Transcript Corporate Project Management with SPIDER PROJECT

Infrastructure Projects in
Russia
Vladimir Liberzon, PMP
Spider Project Team
Introduction
• In this presentation we will discuss proven
tools and techniques that are applied to
management of large-scale infrastructure
projects and programs in Russia
• The questions during the presentation are
welcomed!
Part 1
Large-scale Infrastructure
Programs in Russia
Overview
Infrastructure Programs in Russia
• Russia launched many large-scale state
infrastructure projects last years.
• They include
– Development of Sochi region as Recreation Area and
preparation of Winter Olympic Games 2014,
– Construction of trans-Syberian highways,
– Construction of Dams and Power Plants around Russia,
– Development of Russian Pacific Area and preparation
of Asia-Pacific Summit in 2012,
– Nuclear Power Plants Construction Program, etc.
Infrastructure Programs in Russia
• These programs have multi-billion budgets, involve
many organizations and include many inter-related
projects.
• Our company is involved in management of almost
all of them. We participate as consultants, coaches
and members of program management teams.
• Management of such programs is very complex and
we will discuss its organization and management
approaches that proved their efficiency.
Sochi 2014
Winter Olympic Games 2014
• Preparation of Winter Olympic Games 2014 Program
includes 213 construction projects.
• They include
– Construction of Olympic objects like stadiums, arenas,
tramplines, ski areas, etc.
– Transportation infrastructure including roads, rail roads,
airport
– Utility infrastructure,
– Energy infrastructure including Power Plants, electric
lines, gas pipelines
– Hospitality infrastructure including Olympic villages,
hotels, parks and recreation areas,
Winter Olympic Games 2014
• Sochi Olympic Games will be held at two major
areas:
• one of them is on-shore cluster with Stadiums for
ice hockey, figure skating, curling, and similar
sports,
• Mountain cluster will be host for slalom, downhill,
biathlon
• These clusters will be connected by auto and rail
roads through mountains. Construction of this
roads includes six tunnels and eight bridges
Winter Olympic Games 2014
• Development of Sochi area will also include
• gas pipeline construction,
• creating of area transport infrastructure
(widening of existing rail road,
• construction of roads on the shore and in
the mountains)
Trans-Syberian
Highways
Trans-Syberian Highways
• Only the railway connects Russian Pacific Area
with the rest of Russia.
• The program launched now will connect all parts
of Russia by modern highways.
• Road construction projects are simultaneously
launched in Russian Pacific Area and in Siberia.
Trans-Syberian Highways
• In the Pacific Area the program includes
following highway construction projects:
«Amur»
Chita - Khabarovsk
2097 km
«Kolyma»
Yakutsk - Magadan
2021 km
M-56 «Lena»
Never - Yakutsk
1157 km
M-60 «Ussuri» Khabarovsk - Vladivostok
756 km
«Vostok»
824 km
Khabarovsk - Nakhodka
Trans-Syberian Highways
• There are several dozens construction
companies that build these roads.
• The program is managed by specially created
state owned management company.
Boguchansk Dam
Boguchansk Dam
• Boguchansk Dam in the middle of Siberia
on Angara river is one of the largest.
• Planned capacity is 3000 Mv
• Length exceeds 2.5 km,
• Artificial lake will cover 2,326 km2
Development of Russian Pacific Area
• Russian Pacific Area Development Program has
top priority.
• Russian Government invests huge money to
develop this area that was always remote and
unpopulated.
• This program will create a new face for
Vladivostok, Russian Pacific Capital.
• Two huge bridges over the ocean will be built.
Development of
Russian Pacific Area
• Bridge to Russkiy Island:
– Total Length - 3100 m
– Central Part - 1104 m
– Width of the road - 23,8 m
– Pylon Height - 320 m
– Height over sea - 70 m
Other Programs
• Russia plans to invest more $60bln in the construction of
new Nuclear Power Plants
• Russia plans to construct high speed railway between
Moscow and St. Peterbourg
• Russia invests in the development of modern technologies
(Nano technologies in particular)
• Economic crisis somewhat slowed the development but
major programs did not stopped.
Program Management
• All large-scale programs are managed by specially
created management companies:
–
–
–
–
–
Olimpstroy for Sochi 2014
Far East Directorate for Pacific Development Program,
Far East Road Construction Directorate,
Atomenergoprom for Nuclear Power Plants Program,
Etc.
• Management of Russian large-scale programs is based
on similar approaches that we will discuss in this
presentation.
Part 2
Program, Portfolio
Management System
Organization
Program and Portfolio Management
Requirements
 To make Programs and Portfolios manageable there
are certain requirements to all Program/Portfolio
participants and projects that include:
 Common methodology shall be used for scheduling,
budgeting, reporting and analyzing project data,
 The same or compatible PM software shall be used,
 The same WBS templates shall be applied to all projects
in the program/portfolio,
 The same resource, cost, material dictionaries shall be
used in all schedule models and reports,
 The same production norms and unit costs shall be used
for contracting and estimating project performance
Program Management Office
• PMO is an organizational unit to centralize
and coordinate the management of projects
under its domain. This unit was created in
every Program management organization.
• Main departments of PMO (by functions):
–
–
–
–
Methodology
Analysis
Correspondence and Archives
Program/Portfolio Management
PMO – Methodology Department
• Main functions of Methodology department:
– Development and actualization of the Project
Management Guidelines and other Program
management standards and requirements,
– Organization of Project staff training,
– Consulting, coaching, auditing Program participants
– Development and actualization of the organization
knowledge base.
PMO – Analysis Department
• PMO Analysis department:
– Develops and implements Program dictionaries and
reference-books for costs, resources, materials
– Develops project WBS and other templates
– Helps project planners with creating project
computer model, project scheduling and budgeting,
performance monitoring and reporting organization,
– Develops and applies standards for group work with
the Program files and data.
PMO – Analysis Department
• PMO Analysis department:
– Develops and works with the Program computer
model,
– Regularly collects and analyzes actual data,
– Manages Program computer models archives,
– Supplies project stakeholders with the performance
reports and other necessary information,
– Maintains PMIS and data safety.
PMO – Archive Department
• PMO Communication and Archive department:
– Manages communications with program
stakeholders,
– Manages program archives,
– Creates and maintains the library of past projects
archives.
PMO – Program Management Department
• PMO Program Management department
functions:
– Program Scheduling and Management,
– Management of project priorities,
– Management of Program Risks,
– Dealing with conflicting and competing project
requirements,
– Analysis of change requests and Integrated
Change Control
PM Information System
• Most large-scale programs in Russia are
managed using Spider Project software that is
considered as most functional, powerful and
flexible system.
• Spider Project usage is required from all
programs participants. It makes data
consolidation and management easier and
more reliable.
PM Information System
• One of the reasons for selecting Spider Project as the
program management tool is based on its ability to
work with physical quantities (volumes) of work to be
done on project activities.
• It helps to implement corporate norms like unit
(physical) costs, unit material requirements, resource
productivities (units per hour), etc.
• Spider Project permits to create program (corporate)
templates, dictionaries, and databases (referencebooks) that are necessary for proper program
management.
Part 3
Program/Project Data
Data requirements
• The requirements to the data that are used for
program planning and control may be divided into
two main groups:
– High level requirements based on program/portfolio
management needs,
– Low level requirements that shall be applied to creating
project computer models.
• High level requirements consider data organization,
• Low level requirements cover details and instructions
on creating project computer models.
Organizing data
• The same Project, Phase, Activity, Resource,
Material, and Department coding structures are used
in all projects,
• Resources that are used in all projects belong to the
program (corporate) resource pool,
• Resources of the same type share the same
characteristics (like cost, production rates, material
consumption per work hour),
Organizing data
• Program management systems have specific
requirements that are vital for successful
implementation.
• It is necessary to be sure that:
• WBS structures that are used in different projects of
the program are compatible,
• Project costs have the same structure in all projects
(same cost components are used),
• Cost accounts are the same in all projects,
Organizing data
• Activities of the same type have the same
characteristics in all projects (like unit cost, material
requirements per work volume unit, etc.),
• Typical resource assignments have the same
characteristics in all projects (like productivity, cost and
material requirements),
• Typical (repeating) processes are modeled in the same
way in all projects,
• Project archives are kept and stored as required.
Organizing data
• These requirements are set on the Program level and
are mandatory for all program participants.
• Templates, reference-books, coding systems etc. are
developed in the Program Management Office.
Program Databases (Reference-Books)
• Activities, resources and resource assignments belong
to the same type if they share the same characteristics
like unit costs, material consumptions per work volume
unit, productivity, etc.
• Program Management office creates Databases or
Reference-books that contain those parameters that
shall be used for planning of all projects of the
Program.
Program Databases (Reference-Books)
• Program Reference-books include at least:
– Activity cost and material requirements per volume unit
for all activity types,
– Resource assignment cost and material requirements
per volume unit for all assignment types,
– Resource assignment productivities for all assignment
types,
– Resource assignment work loads for all assignment
types.
Typical Fragment Library
• Project fragments usually describe typical processes
and technologies that are used more than once as small
projects.
• Creating project computer models using the library of
typical fragments helps to avoid inconsistencies and
assures that the project model follows Program
standards.
• A library of typical fragments is very important tool for
the development of common culture and management
standards.
Program Templates
• Program management has to be based on the program
standards. These standards include not only estimates
of the typical activity and assignment parameters
process and but also project templates.
• Besides Program Management Guideline developed in
the Program Management Office describes Program
management routine (when and what reports shall be
presented, performance review meetings schedule, etc.)
and change management processes.
Organizing data
• This slide shows WBS
template for construction
projects required by
Program Management
Office of Olimpstroy.
Project Data Structure
• The main elements of any project computer model
include:
– project activities,
– activity dependencies,
– resources and their assignments,
– calendars,
– Costs,
– Project, Work, Resource and Cost Breakdown
Structures.
Project Data Structure
• Now we will discuss special requirements to
project data that are necessary for most
infrastructure projects.
• Some of these requirements are used in the
process of project schedules assessment.
Activity Data
• Usually project activities are characterized by their
duration or effort. But in most cases and especially in
construction projects it is necessary to set activity’s
physical volume (or quantity) of work.
• Activity volume can be measured in meters, tons, etc.,
planned work hours, percents or any other units.
• Unlike activity duration, activity volume does not
depend on assigned resources.
• Project performance reports always include actual
volumes that were done on project activities.
Activity Data
• By introducing activity volumes, we will be able to use
Program/corporate databases that define:
– cost and material requirements per activity volume
unit for different activity types.
– Resource assignment productivity or production rate
for different assignment types.
• Activity duration is calculated basing on activity volume
and assigned resource productivities. PMBOK Guide call
this method as Parametric Estimating of Activity
Duration.
Dependency Data
• Many infrastructure projects include linear
construction (roads, railroads, pipelines, etc.). In such
projects many types of work can be done in parallel
but on some distance between them. Such logical
dependency may be described as Start to Start link
with Volume Lag.
• But Start to Start link shall be supported by Finish to
Finish link to prevent preceding activity “catching”
succeeding activity. So it is necessary to set more
than one link between activities and to check if Start
to Start links are supported by Finish to Finish links.
Resource Data
• Resources are divided into two classes:
– renewable (human resources and mechanisms) and
– consumable (materials).
• It makes possible to assign materials to resources
defining their consumption per resource work hour or
work volume unit.
• Example: a car consumes gas.
Resource Data
• Besides the individual resources there is a need to set
resource crews (we call them multi-resources) and
resource skills (roles).
• Multi-resources are the settled groups of resources
working together.
• Multi-resources can be assigned on activity execution.
• Assigning multi-resource project planner assigns all
resources that belong to this multi-resource.
Resource Data
• If resources can do the same work then they belong
to the same Skill set or Resource Assignment Pools.
• Resources with the same skills are interchangeable
though they may have different productivities
performing the same activities.
• One resource can belong to many Skill sets.
• Example: excavators of different types that may be
used on earth moving works.
Assignment Data
• Resource
Assignments
have
their
own
characteristics including:
– Resource productivity on assignment,
– Assignment cost (may be fixed, per unit of work
volume, or per hour),
– Assignment material consumption (fixed, per
unit of volume, or per hour),
– Resource workload (% or resource work time
that is required on concrete assignment)
Assignment Data
• Assigning resources to activities implies the notion
of a team - a group of resources working on an
activity together. The team can include individual
resources, multi-resources and skills.
• If resources belong to different teams then they
can work independently of each other at different
time. This is the way to simulate working in
different shifts on the same activities.
Assignment Data
• Resources can consume materials in the process of
their work. Besides, materials can be assigned to
activities or resource assignments directly. In some
projects it is necessary to simulate not only material
consumption but also production or supply of
resources and materials on activities and
assignments.
Calendars
• Separate calendars can be set for all activities,
resources and time lags.
• Availability of all these calendars is important for
the proper project performance simulation.
Cost Data
• Usually it is not enough just to define activity and
resource costs. It is necessary to know project
expenses and revenues, what will be spent on wages,
on machinery and equipment, on taxes, etc.
Sometimes it is necessary to allow for multiple
currencies. So there is a need to define and assign cost
components.
• Cost Structure shall be the same in all projects
belonging to the Program and is defined on the
Program level.
Material, Resource and Cost Centers
• There is a need to get different reports on the groups
of cost components, materials and resources. That is
why it is necessary to define Cost, Material and
Resource Centers:
• Material center can include any group of materials.
• Resource center can include any group of resources.
• Cost center includes selected cost components.
• Using material, resource, cost centers permits to get
group reports (all pipes, all workforce) and to manage
parallel budgets (actual expenses, contract costs, etc.).
Multiple WBS
• It is also very useful to have an opportunity to get
project reports that aggregate project data different
ways. Usually we use at least three Work Breakdown
Structures in our projects: based on project
deliverables, project processes and responsibilities.
• At least one WBS is mandatory and required by
Program Management Office. Others may be selected
by project management teams.
Contract Breakdown Structure
• Contract Breakdown Structure is the powerful tool for
management of contract relationships. The same
organizations are involved in multiple projects and in
different programs.
• Contract Breakdown Structures are used to get reports
on the contract performance and contract cash flows.
Cost Breakdown Structure
• Cost Breakdown Structure for contract costs is defined
by Program Management Office.
• Contractors can add cost components and create Cost
centers for planning and tracking real expenses.
• We manage not only expenses but also financing.
• Program managers control program, project and
contract cash flows.
Project Archives
• The planners should be able to store project
versions and to analyze the progress in project
execution, comparing current project and
portfolio schedules not only with the baseline
but also with any previous version. It enables to
assess the progress in project execution for the
last week, last month, last year, compared to the
baseline, etc.
Typical Fragment Library
• Project fragments usually describe typical processes
and technologies that are used more than once as small
projects.
• Creating project computer models using the library of
typical fragments helps to avoid inconsistencies and
assures that the project model follows corporate
standards.
• A library of typical fragments is very important tool for
the development of common culture and management
standards.
Part 4
Program/Project
Scheduling
Scheduling Tasks
• Program/Project scheduling without the resource
limitations taken into the consideration,
• Program/Project resource constrained scheduling
(resource leveling),
• Determination of feasible time floats for
Program/Project activities and those activities that
are critical,
• Determination of the Program/Project cost, material
and resource requirements for any time period,
Scheduling Tasks
• Determination of renewable resources utilization in
time,
• Risk analysis and development of the Program/Project
schedule and other parameters allowing for the risks,
• Program/Project performance measuring,
• Program/Project performance analysis and forecasting
main project parameters.
Tasks to solve
• The problem of project schedule development
without allowing for resource constraints has a
correct mathematical solution (Critical Path
Method), which would be the same for all PM
packages, provided that initial data are identical.
All other problems are solved using different
approaches and yielding different results.
Resource constrained scheduling
• Resource constrained schedules produced by
different PM software are different. The software
that calculates shorter resource constrained
schedules may save a fortune to its users.
• That is why we pay most attention to resourceconstrained schedule optimization.
Resource constrained scheduling
• The schedule stability is no less important,
especially at the project execution phase.
• That is why our project management software
Spider Project features an additional option - the
support of the earlier project version schedule
(keeping the order of activity execution the same
as in selected earlier project schedule).
Sample Project before leveling
• Traditional notion of Critical Path works only
in case of unlimited resources availability.
• Let us consider a simple project consisting of
five activities, presented at the next slide.
• Activities 2 and 5 are performed by the same
resource.
Sample Project after leveling
• Please pay attention to activities that became
critical. Now delaying each of the activities 1, 2
and 5 will delay the project finish date. We call
these activities Resource Critical and their
sequence comprises Resource Critical Path.
Resource Critical Path
• In many projects it is necessary to simulate
financing and production, and calculate project
schedules taking into account all limitations
(including availability of renewable resources,
material supply and financing schedules). True
critical path should account for all schedule
constraints including resource and financial
limitations.
Resource Critical Path
• We call it Resource Critical Path (RCP) to
distinguish it from the traditional interpretation
of the critical path definition.
• The calculation of RCP is similar to the
calculation of the traditional critical path with
the exception that both early and late dates
(and corresponding activity floats) are
calculated during forward and backward
resource (and material, and cost) leveling.
Resource Constrained Floats
• This technique permits to obtain resource
constrained floats.
• Activity resource constrained float shows the
period for which activity execution may be
postponed within the current schedule with
the set of resources available in this project.
RCP and Critical Chain
• It appears that by adding financial and supply
constraints to the Critical Chain definition as
well as the way of the Critical Chain calculation,
we will obtain something very similar to RCP.
Part 4
Success Criteria
Project Success Criteria
• If project success criteria are set as finishing
project in time and under budget then proper
decision making will be complicated.
• Project managers will not be able to estimate the
effect of their decisions to spend more money
but to finish the project earlier.
• If some project is business oriented then this
project has to have business criteria of its success
or failure.
Project Success Criteria
• One of potential options – to set the profit that
should be achieved at some point in time basing
on the forecast of the revenues that will be
obtained after the project will deliver its results.
• Such success criterion will permit to weight time
and money making managerial decisions.
Project Success Criteria
• At the next slide you may see the project
schedule that is calculated without allowing for
project financing and supply restrictions. There
are periods when project has no money to
proceed and necessary materials (wall frames)
are absent.
Project Success Criteria
• But if project
manager will find
enough money
and materials
then project total
profit to some
imposed date will
be close to
$219,000.
Project Success Criteria
• If to calculate
project resource,
financing and
supply
constrained
schedule than
total profit will
become more
than $25,000 less.
Project Success Criteria
• Maybe it is reasonable to borrow money or
to find some other solution?
• To be able to weight options and to choose
the best it is necessary to simulate not only
expenses. This approach is especially
important for portfolio management.
Part 5
Risk Analysis &
Success Driven
Project Management
Why risk analysis
• Our experience of project planning shows that
the probability of successful implementation of
deterministic project schedules and budgets is
very low. Therefore project and portfolio
planning technology should always include risk
simulation to produce reliable results.
Risk Simulation
• Risk simulation may be based on
Monte Carlo simulation or use
three scenarios approach that
will be described further.
Risk Simulation –
three scenarios approach
• A project planner obtains three estimates (optimistic,
most probable and pessimistic) for all initial project
data (duration, volumes, productivity, calendars, costs,
etc.).
• Risk events are selected and ranked using the usual
approach to risk qualitative analysis. Usually we
recommend to include risk events with the probability
exceeding 90% in the optimistic scenario, exceeding
50% in the most probable scenario, and all selected
risks in the pessimistic scenario.
Risk Simulation –
three scenarios approach
• The most probable and pessimistic project
scenarios may contain additional activities and
costs due to corresponding risk events and may
employ additional resources and different
calendars than the optimistic project scenario. As
the result project planner obtains three expected
finish dates, costs and material consumptions for
all major milestones.
Desired Parameters
• They are used to rebuild probability curves for the
dates, costs and material requirements.
• Defining desired probabilities of meeting project
targets a project planner obtains desired finish
dates, costs and material requirements for any
project deliverable.
Success Probabilities
• If the targets were approved then it is necessary to
calculate the probabilities of meeting required project
targets. If they are reasonable then they may be
accepted.
• Probabilities to meet approved project targets we call
Success Probabilities. These targets may include all
project parameters that will be controlled (profit,
expenses, duration, material consumption).
Baseline
• Target dates do not belong to any schedule.
Usually they are between most probable and
pessimistic dates. A set of target dates and costs
(analogue of milestone schedule) is the real
project baseline.
• But baseline schedule does not exist!
Buffers
• We recommend to use optimistic schedule for
setting tasks for project implementers and
manage project reserves.
• Project planner obtains not only the set of target
dates but also a critical schedule – a project
schedule calculated backward from target dates.
The difference between current and critical dates
shows current schedule contingency reserves
(buffers).
Sample Critical Schedule
• There are time, cost
and material buffers
that show
contingency reserves
not only for a project
as a whole (analogue
of Critical Chain
project buffer) but
also for any activity in
the optimistic project
schedule.
Success Probability Trends
• The best way to measure project performance is
to estimate what is going on with the project
success probabilities. If they raise it means that
contingency reserves are spent slower than
expected, if they drop it means that project
performance is not as good as it was planned
and corrective actions are needed.
Success Probability Trends
• Success probabilities may change due to:
– Performance results
– Scope changes
– Cost changes
– Risk changes
– Resource changes
Success Probability Trends
• Thus success probability trends reflect not
only project performance results but also
what is going on around the project.
• We consider success probability trends as
the really integrated project performance
measurement tool.
Success Probability Trends
• Success probability trends may be used as the
only information about project performance at
the top management level because this
information is sufficient for performance
estimation and decision making.
Success Driven Project Management
• We call the described methodology Success
Driven Project Management.
Success Driven Project Management
• If project performance is estimated by success
probability trends then project managers are
encouraged to resolve uncertainties ASAP. This
can increase success probabilities even with
activity finish delays & cost overruns.
• Postponing problem activities leads to negative
trends in success probabilities.
Success Driven Project Management
• This attribute of success probability trends is
especially useful in new product
development project management.
• On the corporate level it is very useful to
know trends and current probabilities of
meeting targets for all portfolio projects.
Part 6
Conclusions
Corporate PM Tools and Techniques
• Organizing data in a way that supports proper
resource work simulation and application of
corporate norms and standards.
• Creating a set of reference-books and the
fragnet libraries that are obligatory for creating
project computer models.
Corporate PM Tools and Techniques
• Calculating Resource Critical Path and resource
constrained floats for every project and project
portfolio.
• Risk assessment and simulation.
• Defining project success and failure criteria that
reflect achieving project business goals.
Corporate PM Tools and Techniques
• Defining project targets (and corresponding
contingency reserves) that may be achieved with
reasonable probabilities.
• Regularly recalculating the current probabilities
of meeting project targets during execution and
analyzing success probability trends. Negative
success probability trends require corrective
actions.
Success Driven Project Management Flowchart
REFERENCE-BOOKS:
Code Structures
Typical Fragnet
Library
Resources
Materials
Cost Components
Cost Breakdown
Structure
Resource Breakdown
Structure
Calendars
Project Schedule
WBS Templates
Project Budget
Project Portfolio
Risk Analysis
Risk Register
Success and
Failure Criteria
Issue Register
Resource Productivities
Unit Costs
Material Requirements
per Volume Unit
Skills
Multi-Resources
Performance
Reports
Success and
Failure
Probabilities
Success
Probability Trends
+
Corrective
Actions
Work
Authorization