and run!

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Focus On

• Starting tasks on time
• Completing tasks as aggressively as possible
• Maintaining quality, despite aggressive push
• Amount of Project Buffer that is consumed

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Differences
Critical Chain
The Old Way
Uses worst-case estimates
Uses average-case estimates
Protects individual tasks with safety
Protects project with buffers
Starts tasks as soon as predecessors are done,
finishes tasks as quickly as possible. 
Starts and finishes tasks at scheduled start and
finish times
Individual ownership of task completion
Team ownership of project completion
Project health is based on individual task
completion
Project health is based on days used from the
project buffer
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Benefits of Critical Chain

• Protection against Murphys Law
• Take advantage of early finishes
• Team protection of the buffer
• Opportunity for team to focus
• Visibility to aggressive, possible, and realistic
  schedule
• Better visibility to when project is in trouble
• Strong response to buffer changes

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Challenges

• Resource multi-tasking goes against key goal of
  requiring focus to complete tasks as quickly as
  possible
• Works best in an environment where everyones
  doing it
• Cultural change required
• Tools availability but a spreadsheet will help
• Moving target for a completion date

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What Had to Change?

• Educate the project and management team on the
  methodology to get buy-in
• Estimate aggressively by removing safety from
  individual tasks
• Trust management to not hold staff accountable to
  aggressive estimates without safety
• Minimize multi-tasking
• Track using buffer consumption

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If its so great, why isnt everyone doing it?

• Two economists and the hundred dollar bill
• Healthy level of skepticism to new solutions that
  make big promises
• Process innovation brings unique challenges,
  compared to product innovation
• You can prove a light bulb works without showing
  how it works
• To prove a process works, people must understand
  and accept how it works before the light bulb
  goes on

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If its so great, why isnt everyone doing it?

• Visibility challenges
• CCPM making excellent in-roads during the 90s
• April 2000 tech bubble burst
• CCPM helps shorten development time
• Interest shift to cutting costs
• Decrease in consulting spending

David Higgins article March 2003, Cutter Journal
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Other Places to get Information

• Excellent white paper
• http//www.focusedperformance.com/articles/ccpm.ht
  ml
• Real-life project example
• http//pqa.net/ProdServices/ccpm/W05002005.htmlIn
  troduction
• Yahoo Discussion Group
• http//finance.groups.yahoo.com/group/CriticalChai
  n/
• March 2003 Cutter Journal lots of great
  articles
• http//www.cutter.com/research/freestuff/itj0303.p
  df
• Book Critical Chain Project Management, 2nd
  edition, by Lawrence Leach