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Despite the best efforts of dedicated project teams, many projects suffer from one or more (or all!) of the four project failures: Late, Over Budget, Below Specification or Below Quality. A consistent driver is that the first of these – being late - leads inexorably to the other three, and in turn to significant business impacts.

So what can CCPM (Critical Chain Project Management) do to prevent this? In a single word, the answer is speed. Simply put, CCPM makes projects run faster - much faster. CCPM speeds up project duration by 20% – 50%, and enables on-time delivery of more than 95%. By enabling projects to run fast and to time, CCPM prevents the cause of many project failures.

CCPM does this by replacing in-built time-wasting issues that exist in ‘conventional’ project management methods.

Conventional schedules use contingency built in to each task. This is often large, due to individual self-protection, and often wasted according to Parkinson’s Law and Student Syndrome behaviours. CCPM replaces task-level contingency with a single, aggregated time contingency, known as the ‘Project Buffer’ placed at the end of the schedule. This absorbs the ebb and flow of variation in task completion times, protects the project end date, and removes the task-level ‘padding’ that so often gets squandered with Parkinson’s Law and Student Syndrome.

CCPM also challenges the dominant use of Critical Path, pointing out that it ignores a

key factor in its calculations: resources. Unless the project is fully resourced, without any resource clashes, this can lead to problems when a resource becomes double-booked. Crucially, this is not shown as being critical by CP and can be missed. CCPM, on the other hand, includes resources from the start and identifies when tasks are critical because of resource constraints, showing these ‘resource dependencies’ on the project Gantt chart.

CCPM recognises the detrimental effect of multi-tasking and seeks to create an environment where multi-tasking is minimised overall and outlawed on the project’s critical tasks, ensuring that the most important tasks on the project get dedicated resources.

CCPM implements greatly improved monitoring and control: firstly by enabling the amount of contingency

Spotlight on Methodology

The Critical Benefit of Critical ChainGary Palmer

Figure 1: Fever chart showing buffer penetration vs percent complete

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used and remaining (the project buffer as above) to be visible, but also by combining this with the amount of progress on the critical tasks in a graph; the ‘Fever Chart’. This is a graphical display which instantly and objectively brings together these two key project measures, and not only plots the project’s current position but also clearly shows if a trend is happening that might mean that the project is using its contingency too quickly.

However the real power of CCPM is that each of these improvements not only resolves a specific problem

inherent in conventional methods and provides a ‘local’ improvement, but together these operate collectively and synchronously to enable the whole scheduling and execution process to operate more efficiently, and not only to deliver faster projects but also to create a better working environment for all.

The even better news is that CCPM not only works for single projects, but can also be applied in multi-project environments at programme and entire portfolio levels, and can be applied to any sector or industry.

Spotlight on Methodology

Earned Value and Critical Chain: The Missing LinkAlex Davis

Project Managers need a method to help control of time and cost. A method that can improve the decision-making process by providing more robust information about delivery. A method that allows all stakeholders, not just the bankrollers and politicians, to be kept informed of physical progress, as well as to understand which options are available to recover performance when things don’t go according to plan.

Earned Value Management (EVM) is a project control process based on a structured approach to planning, cost collection and performance measurement.

This means having a time-phased budget of work, aligned to the project’s objectives. It also requires a schedule, with resources and costs for labour,

equipment and materials. It also needs a way of objectively measuring physical progress. This is achieved by using an Earned Value Technique (EVT). It can be tailored to measure any part of the project, at any level. The result is a Performance Measurement Baseline (PMB) and is essential to conducting successful EVM.

The most that any Project Manager or stakeholder wants to know is this:

l How much have I got to spend?

l What physical progress has the project made?

l How much have I spent achieving it?

The answers to these questions are illustrated in the classical three-line graph.

Figure 2: Earned Value and the power of forecasting

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The data gathered can be used to establish the Cost and Schedule Performance Index (CPI and SPI) values. These inform the Project Manager as to how efficiently the project is using funds to make progress. A CPI or SPI greater than 1 is favourable. Less than 1? Not so good. This information gives the Project Manager the ability to forecast. You have the ability to estimate how much time and money it will take to complete the project. This is based on the project’s current performance and assuming that this performance does not change from ‘time now’ to the project’s end.

So what has Earned Value got to do with the Critical Chain Project Method? Earned Value can help by providing a way of measuring the physical progress of any project. CCPM projects can be managed in this way, too. Earned Value can link the amount of physical progress to the amount of buffer consumed thus far. The link between Earned Value and buffer can be seen in the Fever Chart or Burndown chart. The example in figure 1 has been generated with an average buffer burndown (the blue line) as a basis for comparison. The three coloured regions are arbitrary in this instance. You can set whatever values you wish for red, amber and green. Importantly though, it’s all about using the information provided to make better decisions – not just sitting there and admiring it!

The Estimate at Complete (or EAC), for time and cost is an estimate calculated using Earned Value. It provides the Project Manager with a time and cost to finish the project. If the value of the EAC overruns the project end date, it will consume some of the project buffer. As the project is executed and progress made, the Project Manager can start to build a picture of how much buffer is being consumed. Earned Value provides a way of forecasting how much time and money may be needed to complete the project, assuming performance does not change. By integrating Earned Value and CCPM, the Project Manager has a way of finding out if the amount of project buffer set at the project start is going to be sufficient to complete all the work. This is a powerful method of increasing the predictability of project success.

Pitfalls to avoid in implementation:

l Be careful when interpreting the data for the first five or six reporting periods – this is true for any project using Earned Value - as the values can move rapidly from one extreme to the other in the early stages of execution.

l Ensure that the buffer is allocated to a significant and relevant project milestone. There is no point in putting a buffer against a milestone or event that no-one is interested in!

l Make sure that the buffer is not double counted against a significant milestone and the overall project buffer.

l Make sure the buffer is set correctly as a percentage of the relevant critical chain – too low a value (for example 5%) may mean running out of buffer too soon.

l When updating the physical progress on your project, ensure the remaining work and percentage completed are both taken into account.

l When generating the buffer, be flexible with the amount of time taken from the task to place in the project buffer. For example, 20% may be sufficient for an activity that is well known and repeatable, but you might want to adopt 40% or 50% for the buffer when planning an activity that is either rarely performed or constitutes part of a project that is new to the business.

Get Involved

Earned Value and CCPM are powerful techniques to help keep delivery within time and budget. Together, they are a technique that can help change behaviours for supply chain and client like. Are you interested in contributing to the debate? We need volunteers that use the method and are willing to share their experiences with the project management community. If you would like to help, please contact the Association for Project Management Planning, Monitoring and Control Specific Interest Group (PMC SIG) at pmcsig@apm.org.uk for more information.

About the Authors Gary PalmerGary has more than 25 years’ experience in Project, Program and Portfolio Management, as well as Testing & Quality Management, mainly in I.T. across multiple sectors: manufacturing, insurance, banking, telecoms, retail and the public sector, using multiple standards including Prince, PMI/PMBOK, and various project methods including Waterfall, RAD and Agile variants. For the past three years Gary has specialised in Critical Chain Project Management (CCPM) at Critical Point Consulting.

Alex DavisAlex has more than 20 years’ experience in Project and Programme Management, explosives development, safety and survival equipment and communications systems using Earned Value, PRINCE2 and Critical Chain Project Management (CCPM). He has written and presented on the subject of Earned Value, Earned Schedule, project controls and measurement (including its abuse). He is also a member of the APM PMC SIG (Association for Project Management Planning, Monitoring and Control Specific Interest Group) and a member of the APM’s SIG Steering Group. He helped to write the recently published Earned Value Handbook and the Scheduling Maturity Model. He is one of the authors for the PMC SIG’s newest work – The Planning Guide.

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