I'm surprised some times by the differences in domains and contexts in domains and some general notions of project management.My suprise is how simple concepts in one domain fail to make into other domains.
One is Mosaic Project's White on Duration Estimating.
Apart from very small short term projects (3 to 6 months and under $200,000) attempting to directly integrate the cost estimating process with the scheduling process in fraught with difficulty. Even on these smaller projects, direct linking is not really feasible unless the primary source of all costs is staff directly employed on the work.
This type of planning and controls is simply not allowed in programs subject to Earned Value for governments, including the Australian government.
Without connecting cost and schedule as well a technical performance measures, probabilistic risk and cost and scheduled margins you cannot build a credible Performance Measurement Baseline( PMB).
The concept in the last sentence cannot be true as well. The PMB includes Labor and Non labor Cost Element Relationships (CER).
See the current GAO Cost Estimating and Assessment Guide for how to integrate cost and schedule.
Without the integration of cost and schedule, the program cannot be managed to success.
Here's why:
- Cost drives schedule
- Schedule drives cost
- Subcontractors on FFP (Firm Fixed Prices) still have cost and schedule spreads inside their FFP subcontract. They have cost and schedule coupling.
It's this coupling between cost and schedule, along with the compliance with Technical Performance Measures (TPMS), that is both the source of problems and the source of transparency in program controls.
Here's the Pictures
The Peformance Measurement Baseline (PMB) is composed of the following elements:
- IMP/IMS - Integrated Master Plan / Integrated Master Schedule
- Cost baseline
- Statement of Work (numbers tracing the deliverables to the work delivering the work)
- Technical Perfomance Measures
- Work Breakdown Structure (the products and process structure that produce the products)
The connections between Cost, Schedule, and Techncial Performance drive the needs for "margins."
So the Mosaic paper is a good starting point if yuo ignore the conjecture that connecting cost and schedule is fraught with difficulty. Yes it is difficult. It is also mandatory for success. In the absence of these connections, including the TPM's you don't have visibility into the risks that drive the project.
If you don't have visibility into these "drivers" you're likely late and over budget before you start and you probably don't knwo it. No wonder many projects are in trouble.
Yes it is hard, that's what we get paid for.
