The Project Management Body of Knowledge (PMBOK Edition 6) advocates the use of Monte Carlo simulation for performing quantitative risk analysis.
In the project management discipline, Monte Carlo method, or probability simulation, is a computer-based mathematical technique used to understand the impact of risk and uncertainty. Its most common use is in the creation of the project schedule and the determination of the project end date. The Monte Carlo method was invented by scientists working on the atomic bomb project in the 1940s. They named the method after the city in Monaco famed for its casinos and games of chance.
Monte Carlo simulation provides a number of advantages over deterministic, or single-point estimates:
Helps to evaluate the overall risk in the project.
Converts uncertainty on the project into tangible numbers to assess the overall impact to the project.
It can be applied to assess the … Read More »
Among other changes, the Project Management Institute in their latest Project Management Body of Knowledge (PMBOK Edition 6) has sensibly renamed the “Time Management” knowledge area “Schedule Management” to distinquish it from personal Time Management. However, personal Time Management skills remain essential for our success in any project or workplace.
While we cannot actually manage time, which zooms on relentlessly, we can make better use of this scarce resource by working smarter to improve our personal productivity while combating the rising tide of workplace stress.
People who manage to get a lot of value-added work accomplished each day aren’t superhuman; they’ve simply mastered a few simple tools and techniques that we’ll discuss here.
Time management is about more than just managing our time. It is about setting priorities and taking charge. It often means changing habits or activities that cause us to waste … Read More »
“You’ve got to know when to hold ‘em
Know when to fold ‘em
Know when to walk away
And know when to run.”
Kenny Rogers – “The Gambler”
“The Gambler” reminds us that in poker, folding is part of the game. It allows us to take risks, knowing that if things don’t take a positive turn, we can always abandon the pursuit, although as in poker our project might be seduced by sunk costs – irreversible financial “investment.”
In 1996 there was a fatal attempt to climb Everest, when five people died on the mountain unwilling to heed the mandatory turnaround time and pull the plug on an expedition that faced deteriorating conditions. How do these projects continue in the face of evidence that the plug should have been pulled? How can we make sense of … Read More »
Authors launching their books sometimes find themselves at a bookstore or other venue surrounded by empty seats except perhaps for their loyal family members, a solo ardent fan, random stragglers, and bored staff. Fortunately, my frugal, hooplaless and haka-free book launch collared a few curious people. Here’s me with colleagues and friends from our MBA days (some 30 years ago) including in the foreground Mark and Murray – successful entrepreneurs and clearly extremely intelligent and very discerning readers!
Click here for the FREE first chapter of this 204 page book. If you want a hard copy of the entire book please contact me by email email@example.com. The book will cost you NZ$38, which sum includes GST and free delivery within NZ.
The book is easy-to-read and is written in a friendly, … Read More »
Predicting project completion times is one of the challenges of Project Managers. Project schedule overruns are quite common due to uncertainty in estimating task durations, lack of historical data, inadequate skill, etc.
We could simply add the usual 10% schedule contingency to help ensure we finish our project on time or maybe we could take a more scientific approach based on a beta (β) frequency distribution and the PERT (programme evaluation and review technique) formula:
In this situation, the project critical path BET = (O + 4ML + P)/6 = (22 + 160 + 100) = 47 days, the Standard Deviation = (P – O)/6 = 13 days, and Contingency = Standard Factor x Standard Deviation. The Standard Factor is the same for all projects. As with all estimates, their accuracy depends on the accuracy of the input data. To … Read More »
Estimation is notoriously difficult. Projects by definition are unique ventures. We do not have the luxury of “having done it before” enjoyed by our operational colleagues – something is always different. But if it were just difficult we would expect to err in both directions – we would over-estimate as much as we under-estimate. Whereas the latter is common, the former is not – except perhaps when quoting a fixed price to a client. We know that our track record is poor but it doesn’t seem to help us – we are not improving. Rather than accept inaccurate estimation as an inevitable part of project management life, the application of good practice should significantly enhance the resultant estimates. The following ideas may help:
Check we’ve identified all the work to be done, including all those jobs we do as PM – … Read More »
Just because someone has an idea for a project, doesn’t mean it should go ahead.
An organisation’s process for deciding which projects get dropped or deferred (often a euphemism for “dropped”) and which ones get approved is sometimes intuitive, informal, ineffective and inconsistent; the equivalent of rolling dice or the random throwing of darts. Each project has different costs, benefits and risks, and rarely are these known in advance with much certainty.
Rational project selection is an important process, but it’s not easy and many organisations struggle with issues such as running too many projects at once, misaligned business goals and projects, poor co-ordination between projects, lack of management commitment, deficient cross-functional collaboration, resistance to change, reluctance to terminate poorly performing projects, no attempt to check if project benefits have been realised, and finding the right balance between smaller short-term projects that … Read More »
One challenging thing to deal with as a facilitator is the “difficult” participant.
Sometimes tricky behaviours will emerge during a training session and often when participants don’t feel safe, valued or heard. Much of this behaviour is amusing and tolerable providing it doesn’t impinge on other’s learning. We’ve got the prisoner, the latecomer, the sleeper (although, sleeping I don’t mind; it’s the snoring that might annoy), the know-it-all, the side conversations, the bored, the confused, the domineering, the challenger, and the otherwise preoccupied – the text messenger. In some thirty years of training I’ve met them all.
It is not uncommon to find at least one participant in a workshop who is not fully or positively engaged. When confronted with such behaviour, we might step back and objectively assess what might be the root cause of their behaviour. For example, why would someone … Read More »
In a rush to get projects done, one of the most often overlooked, but critical, tasks of a project manager (PM) is conducting the project close-out step. The project close-out, closing, closure, termination or finish phase is the fourth and last phase in the project life cycle. In this phase, we formally close our project, and evaluate and report its overall performance.
Once the project product(s) has been produced and accepted by our sponsor and customer, our PM responsibilities continue to ensure that the project is properly closed down. A stakeholder acceptance meeting, as the name implies, is when our project team meets with other key stakeholders to review the project product and ensure that it is acceptable.
But sometimes projects take on a never-ending characteristic. They go into limbo land and are never allowed to close often because … Read More »
If we were to look up the definition of the word myth, we would find that one definition is that a myth is a “widely held, but false belief or idea.” In many respects a myth is much the same as a false assumption – “factors that, for planning purposes, are considered to be true, real, or certain without proof or demonstration.” In other words, if we know that a belief is false, then it is not an assumption. Also, if we know something to be verifiable then it is not an assumption but a fact. Importantly, all assumptions are risks and should therefore be recorded and subject to risk analysis.
Myth 1: All risk is bad. Risks are potential problems, and if they happen then we are in trouble. The Truth. Risk includes both threats and opportunities, … Read More »