Download - Pm Journal 0503

ProjectManagementJournal

PAPERS

Volume 36, Number 1

MARCH 2005The Professional Research Journal

of the Project Management Institute

5

15

27

37

51

2004 STUDENT PAPER AWARD WINNER

SURVIVING THE ROLLER COASTER: WORST PRACTICES INPROJECT MANAGEMENT WITHIN THE TELEVISIONPRODUCTION INDUSTRYGeorge Brook

PROJECT PLANNING UNDER UNCERTAINTYUSING SCENARIO ANALYSISBruce Pollack-Johnson and Matthew J. Liberatore

WHY A CRITICAL PATH BY ANY OTHERNAME WOULD SMELL LESS SWEET?TOWARDS A HOLISTIC APPROACH TO PERT/CPMDan Trietsch

IDENTIFYING THE CONTEXTUAL ELEMENTS OF PROJECTMANAGEMENT WITHIN ORGANIZATIONS AND THEIRIMPACT ON PROJECT SUCCESSMark Ives

THE PROJECT SCHEDULING GAME (PSG):SIMULATING TIME/COST TRADE-OFFS IN PROJECTSMario Vanhoucke, Ann Vereecke and Paul Gemmel

WHEN EXCELLENCE IS REWARDED WE ALL WIN.

THE 2005 PMI PROFESSIONAL AWARDS

They’re closer than you think. Submit your nominations now. Recognize significant contributions to the profession and practice of project management, and to PMI. Excellence deserves our thanks. And

nothing says “thank you” like the prestige of a PMI Professional Award.

SUBMIT YOUR ENTRIES NOW FOR:

PMI Project of the Year AwardPMI Fellow Award

PMI Linn Stuckenbruck Person of the Year AwardPMI Distinguished Contribution Award

PMI David I. Cleland Project Management Literature AwardPMI Eric Jenett Project Management Excellence Award

PMI Research Achievement Award PMI Community Advancement Through Project Management Award

PMI Professional Development Product of the Year AwardPMI Professional Development Provider of the Year Award

Go to www.pmi.org for submittal guidelines, nomination procedures and deadlines for entry.

WHEN EXCELLENCE IS REWARDED WE ALL WIN.

THE 2005 PMI PROFESSIONAL AWARDS

They’re closer than you think. Submit your nominations now. Recognize significant contributions to the profession and practice of project management, and to PMI. Excellence deserves our thanks. And

nothing says “thank you” like the prestige of a PMI Professional Award.

SUBMIT YOUR ENTRIES NOW FOR:

PMI Project of the Year AwardPMI Fellow Award

PMI Linn Stuckenbruck Person of the Year AwardPMI Distinguished Contribution Award

PMI David I. Cleland Project Management Literature AwardPMI Eric Jenett Project Management Excellence Award

PMI Research Achievement Award PMI Community Advancement Through Project Management Award

PMI Professional Development Product of the Year AwardPMI Professional Development Provider of the Year Award

Go to www.pmi.org for submittal guidelines, nomination procedures and deadlines for entry.

ProjectManagementJournalThe Professional Research Journal of the Project Management Institute

Volume 36, Number 1

MARCH 20053 From the Editor

Christophe N. Bredillet, PhD, MBA, Ingénieur EC Lille

PAPERS

5 2004 STUDENT PAPER AWARD WINNER

SURVIVING THE ROLLER COASTER: WORST PRACTICES IN PROJECTMANAGEMENT WITHIN THE TELEVISION PRODUCTION INDUSTRYGeorge Brook

15 PROJECT PLANNING UNDER UNCERTAINTYUSING SCENARIO ANALYSISBruce Pollack-Johnson and Matthew J. Liberatore

27 WHY A CRITICAL PATH BY ANY OTHERNAME WOULD SMELL LESS SWEET?Dan Trietsch

37 IDENTIFYING THE CONTEXTUAL ELEMENTS OF PROJECT MANAGEMENT WITHINORGANIZATIONS AND THEIR IMPACT ON PROJECT SUCCESSMark Ives

51 THE PROJECT SCHEDULING GAME (PSG):SIMULATING TIME/COST TRADE-OFFS IN PROJECTSMario Vanhoucke, Ann Vereecke and Paul Gemmel

60 Cover to Cover—Book Reviews

Kenneth H. Rose, PMP

64 Guidelines for Project Management Journal Book Reviews

66 Calendar of Events

67 Notes for Authors

EditorChristophe N. Bredillet, PhD, MBA,

Ingénieur EC Lille

PMI PUBLISHING STAFF

PublisherGary Boyler; [email protected]

Product EditorRichard Schwartz; [email protected]

Contributing EditorDan Goldfischer; [email protected]

Project Management Journal AssociateNatasha Pollard; [email protected]

Publications PlannerBarbara Walsh; [email protected]

Bookstore AdministratorRegina Madonna; [email protected]

General e-mail:[email protected]

Journal in print:[email protected]

Book Review EditorKenneth H. Rose, PMP

PROJECT MANAGEMENT JOURNAL

EDITORIAL REVIEW BOARDRick Bilbro, The Innova Group, Inc.; PierreBonnal, CERN Accelerator and Beams Dept.; DavidBonyuet, PMP, Delta Search Labs; DavidChristensen, Cedar City, UT; Dan H. Cooprider,Creative People Management; Steven V. DelGrosso,IBM; Gary C. Humphreys, Humphreys & Associates;Peter Kapsales, Belcore; Young Hoon Kwak,The George Washington University; AlexanderLaufer, Technion-Israel Inst. of Technology; WilliamLeban, PMP, DeVry University; Rolf A. Lundin,Jonkoping University; Fred Manzer, PMP, Center forSystems Management; Michael Okrent, AgilentTechnologies Inc.; Paul B. Robinson, The EasternManagement Group; Richard L. Sinatra, PMP,Potomac, MD; James Snyder, Springfield, PA;Anders Soderholm, Umea University;PaulSolomon, PMP, B-2 Earned Value ManagementSystems; Charles J. Teplitz, University of San Diego;Zeljko M. Torbica, PMP, Florida InternationalUniversity. Terry Williams, Unversity of Strathclyde;Graham M. Winch, The University of Manchester.

EDITORIAL ADVISORY BOARDFrank T. Anbari, PMP, The George Washington Uni-versity; Karlos Artto, Helsinki University of Technology(HUT), Finland; David Cleland, University of Pittsburgh;Lynn Crawford, University of Technology, Sydney;Brian Hobbs, Université du Québec à Montréal;Toshihiko Kinoshita, Waseda University; AsbjørnRolstadås, Norwegian University of Science andTechnology; Dennis P. Slevin, University of Pittsburgh.

PUBLICATION & MEMBERSHIPThe Project Management Journal (ISSN 8756-9728/03)is published quarterly (March, June, September, December)by the Project Management Institute. The Journal is printedin the USA by Cadmus Magazine, Richmond, VA.Periodical postage paid at Newtown Square, PA 19073USA and at additional mailing offices. Canadianagreement #40030957. Postmaster: Send addresschanges to Project Management Institute, Headquarters,Four Campus Boulevard, Newtown Square, PA 19073-3299 USA; tel: +1-610-356-4600, fax: +1-610-356-4647.

The mission of the Journal is to provide informationadvancing the state of the art of the knowledge of projectmanagement. The Journal is devoted to both theory andpractice in the field of project management. Authors areencouraged to submit original manuscripts that arederived from research-oriented studies as well aspractitioner case studies. All articles in the Journal are theviews of the authors and are not necessarily those of PMI.Subscription rate for members is $14 U.S. per year andis included in the annual dues.

Claims for undelivered copies must be made no laterthan two months following month of publication. Thepublisher will supply missing copies when losses have been

sustained in transit and when the reserve stock will permit.PMI is a nonprofit professional organization whose

mission is to serve the professional interests of its collectivemembership by: advancing the state of the art in theleadership and practice of managing projects andprograms; fostering professionalism in the managementof projects; and advocating acceptance of projectmanagement as a profession and discipline.Membership in PMI is open to all at an annual dues of$119 U.S. For information on PMI programs andmembership, or to report change of address orproblems with your subscription, contact:

Project Management Institute, Headquarters,Four Campus Boulevard, Newtown Square, PA 19073-3299 USA; tel: +1-610-356-4600; fax: +1-610-356-4647; e-mail: [email protected] Regional Service Centre: Europe - MiddleEast - Africa (EMEA), Avenue des Gaulois 7, B-1040Brussels, Belgium; tel: +32-2-743-15-73; fax: +32-2-743-15-50; e-mail: [email protected]

© 2004 Project Management Institute, Inc. All rights reserved.“PMI” is a trade and service mark registered in the United States and other nations; “PMP” and the PMP logo are registered certification marks in the United States and other nations;

“PMBOK” is a trademark registered in the United States and other nations; and the PMI logo, “PM Network”, “Project Management Journal”, “PMI Today”, and “Building professionalism in project management.” are trademarks of the Project Management Institute, Inc.

EDITORIAL & ADVERTISING SERVICESAddress manuscripts and other editorial submissions,advertising and mailing list rental inquiries, and requestsfor reprints/bulk copies/reprint permission to: ProjectManagement Institute, Publishing Department,Four Campus Boulevard, Newtown Square, PA 19073-3299 USA. tel: +1-610-356-4600, fax: +1-610-356-4647; e-mail: [email protected]

Unless otherwise specified, all letters and articlessent to the PMI Publishing Department are assumed forpublication and become the copyright property of PMI ifpublished. PMI is not responsible for loss, damage, orinjury to unsolicited manuscripts or other material.

READER SERVICESPhotocopies. Project Management Journal has beenregistered with the Copyright Clearance Center, Inc.Consent is given for copying of articles for personal orinternal use, or for the personal use of specific clients. Thisconsent is given on the condition that the copier paysthrough the Center the per copy fee stated in the codeon the first page of each article for copying beyond thatpermitted by Sections 107 or 108 of the U.S. CopyrightLaw. The appropriate fee should be forwarded with acopy of the first page of the article to the CopyrightClearance Center, Inc., 222 Rosewood Drive, Danvers,MA 01923 USA (tel: +1-508-750-8400; fax: +1-508-750-4744). The fee indicated on the first page of anarticle in this issue will apply retroactively to all articlespublished in the journal, regardless of the year ofpublication. This consent does not extend to other kindsof copying, such as for general distribution, resale,advertising and promotion purposes, or for creating newcollective works. Special written permission must beobtained from the publisher for such copying.

Permissions. Requests to reprint articles publishedin Project Management Journal must be made in writingto the publisher.

Reprints. Individual articles may be purchasedthrough the Knowledge & Wisdom Center(www.pmi.org/k&wc)

Glossy Reprints. Requests for glossy reprints ofindividual articles in quantities of 100 or more can besent to [email protected].

Bulk Copies of Current Issues. Copies of thecurrent Project Management Journal can be obtained inquantities of 25 or more. Orders must be placed 40days prior to date of issue. The cost is $5.50 per copyplus shipping.

Back Issues. Back issues are available on requestat $20 each. Call +1-610-356-4600 for availability.

March 2005 Project Management Journal • 3

FROM THE EDITORChristophe N. Bredillet, PhD, MBA, Ingénieur EC Lille

The Good, the Bad, and the Ugly

Dear Colleagues and Friends,After four issues as Project Management Journal

Editor, I would like to provide some lessons learnedwith regards to the kind of papers expected for pub-lication. As I mentioned in my first editorial (Vol.35, No. 2, June 2004), we (PMI and the EditorialTeam) endeavor to make the Journal a “tier one”publication within the next 3 years.

Thus, a new editorial policy was defined, inalignment with the overall objective. A new EditorialTeam was formed, based on the previous reviewteam, but with a more international make-up. Ofcourse, as with any living entity, the Editorial Teamwill change over time, as some reviewers depart andothers are added.

Project Management Journal’s Editorial Teamreceived about 200 papers the past year; of this total,25% (50) of them have been retained to move to thefull review process. In comparison, there are fourJournal issues per year, each of which typicallyincludes five papers. This means that only the 20 bestpapers (10% of the total received) meet the Journal’squality criteria, and are selected for publication.

All papers submitted for consideration by theJournal are first evaluated by the Editor, who decidesif the papers warrant a full review process with theEditorial Review Team.

The Ugly

The reasons why papers are not accepted for the fullreview process can be categorized as follows:

• Basic material: Such papers contain no newinformation, and address only what is universalknowledge. Examples are papers dealing withthe implementation of a variation of earnedvalue management, or consideration of networkoptimization using classical operation researchtechniques;

• Consultants’ papers: Such papers often have acopyright and may even read like advertise-ments! This kind of paper tends to promote aspecial approach developed by a consultingorganization, with no or very few references,and lacks even the beginning of a scientificproof of what is proposed;

• Tools & Techniques: The author describes the

use of a particular tool and/or technique in agiven project. Examples are papers dealing withthe use of Analytical Hierarchical Process (AHP)to select contractors, the use of scheduling soft-ware, and a full description of how earned valuemanagement works;

• Best Practices: A description of what is supposedto work for every project, very often based on“tens of years” of experience, without any empir-ical research supporting the affirmation.Examples are papers dealing with the ten bestways of implementing an IS/IT project, five rulesto manage your risk, and so on;

• Single case studies: Here, the author describes aspecific story, with no possible generalization ortheoretical ground to structure the case study.Typically, examples of this kind can be found inpapers describing the participation of theirauthors in a large project (very often in con-struction or engineering);

• Congress & Conference material: The authorproposes a good topic, but not a research paper,per se. Such works contain very few references(or too many self–references), lack a well arguedresearch protocol, and have a poor or unex-plained research base;

• The paper was already submitted and publishedin another journal or conference proceedings —sometimes without even a single word changed!

Obviously, these reasons are non-exclusive, so apaper falling into the “Congress & Conference mate-rial” category could, for example, also be classifiedin the “Best Practices” category.

The Bad

After moving to the full review process, a paper canstill be rejected. The main reasons are:

• Lack of original contribution to theory, empiri-cal knowledge, and management practice;

• Objectives and central themes are unclear or toobroad;

• Too few scientific references for a researchpaper; too many references coming from non-scientific publications;

• Ignorance of the core literature of thefield/theme developed, or considering onlyauthors who are not researchers;

4 • Project Management Journal March 2005

• No scientific evidence, problem with internal and exter-nal validity of the proposed model, lack of theory,insufficient data or empirical evidence;

• Lack of scientific rigor and/or neutrality, opinions notdeveloped and scientifically justified.

Once a paper has been selected for the full reviewprocess, the author receives the assessment results andpropositions for improvement, even if the paper is rejectedfor publication in the Journal.

The Good

Once the first assessment stage is completed and the feed-back provided, the author has to resubmit the paper withappropriate modifications and improvements. The paper issent again to the same reviewers and, depending if they aresatisfied with the improvements and/ or changes made, thepaper is accepted for publication or rejected.

Having explained the main cause of rejections alongwith an overview of the main review’s stages, I wish to re-emphasize the kind of papers the Journal is looking for andclarify what are the guidelines followed by ProjectManagement Journal reviewers:

The Project Management Journal’s primary requirement forpublication is that the paper makes a substantive contributionto research and theory in project, program, and portfoliomanagement. Due to the integrative and interdisciplinarynature of these fields, the Journal publishes the best papersfrom a number of disciplines including, but not limited to,organizational behavior and theory, strategic management,sociology, economics, political science, history, informationscience, systems theory, communication theory, and psychol-ogy. Project Management Journal looks for work that transcendsthe bounds of particular disciplines to address a broad audi-ence. The Journal publishes qualitative papers, as well as quan-titative works and purely conceptual or theoretical papers,including diverse research methods and approaches. In short,the Journal attempts to integrate the various strands of project,program, and portfolio management research.

The Journal’s reputation and contribution to the fielddepend upon our publishing the best work available.Thus, we must attract the best research. The Journal com-petes for the best available manuscripts by having thelargest and widest readership among all project manage-ment journals. Equally important, we also compete byoffering high quality feedback. The timeliness and qual-ity of our review process reflect well on all who partici-pate in it.

• Developmental reviews: It is important that authorslearn from the reviews and feel that they have benefit-ed from the Journal review process. Therefore, review-ers will strive to give thorough details in all reviewsgiven for papers that are chosen for consideration.

• Respectful reviews: We recognize that authors haveput a lot of time and effort into every submission.Reviewers will always treat an author’s work withrespect, even if the reviewer has disagreement or

finds fault with what has been written.• Double-blind reviews: The policy of “double-blind”

review means that the reviewer and the author do notknow the identity of each other.

Reviewers may look for the following in a manuscript:

1) Theory: Does the paper have a well-articulated theorythat provides conceptual insight and guides hypothe-ses formulation? Equally important, does the studyinform or improve our understanding of that theory?Are the concepts clearly defined?

2) Literature: Does the paper cite appropriate literatureand provide proper credit to existing work on thetopic? Has the author offered critical references? Doesthe paper contain an appropriate number of refer-ences (i.e., neither too many nor too few)?

3) Method: Do the sample, measures, methods, observa-tions, procedures, and statistical analyses ensure inter-nal and external validity? Are the statistical proceduresused correctly and appropriately? Are the statistics’major assumptions reasonable (i.e., no major viola-tions)?

4) Integration: Does the empirical study provide a goodtest of the theory and hypotheses? Is the method cho-sen (qualitative or quantitative) appropriate for theresearch question and theory?

5) Contribution: Does the paper make a new and mean-ingful contribution to the management literature interms of all three: theory, empirical knowledge, andmanagement practice?

6) Citation in a review: Finally, has the author givenproper reference citation to the original source of allinformation given in their work or in others’ workthat was cited?

To conclude, authors are expected to describe the epis-temological position underlying their research approach(es)and the theoretical concepts that give meaning to data, andto demonstrate how they are relevant to organizations.Papers that speculate beyond current thinking are moredesirable than papers that use tried-and-true methods tostudy routine problems, or papers motivated strictly by datacollection and analysis. We attach no priorities to subjectsfor study, nor do we attach greater significance to onemethodological style than to another.

For these reasons, we view all our papers as high-quali-ty contributions to the literature and present them as equalsto our readers.

Happy writing!

Christophe N. Bredillet

The editorial policy, authors’ guidelines, and review process with reviewcriteria can be found on the PMI Web site at http://www.pmi.org/prod/groups/public/documents/info/pir_pmjournalguidelines.asp.

http://www.pmi.org/prod/groups/public/documents/info/pir_pmjournalguidelines.asp


2004 STUDENT PAPER AWARD WINNER

SURVIVING THE ROLLER COASTER:WORST PRACTICES IN PROJECT MANAGEMENT

WITHIN THE TELEVISION PRODUCTION INDUSTRY

GEORGE BROOK, Ecole de Gestion, School of Management, University of Ottawa

ABSTRACT

Despite the difficulties inherent in the

television production industry, it contin-

ues to thrive and flourish. Given the huge

amount of experience, expertise, and

resources available, it is possible to man-

age projects in television production

with excellence and integrity. However,

even though the television production

industry offers many advantages in the

practice of project management, includ-

ing highly developed methodologies and

straightforward (technical) quality man-

agement, productions fail or encounter

significant setbacks with great regularity.

This points to the inherent complexity

and difficulty of the production process.

This paper identifies commonalities in

the project management experience

within television production, in an effort

to develop a list of universal "worst prac-

tices." It is hoped that by identifying a

suite of worst practices, this paper will

be helpful in guiding future production

endeavors.

Keywords: budgeting; human resource

issues; insurance; intergration manage-

ment; risk management; production.

©2005 by the Project Management Institute

Vol. 36, No. 1, 5-14, ISSN 8756-9728/03

Executive Summary

Despite the fact that the television production industry offers many advan-tages in the practice of project management, including highly developedmethodologies and straightforward (technical) quality management, pro-

ductions fail or encounter significant setbacks with great regularity. This points tothe inherent complexity and difficulty of the production process. This paper iden-tifies commonalties in the project management experience within television pro-duction, in an effort to develop a list of universal “worst practices.”

It was relatively easy to pinpoint these commonalities, as there was signifi-cant agreement in the literature and in the professional experience of industryinsiders. Worst practices that emerged included:

• Do not secure interim financing • Ignore budgetary constraints in establishing scope • Do not work out clear lines of authority • Do not hire the right people for the job • Ignore red flags in the script • Do not allow for contingencies, do not establish contingency reserves • Do not maintain the reputation of key personnel • Do not lock down the script • Do not manage the human side of production • Do not secure all necessary rights before production. Despite the difficulties inherent in the television production industry, it con-

tinues to thrive and flourish. Given the huge amount of experience, expertise, andresources available, it is possible to manage projects in television production withexcellence and integrity. It is hoped that by identifying a suite of worst practices,this paper will be helpful in guiding future production endeavors.

Introduction

One day three and a half years ago, I, along with two partners, received word thatthe concept for a television show that we had created and shopped had beenpicked up. We had a television production! Little did I know at that time themaelstrom to which I was committing myself.

Three and a half years later, I find myself with a lot more gray hairs, and apassion to understand the chaos that is this industry in which I am immersed. Inmany ways the television production industry lives up to its glamorous reputa-


tion. What other industry can virtually guarantee creative,engrossing and demanding work that varies daily, combin-ing camaraderie and teamwork with the chance for individ-ual excellence and artistic expression? When the shoot isgoing well there are moments where I have truly marveledat the fact that I am getting paid to do this. However, thesemoments have been balanced by the many times in theheat of the battle when I have made a note to myself thatthis industry is just not worth it - at any price. The televisionproduction industry is also incredibly demanding, notori-ously uncertain, and just plain exhausting. Crises are to beexpected as a matter of course. Ten-hour days are the start-ing point.

Given the incredibly demanding nature of televisionproduction, excellent project management becomes essen-tial. From a project management perspective, the televisionproduction industry would seem to offer many opportuni-ties. There are highly developed production methodologiesand best practices already in place. Quality management, atleast from a technical point of view, is rather straightfor-ward. For a given level of resources and talent, the technicalquality of the finished product can be estimated with a highdegree of accuracy. The nature of communication andinformation flow necessary for effective production man-agement is well understood, and there is significant docu-mentation of best practices. To top it off, there is a largepool of highly experienced and specialized freelance talentupon which to draw.

Despite these advantages, it is undeniable that a signifi-cant proportion of television productions fail outright, or failto ever become financially viable. An even higher proportionencounter significant and unexpected setbacks and obstacles.Project integration management, time management, costmanagement, and risk management form the heart of theproject management challenge in television production, anddefy easy solutions. The logistical challenges to overcome,not to mention the technical and artistic skills needed to pro-duce a quality television program are truly staggering. I canstate from personal experience that small errors and omis-sions can have huge consequences for a production, and theprobability of these errors occurring is large.

I have spent a great deal of my career first in televisionpost-production, and now in television production environ-ments. I have noticed in both that similar stories of disastersand project management nightmares keep cropping upagain and again. This paper sets out to identify these com-monalties in the practice of project management in the tel-evision production industry. Through a review of recenttelevision production literature and through personal inter-views, it has been possible to identify damaging mistakesthat re-occur with enough regularity to be classified as worstpractices.

In order to establish a frame of reference from which tobegin, this paper will first provide a brief description of thetelevision industry from a project management perspective,worst practices will then be outlined, and their impact onthe production process examined.

Television Production – A Brief Overview of the Industry

A Guide to the Project Management Body of Knowledge(PMBOK®Guide) identifies a project as a “temporary endeavor under-taken to create a unique product or service” (PMI, 2000, p. 4).A television production is a temporary endeavor that has thegoal of realizing a particular television program or series, andtherefore fits perfectly within the definition of a project. Itbegins the moment a creative idea is moved officially intodevelopment, and ends when a finished program has beendelivered for distribution. A television production is typicallyincorporated as its own company, and is staffed almost entire-ly by specialized freelance talent assembled on a production-by-production basis.

The environment within which television productiontakes place is volatile, dynamic, and extremely challenging.However, the process of television production has remainedremarkably stable. A highly refined methodology hasevolved, with widespread adoption. A television producerwould be able to walk onto a set or a production officealmost anywhere in the world, and recognize the processesat work.

This television methodology involves the followingparameters:

Phases of Production

1. Development The original creative concept is developed to the pointwhere it can be “pitched”. When a viable concept attractsfinancing and distribution, it moves into phase two of pro-duction. By the end of the development phase the scope ofa production will be largely determined. At the end of thedevelopment phase financing will be secured, office spacewill have been found (if necessary), relevant union andguild contracts will have been negotiated, legal paperworkwill be in place, insurance will be in place, and a directorand principle talent will be on board.

2. Pre-Production With the concept developed, and financing secured, the pro-duction team is assembled. Pre-production involves takingcare of the logistics involved in readying the production for thestart of shooting. This involves assembling a production team,hiring technical talent, casting the parts, scouting and securinglocations, arranging for support infrastructure and materials,initiating set building, construction and wardrobe creation,setting up financial structures and controls, and so forth.

3. ProductionThe production phase starts on the first day of principlephotography, and ends on the last day. Each day of produc-tion involves the shooting of a number of scenes from thescript. It involves everything necessary to keep going day-to-day during shooting.

4. Post-Production This final phase of production begins when the raw materi-al generated in the production process begins to be edited


into its final form. The raw material travels through prepa-ration (film development / digitization), to picture editing,to sound editing and design, to final screenings, to printingand then final delivery. Postproduction ends with the wrapup of the entire production.

Television production phases map against the projectphases identified in the PMBOK® Guide as follows (Exhibit1) (PMI, 2000, p.31):

In actual fact, a significant degree of closure occurs atthe end of the production phase within the television production process, as the project is handed over to a rela-tively small number of post-production specialists.

Scope

Television productions have the “luxury” of having theirscope and cost largely determined in the initial phase of theproject. The two largest determinants of scope are therequirements of the script, and the amount of financingsecured. Other factors that influence the scope include:

• Budget • Duration of principle photography • Nature of the work week (5 day or 6 day workweeks,

many productions work weekends and holidays totake advantage of traffic patterns and location avail-ability)

• Length of the work day (10 to 12 hours is typical)• Day shoots and / or night shoots • Complexity of shoot (number of extras, locations,

special effects, music clearances) • Stature of the “star” performers • Intended distribution (networks, specialty channels,

foreign distribution) • Complexity of financing (grants, co-productions) • Number of producers, diversity of producers (A pro-

duction may have producers from any number of dif-ferent companies and countries. Titles for producersinclude Executive Producer, Supervising Producer,Associate Producer, Creative Producer, Producer, Co-Producer, Line Producer, and so forth)

• The corporate structure of a production (each individ-ual production is typically set up as a unique incor-porated company)

• Size of the crew• Size of the production staff.

As there are few unknowns in the general process of tel-evision production, it is possible to project the resourcesnecessary for a production of a given scope with a fair degreeof accuracy.

Organizational Design

A rigid organizational design, with highly specified jobdescriptions, exists within the television production indus-try. The organizational chart of a typical, large budget televi-sion production appears as follows (Exhibit 2):

As previously mentioned, the positions on this organi-zation chart are filled almost entirely by specialized free-lance talent, brought together for a particular production.

Complex Relationships

As is typical of a complex project, actual working arrange-ments are many orders of magnitude more complex thanthe organization chart would suggest. There are creativechains of command, there are financial chains of command,and there are logistic chains of command. Frequently, teammembers will be serving two or more masters simultane-ously. This complexity becomes evident in Gold andMason’s description of the responsibilities of just one of adozen key project management positions:

The First Assistant Director’s personal balancing act isbetween the director, the star, and the production man-ager. He must keep the director happy by giving himwhat he wants, when he wants it. But if he gives thedirector too much, the Production Manager will climb

TV ProductionPhases ProjectPhases

Development

Initiation

Pre-Production

Planning

Production

Execution

Post-Production

Closure

Exhibit 1

Television Production Organizational Chart

Head Office

CastingDirector

ProductionManager

ProductionOffice

Technical Crew

On-Set Staff

Design, Buildingand DecoratingDepartments

Post-ProductionDepartment

Special EffectsDepartment

Executives(the money)

Producer(s)

Exhibit 2


all over him, because he is spending too much money.The first must also cater to the star. He must make surethe dressing room facilities are acceptable, that any spe-cial needs the star has are taken care of… . (2000, p. 60) And of course, the First Assistant Director’s direct supe-

rior is actually the Producer. Many of the potential pitfalls ofthis system of complex relationships are ameliorated by theshared understanding of job descriptions and boundariesarising from the established production methodology.

Furthermore, television production inevitably involvesdealing with television networks. As a project manager, it istypical to find yourself in a position where decisions are get-ting made at the network level that directly pertain to yourproduction. You typically have little influence over thesedecisions, and even less information about them. This canadd another layer of complexity and ambiguity to theauthority structure. As Gold and Mason point out:

Television is a much more complex arena than featurefilms when it comes to putting a project together,because you are at the mercy of so many entities overwhich you have no control. Not only don’t you haveany control, you will never even know who or whatsome of these entities are? (ibid, p.131) All this leads to the question: Where does the project

management responsibility lie?

Responsibility for Project Management Several positions within a production team encompass sig-nificant project management responsibility. The productionmanager realizes many of the routine project managementfunctions on a day-to-day basis. Significant scheduling andbudgeting responsibility lie in this position. Several otherkey positions incorporate significant practical project man-agement duties. The production co-coordinator is the pri-mary project co-coordinator. She is the communicationshub o f the production.

Virtually every bit of information comes across herdesk, and it is her job to channel it in the right direc-tion. The Production Coordinator runs the productionoffice; it is her domain. (ibid, p. 62)

However, an examination of the producer’s job descrip-tion makes clear where ultimate project managementresponsibility lies:

• Make basic decisions• Maintain an overview• Obtain financing• Be financially responsible for the film• Plan the production• Run the shoot• Set and uphold standards• Set priorities• Keep the shoot on schedule and on budget• Supervise post-production• Follow the production through to the end

(Garvey, 1985, p. 11).

A note about nomenclature: As the producer assumesoverall responsibility for the production, for the purposes ofthis paper, the term “producer” will be used synonymouslywith “project manager” from here on.

How Not To Produce TV’s “Worst Practices”

To begin a discussion of what goes wrong in project man-agement within the television production industry, it mustbe stated at the outset that the production process is, by itsvery nature, volatile and unpredictable. It is expected thatproduction problems and challenges will crop up on a dailybasis. It is accepted that any production process, no matterhow well managed, will be highly unpredictable. Yet withinthis chaotic milieu there are particular types of problemsand pitfalls that crop up over and over again. All seasonedproduction veterans have experienced these problems intheir own, personal ways. These horror stories get sharedover drinks at the end of a grueling day on the job. In col-lecting these horror stories, a truly compelling road map toensure project management disaster in the field of televisionproduction emerges.

In many respects, television production and film pro-duction are very similar processes, with high-end televisionproductions being virtually indistinguishable from mediumto high-end film productions. For this reason, some exam-ples from the film production industry will be borrowed toillustrate real world “worst practice” scenarios.

Criteria for Inclusion

Inclusion in this examination of worst practices was basedon the following three criteria:

• Frequency of occurrence• Damage caused• Recognition within the industry.

It was, in fact, fairly easy to construct a comprehensivelist. The many sources consulted, both in print and in per-son, were remarkably consistent in identifying the following“worst practices”:

Worst Practices by Phase

Development Phase

Do Not Secure Interim FinancingGorica states that “virtually no series today is made with-out deficit spending” (1999, p. 134). Financing in televi-sion is generally set up as a series of payments, based onthe achievement of certain milestones. Because there is nocollateral, financing is released as proof of progress is pro-vided. This payment-upon-delivery arrangement can leadto significant gaps in financing while production is ongo-ing. The following pared-down Microsoft Project chartoutlines the four phases of production for a 13- episodetelevision series, with typical financing milestones indi-cated (Exhibit 3):


In addition, certain sources of financing have notori-ously unreliable payment schedules, with payments beingdelayed months, or even years. Tax rebates are among themost notorious for delays. This creates even more potentialfor disaster if interim credit is not secured.

As of the writing of this paper, the author’s current tele-vision production has encountered tax rebate delays of over18 months, and is also currently wrestling with an industryfund that is three payments in arrears. For small productioncompanies these sorts of delays can strain project financingto the breaking point.

Ignore Budgetary Constraints in Establishing Scope The creative impulse that underlies the television produc-tion industry can lead to wild flights of fancy in concept.However, even in this age of digital wizardry scope is pro-portional to expense. To ignore this certainty is to doom aproduction to a compromised final quality. Even the beststory needs a certain level of technical execution.

Once upon a time, I had as a roommate a talented post-production sound engineer. Every night for a few weeks hewould complain about this low budget television drama hewas working on, a production that had been shot inNorthern Canada. The quality of the source material wasspotty, and the production did not have the budget for aproper post-production treatment. In fact, the productionhad run out of money before the end of production, andevery possible corner was being cut. Toward the end of post-production my roommate brought home a dub of the finalmix. I watched intently, expecting a dismal show. Much tomy surprise, it was not bad. My roommate had certainlydone an excellent job of masking the many sound problemshe had encountered. The story propelled me along, climax-ing in a showdown in a remote northern fishing lodge at thepeak of a snowstorm. But instead of snow, there were blind-ing white 2D blobs floating down the screen – possibly theworst special effect I had ever seen. Suspension of disbeliefwas replaced by me rolling around the floor laughinguncontrollably. (The artificial snow effect was really thatbad). After I stopped laughing, I asked my roommate whathad happened.

Well, the weather had not co-operated in the shoot. Theproducer simply did not have a budget that adequatelyaddressed the scope of the shoot. There are costs associated

with shooting in the Canadian north in winter, and thesecosts were not addressed in the budget. Everything takeslonger in freezing weather. And who would have thought itwould not snow the entire length of the shoot? The produc-tion phase took considerably longer than budgeted for, andby the end of production there was still no snow comingdown. After waiting several additional days (at greatexpense) the final climatic scenes simply had to be shot. Theshoot went ahead without snow, with the intention ofadding computer-generated snow in post-production. Butthe delays had exhausted all contingency funds, and some ofthe post-production budget as well. This ridiculous, cheapsnow effect was already more than the production budgetwould allow.

In the end, the show went to air with realistic, and veryexpensive computer generated snow. This extra and consid-erable expense most likely came directly out of the produc-er’s (production manager’s) pocket. Ah, the glamour oftelevision.

Do Not Work Out Clear Lines of Authority Despite a well-established organization chart there are stillnumerous possibilities for problems in the chain of com-mand. These sorts of problems typically start at the top. If aproducer is heavily committed elsewhere, or has lost therespect of the production team, then problems are likely toarise. Similarly, if there are multiple producers, which is notatypical for bigger budget productions, then the chain ofcommand may not function in an optimal manner. Theposition of producer is perhaps the most potentiallyambiguous in television production. The following are allvariations of the title “producer,” each with it is own jobdescriptions and responsibilities (Simens, 2003, p. 28):

1. Producer – “I’ll get the show made” 2. Executive producer – “I’ll get the money” 3. Co-producer – “I’ve got the money” 4. Associate producer – “I know where the money is” 5. Line producer – “I’ll allocate the money”

The amount of project management responsibilityranges from immense, with a line producer fulfilling thesame function as a production manager (a production willnot have both), to absolutely none, with an associate pro-ducer doing nothing more than introducing the producer tosources of financing. Having co-producers guarantees com-plications and problems in the project hierarchy, unlessthese issues are addressed up front.

Symptoms of a lack of clear authority include: 1. Decisions take a long time/are not made at all 2. Constant changes to scope and parameters 3. Lack of project progress

Do Not Hire the Right People for the JobThis is a theme that appears over and over again in discus-sions of what goes wrong during production. Television pro-duction is a highly specialized industry, with highly

13 Episode Season

8/17 10/12 12/7 2/1 3/28 5/23 9/12 11/7

September 1 January 1 May 1 September 1

Development

Pre-Production

Post-Production

Production

1

2 Development

3 Pre-Production

4 6 Scripts Approved

5 All Scripts Approved

6 Production

7 Halfway Mark of Production

8 Post Production

9 2 Rough Cuts Approved

10 7 Masters Approved

11 All Masters Delivered

3/25

5/6

6/25

7/26

9/15

NA

ID Task Name

Exhibit 3


specialized talent available. There are job descriptions with-in the production team that seem, on the surface, to be rel-atively straightforward. However, the “devil is in the details”,so to speak, and small facts overlooked in the initiation andpre-production phase can have monstrous consequencesonce production begins.

A producer who I am acquainted with had been suc-cessful with several small budget productions, and had con-tributed to the careers of several actors who had reached thetop echelons of the industry. She had used her careermomentum to land a Christmas special, starring a well-known comedian. This was her chance to propel her careerand business to the next level.

The show would open with the comedian lounging ona Florida beach, lamenting the fact that it “just didn’t seemlike Christmas.” A flash of glitter, and he and his entouragewould appear outside a gorgeous Canadian chalet, sur-rounded by snow and pine trees.

This producer hired a location scout to research possi-ble locations for the chalet scene. This scout took Polaroidof the most promising locations, and everyone in the pro-duction office agreed that one particular chalet stood out.Availability was checked, the location was rented, andarrangements were made for the talent, extras, makeup,camera crew, grips, lighting crew, craft services, director,assistant directors, gear, and so forth, to arrive at the loca-tion on the first day of the shoot.

On the appointed day the entire production turned upat the site. To the producer’s horror, the chalet stood in themiddle of a cement parking lot. This fact had not been obvi-ous in the photos. The site was completely unsuitable forthe shoot, and in the end the day was cancelled. This was adisaster for the shoot, and had negative ramifications farbeyond the actual financial expense of this mistake.

This producer should have hired a location manager,instead of a location scout. A location manager would haveknown what questions to ask, and what details to look for.A properly supervised location scout would have been givena specific set of criteria with which to guide her search, andwould have brought back more detailed information withwhich to make a decision. The result of not hiring the rightperson for this task caused irreparable harm to the produc-tion, and some significant harm to the producer’s career andbusiness. As previously stated; small facts overlooked in theinitiation and pre-production phase can have monstrousconsequences once production begins.

To complicate matters, production talent tends to spe-cialize in a certain genre. For example, working on anepisodic TV drama can involve some key skills that differfrom those involved in a lifestyles series. Not only must youensure that a potential team member has experience at hisor her job, but has experience in the particular genre of yourproduction.

Pre-Production Phase

Ignore “Red Flags” in the Script The following items in a script imply risk and should set off

alarm bells in a seasoned production team: 1. Children are required. 2. The schedule calls for outdoor shots in winter. 3. The shoot calls for capturing specific weather conditions. 4. Animals are required. 5. Stunts are required. 6. Special effects are required. 7. Travel is required.

Stunts and special effects are extremely complex under-takings. They require highly specialized talent, and theyalways run the risk of going over time and over budget. Infact, any of the factors listed above have the potential toincrease the complexity of a shoot to a significant degree.Some are simply unpredictable, or uncontrollable. All thesefactors will have an additional financial impact on a pro-duction, with the potential to dramatically increase insur-ance and bond completion costs.

My own production decided that we needed a pig for aparticular scene. We would open this odd door in the base-ment, and there would be the pig. (Trust me – it would havebeen really funny). The production did not have the budgetfor an animal wrangler (or specialist) to be on set, but man-aged to find a petting zoo that would drop off a very “friend-ly” pig for an afternoon.

Well, the pig was dropped off in the backyard of thehouse that was serving as our set, with instructions to just“wrap it in a blanket, and carry it down the stairs. It maysqueal a little, but not to worry.”

Now, what I learned that afternoon is that if a pig doesnot want to do something it will most definitely squeal. Notcute little pig squeals. But ear splitting “help - crazedlunatics are trying to rip me apart limb from limb” squeals.It will squeal at the top of its lungs for as long as you try toget it to do what it does not want to do. It will squeal if youlook at it wrong. After an afternoon of squealing, grunting,agitated neighbors, and a producer watching the day’sschedule fall apart, a solution was found. Baby goats aremuch easier to get down a flight of stairs.

Do Not Allow for RisksEven in the best-managed television productions there willbe a great deal of uncertainty and improvisation. If even onesignificant factor goes wrong, such as injury to key talent,uncooperative weather, equipment failure, and so forth, aproduction schedule can be sent into disarray. If any of thesix “red flags” listed above are in play, the need for generouscontingency allowances is guaranteed, both in schedulingand in budgeting.

No matter how substantial the initial budgets, riskshave the potential to derail productions. During the filmingof the Matrix, actress Carrie-Anne Moss woke up the morn-ing of a key special effects shoot in which she would bedoing her own wire stunts, to discover her back had seizedover the night. She was in so much pain that even gettingout of bed was problematic. But the schedule had so littleroom for deviation that a few hours later she was flying


upside down in harness, with film rolling. Of course, therewas room in the contingency budget for the chiropractor,physiotherapist/massage therapist, and back specialist tohelp with her ailment. Productions with contingency fundsthat did not allow for an army of specialists would havebeen in a great deal more trouble. Even at this extremeupper end of production budgets, project integrity hung ona thread, with human frailty at the center.

Unknown-unknowns are so prevalent in television pro-duction that production budgets will always have an explic-it contingency allowance built in as a separate line item.

Do Not Establish/Build/Maintain the Reputation of KeyPersonnel A television production is a highly elaborate and complexundertaking. “Doing it right” is a learned skill, and successdepends on the many members of the production teammeshing as a whole. If one member of the team is not qual-ified, they can, and will, make the other team members’ workseem sub-par. This is not readily tolerated by crew members.If a senior member of the team is perceived as being unqual-ified, or worse, incompetent, the ramifications for the pro-duction can be disastrous, well beyond this team members’“immediate circle of influence”. (Covey, 1989, p. 81).

The previously mentioned producer who failed to hirea locations manager, and had an entire production show upat the unsuitable chalet, paid a much higher price than theconsiderable expenses associated with that lost day of shoot-ing. She lost the respect and the confidence of her talent andher production team. The comedian was furious with her,the creative process completely broke down and the rest ofthe shoot was miserable. The final result has been describedby friends who saw it as “some of the worst television ever.”

Do Not Lock Down the ScriptMost projects suffer scope changes, and scripts go throughrevisions. These revisions can be extremely minor, such as achange of dialogue. They can be major, with the addition ofa new scene, location, or character. Script revisions are a nor-mal part of the production process. However, there must bea limit. Script revisions obviously have the potential tochange the scope of a production, and therefore must bemonitored with care. The script is the blueprint from whichthe show is created. Late and/or extensive revisions can cre-ate a “moving target” for the production team.

By convention, each script revision is given its ownunique color of paper. Some production managers aim, as apoint of pride, to never duplicate colors. If the number ofversions keeps expanding, this can pose a challenge. DebraPatz, in her book Film Production Management 101describes how a particular show had gone through so manyrevisions that they had literally exhausted every uniquecolor of paper they could get their hands on. And then camethe final blow – a simple, two-page revision that threatenedto push them over the edge. Would they now need to reusea color?

Not to be defeated, she and her staff used rulers and

highlighters and created unique plaid paper for every copyof that final two-page revision. Re-use was avoided. (Pleasenote that I am not endorsing this tactic as a high priorityallocation of precious project management time). If yourproduction has a script that is now labeled “third goldenrodrevision,” then a concerted effort should probably be madeto finalize the script once and for all.

Do Not Manage the Human Side of Production The television production industry has a reputation for longhours, frequent crises, and generally stressful working con-ditions. Office staff, on-set crew and talent are prone toburnout and overload. Ignoring the human equation willlead to mistakes, diminished quality, and less than stellarperformances on camera.

There is an established culture of catering to the stars.From a project management perspective, this makes perfectsense. So much is invested in these people, and so muchdepends on their performance, that every reasonable effortshould be made to maximize this effort.

However, successful project management will dependon careful attention being paid to all members of the crew.Television productions have a way of focusing crises in clus-ters, creating periods of intense stress. Pro-active humanresource management practices can form a vital part of suc-cessful project management.

The job of monitoring the health of the team is mademore difficult by the fact that the freelance specialists whoform the backbone of the industry conduct themselves onthe whole with a great degree of professionalism, and willseldom complain – especially to those who may be a futuresource of employment. This requires an extra degree ofattention to the “temperature” of the team.

The importance of managing the human side of theequation is reinforced by the damage that can be done to aproduction by the sudden loss of a key team member. Largeproductions are amazingly complex projects, pursued at arapid and unrelenting pace. There is almost never time tohalt the process in order to bring a replacement up to speed.

By the same token, human resources management alsoinvolves assuring the competency of team members, andexercising appropriate supervision of their work. There is noprescribed, formal educational path to most jobs in the tel-evision industry, and because of this, hiring decisions arebased mostly on the real-world experience of the candidate.Producers and producing managers prefer to hire peoplewho they have worked with before. Results are everything.

It will usually become obvious if a team member is notpulling his or her weight. However, someone who success-fully masks inferior work can have disastrous consequencesfurther on in the project. I have recently worked on a pro-duction where the relationship between the production co-coordinator and the producer deteriorated throughoutpre-production, finally coming to a head the week beforeshooting. At this point the production co-coordinator quit.This alone could have been enough to throw a very largewrench into the works. There was simply no time to get a


replacement up to speed, with a great many pressing tasks,each on the critical path, demanding immediate attention.

To compound the matter, it was subsequently discov-ered that many of the pre-production details that she hadreported as finalized were, in fact, nothing of the sort.

Not only did this production fail to retain a key teammember at a critical juncture, more importantly, it failed todetect that this team member had in fact, been underper-forming for some time. (This was not entirely surprising,given the level of tension and conflict surrounding heremployment). A direct consequence of this series of eventswas the appearance of many more gray hairs in my beard.

Do Not Secure All Necessary Rights Before ProductionAnything that is protected by copyright that the productionintends to use, such as music, names, or images, will needthe rights secured in advance. While this process is typicallystraightforward (and expensive), occasionally snags dooccur. If copyrighted material ends up being used in pro-duction, and it proves impossible to secure the rights, thenanything and everything in which that material appearsbecomes useless. Necessary rights may include any of thefollowing:

• Clearance for using real names (written permission isnecessary, even if clearance is freely given)

• Music Clearances (consisting of publishing rights,recording rights, artist rights, and arrangement rights)

• Photographic clearances • Miscellaneous clearances • Title searches (a title search is necessary to clear the

title of the production).

In the production I am currently involved with, weimprovise a lot on camera. We must at all times be extreme-ly careful not to hum a recognizable tune, or use any materi-al that is protected by copyright. If you actually pay attentionto the number of times a day anyone in North America willuse a trademarked name, or hum a copyrighted song, youwill realize how easy it is to let something slip by.

If something does slip by, it can be serious. A large-budg-et made-for-TV movie was starring an actor who wasrenowned for his improvisations and additions to the script.During the filming of a pivotal scene he began adlibbing,breaking into a copyrighted song. The moment was so perfectthat the Director decided to go with it, with the Producer’spermission. However, when the Production Manager attempt-ed to secure the rights, she discovered that the productioncompany that was the primary financial backer of the pro-duction had a pre-existing conflict with the conglomerate thatowned the rights to this particular tune. Guess what was usedas a pawn in this conflict. Guess which star was never allowedto improvise copyrighted material again.

Production Phase

Do Not Prepare Contingency Shoots Whenever PossibleThe potential reasons that a planned shoot may proveimpossible on a given day are infinite. Uncooperative

weather, talent problems, poor location scouting and criticalequipment breakdown are just a few examples of factorsthat may come into play. If contingency shooting arrange-ments are not in place, that day is lost, and most probablythe production will still be required to pay full salaries.

Examples of unexpected changes to the shooting sched-ule are so numerous as to be commonplace. Because of this,production crews are generally very adept at getting a day’sshooting in, no matter what it takes. The challenge ariseswhen planned shoots are changed at the very last minute.Very last minute typically means 11:00 p.m. at night, with thecrew call at 6:00 a.m. the next morning At this point it is theFirst Assistant Director’s job to ensure all talent necessary forthe revised shoot will be on set in the morning. It is entirelyconceivable that some of the necessary talent for the revisedshoot had previously been told they had the day off. Theycould be visiting family. They could be out with friends. Theycould be staring at the bottom of a glass in a local dive. ManyFirst Assistant Directors have found themselves in the mostridiculous of situations in the middle of the night, frantical-ly following up any hunch they may have as to the where-abouts of a key actor needed the next morning.

Do Not Feed Your Crew Well on-setThere are very few industries where a complete food packageis provided for employees. Television production is one ofthem. There is not only the expectation of food; there is theexpectation of good food. Simens sums up the reasoningbehind this as follows:

Your crew is waking at 5:00 a.m. and getting home at10:00 p.m. They don’t have the time or energy to buygroceries and prepare meals. Thus, all the energy andnourishment needed for those labor-intensive, anxiety-ridden 18-hour days will come from the fuel you pro-vide. Food prepared improperly will destroy the moralon your set and quite possibly induce your crew to quit. (Simens, 2003, p. 274)

Even for small budget productions, the necessity forgood food exists:

On a big budget it is expected that you feed the crewwell. They are working long, hard hours on the produc-tion, so it is only respectful that you do so. As the over-all budget gets smaller, the catering must be excellenton the production, too; since you are probably not giv-ing the crew enough time or money to buy their owngroceries, you need to feed them well to fuel themthrough production and keep them healthy for theirwork. (Patz, 2002, p. 31)

This seemingly minor point, if ignored, can have rami-fications that are almost unbelievable. This is one area inwhich it is guaranteed that any industry professional youtalk to will have stories of their own. I have witnessed firsthand how a lack of access to convenient drinking waterbecame a huge irritant, leading to a thoroughly disaffectedand demoralized crew. Note that there was drinking water


available. But it was in the tap. Not in chilled plastic bottles.It was just not convenient. And this was almost a show-stopper.

It must also be mentioned that no matter how good thefood, the crew will always find something to complainabout. This seems to be common to the biggest productionsand the smallest. There really is no pleasing all of the peo-ple all of the time.

Post-Production Phase

Do Not Leave Enough Contingency Time to Allow forSignificant Delays During Production The post-production process is the last step before deliveryof the final product. It is very frequent in the industry thatthe post-production process ends up compressed, to makeup for time overruns during production. However, there is alimit as to how much one can compress this phase of pro-duction. If sufficient contingency time is not allowed for up-front, this compressed post-production schedule can haveseveral negative consequences, including:

• Compromised final quality

• Missed delivery deadlines (post-production is alwayson the critical path)

• Increased post-production costs (the cost of crashing this phase of the critical path).

I have spent a significant portion of my career to-date inpost-production, and have experienced first hand the“amazing shrinking post-production schedule” phenome-non. Of all the producers I have worked for and with, therewas only one who consistently met his initial post-produc-tion schedule. Guess which producer I joined forces with tocreate my current television series.

Creative Conflict So far, the problems discussed have been of a technical orlogistical nature. However, one further source of project man-agement difficulties deserves discussion – creative conflict.Creative issues are intertwined in a great many aspects of thetelevision production process. A full discussion of the man-agement of the creative side of the production process isbeyond the scope of this paper. However, successful projectmanagement demands that the potential sources of creativeconflict be proactively managed. As Mason and Gold state:

In order for a production to have a chance for artistic, aswell as financial success, the chemistry between the pro-ducer and the other creative entities must be symbiotic.(2000, p. 33)

There are sources of conflict both on set, and behindthe scenes. Creative disagreements are prone to arise in thefollowing relationships:

Writer/Director This relationship is clearly structured with the writer provid-ing a service to the director. There are very few writers whomaintain any level of artistic control of their screenplay onceit enters production. On big budget productions, it is not

uncommon to have up to ten writers work on a singlescreenplay. However, there are several advantages to main-taining a good working relationship here. A quality writer, ifallowed, can help maintain a level of artistic unity for theproduction. A happy writer will also be willing to make lastminute script changes and adjustments.

Producer/Director Many of the authors sited in this paper listed problems in theproducer / director relationship as being the most potentiallydamaging to a production. In the words of Gold and Mason:“One of the most destructive things that can happen during aproduction is a contentious relationship between producerand director. You avoid it by never letting it happen in the firstplace” (ibid, p. 46). Extreme importance must be placed onthe initial selection process. Address all issues – creative, finan-cial, logistical, scheduling, and casting – ahead of time. Findout who prospective directors like to work with, and who theywill not work with. Talk to industry professionals who haveworked with them in the past. Trust your intuition. Garveymakes the importance of this relationship clear – “You’ll needeach other’s cooperation at all stages in order to keep the filmon schedule and on budget” (Garvey, 1985, p. 144).

Producer/ProducerThe potential for creative conflict in a multi-producer produc-tion is compounded. If lines of authority are not clearly delin-eated, production can degenerate rapidly. Conflict at the topcan be devastating from a project management perspective.

Talent/AnyoneDealing with actors is an art unto itself. Actors approach theproject from an artistic perspective, and a culture clash canoccur with those responsible for project management. AsGold and Mason state:

Dealing with actors will test your diplomatic skills tothe breaking point. Prepare yourself to deal with indi-viduals who are so unlike anyone you have ever dealtwith before, they might as well have come from anoth-er planet or astral plane…Actors are, how would yousay, different from us average people. (2000, p. 51)

Art Linson, in his autobiographical book What JustHappened? (2000) describes some of the events that tran-spired as he produced the Hollywood movie The Edge, star-ring Anthony Hopkins and Alec Baldwin. Alec Baldwin wascast in the role of a dashing New York high fashion photog-rapher who engineers a crash in the Alaskan wilderness inorder to kill his rival in love, etc. The movie chronicles theirdevolution from hip New York urbanites to primal wild men.And there was a huge grizzly bear. You get the picture.

So, Alec Baldwin shows up for the first script readthrough with a full beard, or as Linson says, “a beard that hadrun amok” (2002, p. 65). The production crew kept waitingfor him to shave it off, as the first part of the shoot clearlycalled for the clean-shaven urbanite, but as the first day ofproduction neared, he showed no signs of being razor


friendly. Finally Linson, as producer, had to ask Alec direct-ly to shave. Alec expressed the opinion that his charactershould begin with a beard. He brought up the wordINTEGRITY! (capitals not mine), and made a royal fuss. Heseemed very, very committed to the beard. Alec eventuallystormed out of the room, and disappeared for a week. Noone knew if he would be there on the first day of the shoot.Linson had to make Alec Baldwin’s very unfortunate agentpass on the news that if Alec did not shave, the movie wouldnot be made with him in it. He just did not work as a lead-ing man if he started with the beard.

Alec Baldwin did in fact show up on the first day of theshoot; clean shaven, but not happy. The relationshipbetween himself and the producer was frigid from then on,and the production was not a particular happy one. Linsonstates that this problem had a “far reaching and dampeningeffect on the morale of the whole shoot” (ibid, p. 64). Andit cost Alec Baldwin’s agent his job.

It was only later that Linson discovered a possiblerationale for Alec Baldwin’s seemingly alien behavior:

Months later, I asked an actor friend of mine why Alecwould have been so insistent on not shaving his beard.What sort of funky Stanislavsky decision would makehim so committed? My friend said, without hesitation,”“Alec probably thought he was a little too heavy and hedidn’t like the way his chin looked.” (ibid p. 73)

The greater the status of the star talent, the more potentialfor problems there are, as the star will feel freer to flex theirmuscle. The producer has two primary roles with regards tothe ongoing management of talent:

1. Provide a comfort zone in which the actor can per-form with a minimal amount of outside interference:This involves shielding them to some degree from theoutside interference of the “real world.” This is seenas an important component in enabling the talent todo their best work.

2. Keeping the schedule moving. Actors are famous forobsessing over the micro elements of production – acharacterizing, a specific piece of dialogue. Issues ofscheduling are not their concern. If the director isconstantly forced to override creative concerns infavor of schedule and budgets it may underminetheir relationship with the actors. It is the producer’srole to step in and take some of this pressure off thedirector, ensuring that the overall project manage-ment picture is always kept in mind.

If creative conflict is not carefully managed the finalproduct can be irreparably compromised.

Summary

Despite the level of expertise that exists in the television pro-duction industry, project management remains challenging.The field of television production is obviously highly com-plex and unpredictable. The “worst practices” describedabove comprise a checklist of the most common and poten-tially damaging errors made in the television productionprocess. That these problems crop up over and over again inthe literature point to the ease with which they can be over-looked, and the likelihood of their occurrence.

Thankfully, best practices in this industry have beenextensively documented, and most importantly, highly spe-cialized and experienced talent is readily available. With theright team, a realistic scope, and a concerted effort to avoidthe more predictable pitfalls, any given television produc-tion will be well situated to navigate the inevitable turmoiland controlled chaos that is the bread and butter of theindustry. It is hoped that this paper, in its synthesis of cur-rent views concerning worst practices, will prove useful inthe quest to improve project management practices withinthis challenging environment.

ReferencesBenedetti, R. (2000). From Concept to Screen. Boston:

Allyn and Bacon Publishing. Broughton, I. (2001). Producers on Producing. New York:

McFarland & Company, Inc.Elliott, P. (1972). The Making of a Television Series.

London: Constable.. Garvey, H. (1985). Before You Shoot. Los Gatos, CA: Shire

Press.Gold, D. & Mason, P. (2000). Producing for Hollywood.

New York: Allworth Press.Gorica, F. (1999). Canadian Television Financing.

Scarborough: Centennial College Press.Linson, A. (2002). What Just Happened? Bitter Hollywood

Tales from the Frontline. New York: Bloomsbury.Orlebar, J. (2002). Digital Television Production. London:

Arnold Publishing.Paisner, D. (2000). Horizontal Hold: The Making and

Breaking of a Network Television Pilot. New York:iUniverse.com.

Patz, D. S. (2002). Film Production Management 101.Studio City. Wiese Productions

Project Management Institute (2000). A Guide to TheProject Management Body of Knowledge (PMBOK® Guide).Newtown Square, PA: Project Management Institute: Author

Simens, Dov S-S. (2003). From Reel to Deal. New York:Warner Books.

Zettl, H. (2002) Television Production Handbook. SanFrancisco: Wadsworth Publishing.

With thanks to Anne-Sophie Brieger and Jolyn Somervil for their generoustime, advice, and critique. With special thanks to Prof. John Rakos, PMP, forhis input, guidance, and encouragement.

GEORGE BROOK has enjoyed a varied and highly

successful career in the entertainment industry,

contributing to the production of film, television,

animation, and video games in a number of

capacities. Highlights include a Gemini nomina-

tion (the Canadian equivalent of an Emmy) in the

category of Best Sound Design for a

Documentary, and a Gemini award for Best

Practical Information Program or Series. He has

just wrapped up production on the award-win-

ning home improvement series The Broken HouseChronicles, serving as co-creator, co-writer, and

co-host. BHC is currently airing in the U.S.,

Canada, and England. George has also recently

completed a Masters of Business Administration

at the University of Ottawa. He has been studying

project management under the guidance of Prof.

John Rakos, and is engaged in an examination of

how PM methodology can contribute to the tele-

vision production industry.


Background

R isk management is one of the nine Knowledge Areas within the ProjectManagement Institute’s A Guide to the Project Management Body ofKnowledge (PMBOK® Guide) (Project Management Institute [PMI],

2000). An important component of risk management relates to project sched-ule uncertainty. Traditionally, project schedule uncertainty has been addressedby considering the uncertainty related to activity duration. The most well-known technique is Program Evaluation and Review Technique (PERT), devel-oped by the U.S. federal government in the late 1950s (Malcolm, Rosenboom,Clark, & Fazar, 1959). PERT models uncertain activity durations by collectingoptimistic, most likely, and pessimistic duration estimates of all activities.Although PERT is sometimes used to estimate the expected length of the crit-ical path, Monte Carlo simulation is more commonly used to estimate thecriticality of different activities and paths, as well as the probability distribu-tion of the project duration.

The importance of addressing uncertainty related to activity duration canbe seen by considering the results of surveys regarding available project man-agement software and practitioner use of project network analysis methods.For example, a 1999 software survey by the Project Management Instituteshowed that about 20% of project management software packages had MonteCarlo simulation capability (PMI, 1999). Also, a more recent survey of proj-ect management professionals (Pollack-Johnson & Liberatore, 2003) foundthat nearly 70% of the respondents used critical path analysis, and 17% usedprobabilistic analysis and/or simulation within project management software.However, project management professionals responding to this survey alsoreported a need for research on how to better address uncertain network struc-tures (Pollack-Johnson & Liberatore, 2003).

Uncertain project network structures can arise in a variety of ways. Forexample, in a new product or process development project, it may be uncer-tain whether quality requirements will lead to one or more re-work cycles. Ina new technology-implementation project, it may be uncertain whether for-mal staff training activities are required. In a research project, depending uponthe results obtained in the first stage, different sequences of activities may fol-low. In a pharmaceutical development project, additional testing may be

PROJECT PLANNING UNDER UNCERTAINTY

USING SCENARIO ANALYSIS

BRUCE POLLACK-JOHNSON, Department of Mathematical SciencesVillanova University, Villanova, PA

MATTHEW J. LIBERATORE*, Department of Decision and Information TechnologiesVillanova University, Villanova, PA

ABSTRACT

An important component of risk manage-

ment relates to project schedule uncer-

tainty. To address this issue, a scenario

(i.e., macro-level approach) for modeling

and analyzing projects with significant

uncertainty in their network structure

and/or durations of some activities is pre-

sented. This approach requires that a set

of project network scenarios is able to be

identified, each with an assessed proba-

bility of occurrence. These scenarios

might differ according to the results of

uncertain events that could occur during

the course of the project, uncertain activi-

ty durations (whether independent or

dependent), finite loops where repeated

activities can have different durations, or

a combination of these. Advantages of our

approach include the use of standard

methods and software, as well as greater

accessibility to, and likelihood of, the use

of uncertainty analysis in project plan-

ning. Several examples are used to illus-

trate the suggested approach.

Keywords: Project scheduling; risk man-

agement; project network analysis


Vol. 36, No. 1, 15-26, ISSN 8756-9728/03

*corresponding author


or finish activities, we add dummyactivities (with zero duration) for thispurpose.

The length of the longest (but notnecessarily unique) path from the startactivity to the finish activity is the min-imum project completion time. Such apath is called a critical path, the activi-ties along it are called critical path activ-ities, and we will denote the length ofthe path as LCP.

Let us define:

j � activity j

aj = activity j

Pj = set of all immediate predecessors of activity j

ESj = earliest possible start time for activity j

EFj = earliest possible finish time for activity j

LSj = latest possible start time for activity j (that would not delay the project finish date)

LFj = latest possible finish time for activity j (that would not delay the project finish date)

TSj = total slack for activity j(the time it could be individually delayed without delaying the entire project)

The critical path can be deter-mined by performing forward andbackward passes through the projectnetwork. The forward pass includescomputing the earliest start (ES) andthe earliest finish (EF) times for eachactivity, while the backward passrequires computing the latest start (LS)and latest finish (LF) times. Once bothpasses are completed, the total slack(TS) for each activity can be computed.The total slack of each activity is thedifference between its ES and LS.

Any path from the start activity tothe finish activity consisting only ofactivities with a total slack of 0 is calleda critical path. Any activity with a totalslack of 0 is called a critical activity,since any delay in that activity alonewill delay the whole project (the soon-est it can be completed) by the same

required if certain pending legislationpasses.

Simulation packages such as theGraphical Evaluation and ReviewTechnique, or GERT, (Pritsker & Happ,1966; Wiest & Levy, 1977) were devel-oped to model some probabilistic net-works similar to the examplespresented above. Even when GERT wasproduced and supported, however, itassumed that repeated activities withinloops had identical duration distribu-tions (i.e., the same average durationfor each repetition) (Neumann, 1990).It also assumed independence of dura-tion distributions (i.e., the time oneactivity takes does not influence thetime another takes). The approach wepropose in this paper can handle all ofthese situations. GERT is no longerproduced and supported, but many ofits capabilities are now available inrelated, general-purpose simulationsoftware packages called Visual SLAMand AweSim (Pritsker & O’Reilly,1999). These packages enable the userto develop GERT-type project simula-tion models, but are not specificallydesigned for project management asGERT was, can be difficult to use, andbecome even more challenging as theproject network size and complexityincrease.

In addition, the simulationapproach itself is micro-oriented,since it models the uncertainty at theactivity level. There are situationswhere the uncertainty is related to dif-ferent sequences or combinations ofevents occurring or not occurring,such as in the pharmaceutical pendinglegislation example, and, therefore,can be conceived as relating to differ-ent project scenarios rather than indi-vidual activities.

For these reasons, a simplerapproach is needed when there areimportant project network uncertain-ties that must be addressed as part ofthe project risk analysis and assess-ment process. Existing methods areespecially inadequate for loops whererepeated activities do not have identi-cal duration distributions; for depend-ent duration distributions; and forobtaining detailed and summary(expected) early/late start/finish times,

criticalities, and total slack (float) val-ues for individual activities, as well asfor common or aggregated activitiesacross probabilistic branches or withinloops.

The purpose of this paper is topresent a scenario, or macro-levelapproach, for modeling and analyzingprojects with significant uncertainty intheir network structure and/or thedurations of some activities. Thisapproach is applicable for projectschedule risk analysis and contingencyplanning. An advantage of ourapproach is the use of standard meth-ods, such as critical path analysis andprobability analysis, and popular soft-ware packages, such as MicrosoftProject® and Excel®, to solve project-planning problems with uncertain net-work structures. The benefits of ourapproach are its ability to identify thesame activities in different scenariosand summarize results for them over-all, with modest data requirements,greater simplicity, and comprehensi-bility. This would lead to a greater like-lihood of the use of uncertaintyanalysis, and some additional insightsinto the impact of uncertainty.

First, we present our scenarioapproach. Next, some examples ofuncertain networks are presented andanalyzed using our approach.Conclusions and suggestions for futurestudy follow.

Project Networks and the Critical Path

A traditional project network inActivity on Node (AoN) form isdefined as a set of nodes representingactivities that are connected by direct-ed arcs to represent precedence rela-tionships. If one activity must occurdirectly before a second activity, we saythat the second activity is an immediatepredecessor of the first. Cycles (loops) ofactivities within the project networkare not allowed. We assume that thereis only one activity without predeces-sors (possibly an artificially construct-ed dummy activity) and is called thestart activity. We also assume that thereis only one activity without successors(possibly a dummy), which is calledthe finish activity. If the original proj-ect network does not have unique start


ditional, as above.)Some projects (see example 2)

could be conceived of as involvingfinite loops, so we can use double sub-script notation to indicate multipleiterations of the same activity, follow-ing the pattern below:

aj,k = iteration k of activity jIn such a case, we can define the

following:

dj,k—

= average duration of aj,k

(considering the duration to be 0when it does not occur)

dj,•—

= average total duration of alliterations of activity j (again,

considering the duration to be 0when it does not occur)

ESj,•—= average ES of the first of all iterations of activity j

EFj,•— = average EF of the last of alliterations of activity j

LSj,•— = average LS of the first of alliterations of activity j

LFj,•—= average LF of the last of all iterations of activity j

(Again, these could be made condi-tional if necessary.) The calculationsare straightforward, consistent with theearlier discussion.

Examples

1. Random EventConsider the project network given asTable 1. Suppose that this problemincludes a random event, such as theresult of pending legislation that couldrequire an additional testing activity,a4. There are three possible scenarios:

(Denoted as N(1))—no additionaltesting (legislation does not pass),with a probability of 0.5

(Denoted as N(2))—minimal addi-tional testing, duration of 4, with aprobability of 0.3

(Denoted as N(3))—significantadditional testing, duration of 11, witha probability of 0.2

In scenarios 2 and 3, a4 has imme-diate predecessors of a2 and a3, and isan immediate predecessor of a6.

We can represent this situationschematically with a modified version

Let us also define:

c—

j = expected criticality of activity jover all network scenarios

c—j|occur = expected criticality of activity j, given that aj actually occurs

The expected criticality is calcu-lated in the same way as the expectedvalue calculations described earlier.We will use the subscript “j|occur”notation to refer to conditional means(conditioned on activity j actuallyoccurring) for other quantities aswell. These are standard conditionalexpected values, and are calculated ina manner similar to the other expect-ed value calculations (the sum of thevalues times the probabilities of theiroccurring), but only for the scenariosin which activity j occurs. This total isthen divided by the probability thatactivity j occurs to get the condition-al expected value or mean.

We will use similar notation andcalculations to define:

TS—

j|occur = expected total slack ofactivity j, given that aj actuallyoccurs

If activity j occurs in all scenarios, wecan also similarly define and calculate:

ES—

j = expected early start time foractivity j

EF—

j = expected early finish time for activity j

LS—

j = expected late start time foractivity j

LF—

j = expected late finish time foractivity j

(If aj did not occur in some sce-narios, we could also make these con-

amount of time. We say that a criticalactivity has a criticality of 1, and anyother activity has a criticality of 0.

The Scenario Approach

In this paper, we focus on a sce-nario approach for analyzing uncertainproject networks. The uncertain net-work structure is expressed through aset of network scenarios, each having aspecified probability of occurrence. Forexample, if a finite loop is present, theproblem cannot be represented direct-ly using the standard project networkdescribed in the previous section.However, using a network scenarioapproach, a set of project networkswithout loops can be constructed andanalyzed using conventional tech-niques. A similar approach can be usedwhen considering probabilisticbranching.

In what follows, we initiallyassume that the activity durations areknown with certainty, although theapproach presented can be easilyextended to the case of probabilisticdurations, especially if only a limitednumber of activities have significantuncertainty in their durations.

Let us define:i � network scenario i

N(i) = network scenario i

p(i) = probability of network scenario i

oj = probability that activity jwill actually occur

d—

j = expected duration of activity j(considering its duration to be 0 if it does not occur)

LCP(i) = critical path length for

network scenario i

L—CP = expected critical path lengthover all network scenarios

The probability that each activitywill occur is just the sum of the proba-bilities of all scenarios in which thatactivity occurs. The calculations ofexpected quantities are standardexpected value calculations: the valuein each scenario is multiplied by theprobability of that scenario, and thenall of the results are added together.

=1 if activity j is critical in network scenario (only if aj occurs)

cj (i) = criticality of activity j in

network scenario i

0 if not (including if aj does not occur)


of an Activity on Node (AoN) network,where arrows represent precedencerelations and dotted arrows indicateuncertain precedence relations (onesthat exist in some scenarios, and notothers), as shown in Figure 1.

One way of depicting ourapproach is through the modifiedproject network shown as Figure 2,where a circular node is a probabilisticbranch.

Using our notation defined in theprevious section, as shown in Figure 2,the scenario probabilities are: p(1) =0.5, p(2) = 0.3, and p(3) = 0.2. Note thatactivity 4 (a4) is the only activity thatdoes not always occur:

d—

4 =(0.5)(0)+(0.3)(4)+(0.2)(11)=3.4

A critical path analysis of each ofthe three scenarios was performedusing Microsoft Project 2002. Afteranalyzing the base case, the remainingtwo scenarios were analyzed by modi-fying the base case (adding a4, andadjusting the predecessors). The resultswere then copied to Excel, and theTotal Slack column was transformedinto numbers for future analytic pur-poses1. The preceding calculationswere then performed for each scenario,with the results given in Tables 2through 4. Now we can do the calcula-tion of the expected critical pathlength:

L—CP =0.5(32)+0.3(33)+0.2(40)=33.9

We can also calculate the expectedcriticalities and total slack for each activ-ity over all of the scenarios, as definedearlier. These are given in Table 5.

The results show that if a4 occurs,it is critical, and if significant addition-al testing is required, there will be asubstantial project delay. Notice that inthe baseline case (Scenario 1), a5 iscritical, but if a4 occurs, then a5 is notcritical, with a total slack of 1 inScenario 2 and 8 in Scenario 3. Thissuggests that planning for the projectcan be conditional; once it is knownwhether the pending legislation passesor not, and therefore whether a4 occursor not, appropriate priority can begiven to a5. We should also point out

that if the situation had been repre-sented by including a4 in the networkdiagram for all three cases, and justgiving it a duration of 0 in Scenario 1,then the results for Scenario 1 wouldbe incorrect, because the networkstructure would force a2 to be a prede-cessor of a6 (when, in reality, it is not).Since the duration of a2 is 8 and theduration of a3 is 6, the faulty modelwould indicate that the early start timeof a6 is 2 weeks later than it is in reali-ty. This observation points out theimportance of specifying each scenarioas accurately as possible, and high-lights the value of the scenarioapproach.

2. Loops

Let us now consider an example thatinvolves finite loops. We start againwith a base case project definition, asdepicted in Table 6. To understand thefull problem situation, imagine that a2

involves producing some kind of pro-totype, and a3involves testing it. If thetest fails (which we will assume has aprobability of 0.2), then both activitieswill have to be repeated, but the dura-tions will be shorter (1 for a2 and 2 fora3, as opposed to initial durations of 3and 4, respectively), since we will justbe refining the production process.The other 80% of the time, we assumethe prototype passes the test (weassume the probability of failing twiceis negligible). In a somewhat similar

aj Pj dj

a0 --- 0a1 {a0} 7a2 {a1} 8a3 {a1} 6a5 {a2} 12a6 {a3} 9a7 {a5 ,a6} 5a8 {a7} 0

Table 1: Random event network: base case

a0 a1 a7 a8a4

a2 a5

a3 a6

Figure 1: Schematic micro-approach project network graph for the random event example


a0 a1 a7 a8

a0 a1 a7 a8

a0 a1 a4

a4

a7 a8

a2 a5

a3 a6

a2 a5

a3 a6

a2 a5

a3 a6

p(2)=.3

p(3)=.2

d4(3)=11

d4(2)=4

p(1)=.5

Figure 2: Scenario macro-approach diagram for random event example


a0 a1 a6 a8a4

a2 a3

a5 a7

a9

Figure 3: Schematic micro-approach diagram of the loop example

a0 a1 a6 a8a4,1 a4,2 a4,3

a2,1 a3,1

a5 a7

a2,2 a3,2

a9

Figure 4: Alternative schematic micro-approach diagram for loop example

N (1)

N (2)

N (3)

N (4)

N (5)

N (6)

Figure 5: Macro-approach diagram for loopingand uncertain durations examples

a0 a1 a3 a8 a9

a2 a5

a6 a7

a4

d6=9 d7=5

d2=1d1=4d0=0 d9= 0d8=6

Figure 6: Basic network diagram for uncertain activity duration example


fashion, a4 involves a casting processthat may not work (the cast may breakif the materials are not thick enough).The original activity is a “quick anddirty” attempt to do the casting, withan estimated 60% chance of success. Ifthe process fails, the activity will berepeated, but more time will be takento do it right (duration of 7 vs. 5). Eventhen, we assume a 10% chance of fail-ure the second time around, forcing athird repetition of the casting activity,this time with a duration of 9. Weassume the chances of a third failureare negligible.

This problem could be dia-grammed most directly as shown inFigure 3. Because of these types oflooping, certain activities may end upbeing repeated once or twice in thisexample. We could always give theserepetitions different activity numbernames, but this would not reflect their

connections to each other. As men-tioned at the end of the previous sec-tion, we will use double subscripts,where the first subscript representsthe original initial activity from thebase case, and the second subscriptrepresents which iteration of thatactivity we are discussing. This nota-tion will apply to all definitions wehave made that involved a subscriptof j, where applicable. (For activitiesthat are not involved in looping, wecould make all of them have a secondsubscript of 1, but that seems unnec-essarily cumbersome.)

One way to represent this problemschematically, similar to what we didfor our first example, is shown inFigure 4.

Let us assume that the two casesfor the first loop (whether the test failsor not) and the three cases for the sec-ond loop (whether the casting does

not fail the first time, fails only the firsttime, or fails twice) are assumed to beindependent of each other2. Thenthere are six different scenarios to con-sider (three cases in the second loopfor each of the two cases of the firstloop). The probability for each sce-nario is just the product of the corre-sponding two probabilities for the twoloops in that scenario. Thus, the proj-ect could also be conceived as shownin Figure 5, where N(1), N(2),…, N(6) arethe standard network diagrams for thesix scenarios.

This way of thinking of the prob-lem again makes it clear that we can dothe overall analysis by simply analyz-ing each scenario, then combining theresults. We will number the scenariosso that they have the following inter-pretations:

• Scenario 1: First loop test is suc-cessful the first time; second loop

4 Random Event – Senario 1 prob = 0.5

5 Task Name Duration (wks) Predecessors Early Start Early Finish Late Start Late Finish Total Slack (wks) Criticality

6 Random Event Example 32 5/19/2003 8:00 12/26/2003 17:00 5/19/2003 8:00 12/26/2003 17:00

7 A0 0 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 0 1

8 A1 7 2 5/19/2003 8:00 7/4/2003 17:00 5/19/2003 8:00 7/4/2003 17:00 0 1

9 A2 8 3 7/7/2003 8:00 8/29/2003 17:00 7/7/2003 8:00 8/29/2003 17:00 0 1

10 A3 6 3 7/7/2003 8:00 8/15/2003 17:00 8/11/2003 8:00 9/19/2003 17:00 5 0

11 A5 12 4 9/1/2003 8:00 11/21/2003 17:00 9/1/2003 8:00 11/21/2003 17:00 0 1

12 A6 9 5 8/18/2003 8:00 10/17/2003 17:00 9/22/2003 8:00 11/21/2003 17:00 5 0

13 A7 5 6,7 11/24/2003 8:00 12/26/2003 17:00 11/24/2003 8:00 12/26/2003 17:00 0 1

14 A8 0 8 12/26/2003 17:00 12/26/2003 17:00 12/26/2003 17:00 12/26/2003 17:00 0 1

15 A4

Table 2: Random event network: calculations for scenario 1 ( LCP(1) = 32 )




20 A0 0 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 0 1

21 A1 7 2 5/19/2003 8:00 7/4/2003 17:00 5/19/2003 8:00 7/4/2003 17:00 0 1

22 A2 8 3 7/7/2003 8:00 8/29/2003 17:00 7/7/2003 8:00 8/29/2003 17:00 0 1

23 A3 6 3 7/7/2003 8:00 8/15/2003 17:00 7/21/2003 8:00 8/29/2003 17:00 2 0

24 A5 12 4 9/1/2003 8:00 11/21/2003 17:00 9/8/2003 8:00 11/28/2003 17:00 1 0

25 A6 9 5,10 9/29/2003 8:00 11/28/2003 17:00 9/29/2003 8:00 11/28/2003 17:00 0 1

26 A7 5 6,7 12/1/2003 8:00 1/2/2004 17:00 12/1/2003 8:00 1/2/2004 17:00 0 1

27 A8 0 8 12/2/2004 17:00 1/2/2004 17:00 1/2/2004 17:00 1/2/2004 17:00 0 1

28 A4 4 4,5 9/1/2003 8:00 9/26/2003 17:00 9/1/2003 8:00 9/26/2003 17:00 0 1

Table 3: Random event network: calculations for scenario 2 ( LCP(2) = 33)


casting is successful the first time.• Scenario 2: First loop test is suc-cessful the first time; second loopcasting fails the first time, but issuccessful the second time.• Scenario 3: First loop test is suc-cessful the first time; second loopcasting fails the first and secondtimes, but is successful the thirdtime.• Scenario 4: First loop test failsthe first time, but is successful thesecond time; second loop castingis successful the first time.• Scenario 5: First loop test failsthe first time, but is successful thesecond time; second loop castingfails the first time, but is successfulthe second time.• Scenario 6: First loop test failsthe first time, but is successful thesecond time; second loop castingfails the first and second times,but is successful the third time.Again, we used Microsoft Project

2002 to analyze each of these scenar-ios, and passed the results to Excel.Rather than providing the completeresults for each individual scenario asin the Random Event example above,

we will instead simply summarize theresults in Table 7.

Notice, for example, that activitiesa2,1 and a3,1 (the first occurrence of theprototype production and testingactivities) are critical in scenarios 1, 4,and 5, but not in scenarios 2, 3, and 6(in which both activities have totalslack values of 2, 11, and 8, respective-ly). On the other hand, a4,1 (first occur-rence of the casting activity) is exactlythe opposite: it is critical in scenarios2, 3, and 6, but not in scenarios 1, 4,and 5 (where total slack values of thatactivity are 5, 8, and 1, respectively).

Using the probabilities given inTable 7, we can now do the calculationof the expected critical path length:

L—CP =0.480(37)+0.288(39)+

(0.120+0.072)(40)+(0.032+0.008)

(48)=38.592

We can also calculate the expectedcriticalities and total slack for each activ-ity over all of the scenarios, as definedearlier. These are given in Table 8.

In the base case, the first loop iscritical. If the first loop is successful,whether or not the second loop failsonce or twice, the second loop is criti-cal. If the first loop fails, it is criticalunless the second loop fails twice (avery low-probability event).

Notice that the loop nature of thisexample means that activities 2 and 3sometimes occur twice, and activity 4can occur as many as three times.Based on the original data, we cancompute the average total time spent




33 A0 0 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 5/19/2003 8:00 0 1

34 A1 7 2 5/19/2003 8:00 7/4/2003 17:00 5/19/2003 8:00 7/4/2003 17:00 0 1

35 A2 8 3 7/7/2003 8:00 8/29/2003 17:00 7/7/2003 8:00 8/29/2003 17:00 0 1

36 A3 6 3 7/7/2003 8:00 8/15/2003 17:00 7/21/2003 8:00 8/29/2003 17:00 2 0

37 A5 12 4 9/1/2003 8:00 11/21/2003 17:00 10/27/2003 8:00 1/16/2004 17:00 8 0

38 A6 9 5,10 11/17/2003 8:00 1/16/2004 17:00 11/17/2003 8:00 1/16/2004 17:00 0 1

39 A7 5 6,7 1/9/2003 8:00 2/20/2004 17:00 1/19/2004 8:00 2/20/2004 17:00 0 1

40 A8 0 8 2/20/2004 17:00 2/20/2004 17:00 2/20/2004 17:00 2/20/2004 17:00 0 1

41 A4 11 4,5 9/1/2003 8:00 11/14/2003 17:00 9/1/2003 8:00 11/14/2003 17:00 0 1

Table 4: Random event network: calculations for scenario 3 ( LCP(3) = 40)

3 Activity Prob. Occur Exp. Crit. Exp. Crit. Occur Exp. TS Occur

4 A0 1 1 1 0

5 A1 1 1 1 0

6 A2 1 1 1 0

7 A3 1 0 0 3.5

8 A5 1 0.5 0.5 1.9

9 A6 1 0.5 0.5 2.5

10 A7 1 1 1 0

11 A8 1 1 1 0

12 A4 0.5 0.5 1 0

Table 5: Random event network: probability of occurrence, expected criticalities, and expectedtotal slack for each activity

aj Pj dj

a0 --- 0a1 {a0} 6a2 {a1} 3a3 {a2} 4a4 {a1} 5a5 {a1} 10a6 {a3} 11a7 {a4,a5} 8a8 {a6 ,a7} 13a9 {a8} 0

Table 6: Loop network: base case


on each of these activities:

d—

2 =d2,1+(0.2).d2,2=3+(0.2).1=32

(d—

2,2 =0.2)

d—

3 =d3,1+(0.2).d3,2=4+(0.2).2=44

(d—

3,2 =0.4)

d—

4 =d4,1+(0.4).d4,2+(0.1).d4,3=

5+(0.4).7+(0.1).9=8.7

(d—

4,2 =2.8, d—

4,3=0.9 )

In other words, the total expectedtime spent on producing prototypes is3.2 weeks, the total expected timespent on testing prototypes is 4.4weeks, and the total expected timespent on casting is 8.7 weeks.

Using the calculations done forour analysis, we can also calculate fig-ures such as expected early start andlate start times (the earliest and latestpoints in time when the first repetition

of that activity can start, averaged overthe scenarios, weighted by their proba-bilities), as well as early finish and latefinish times (the earliest and latestpoints in time when the last repetitionof that activity can finish, averaged overthe scenarios, weighted by their proba-bilities) for each of these loop activi-ties. These calculations were discussedat the end of the Modeling Approachsection.

ES—

2,.=6, ES—

3,.=9, ES—

4,.=6

EF—

2,.=(0.480+0.288+0.032).(9)+(0.120+0.072+0.008).(14)=10.0

EF—

3,.=(0.480+0.288+0.032).(13)+(0.120+0.072+0.008).(16)=13.6

EF—

4,.=(0.480+0.120).(11)+

(0.288+0.0720).(18)+(0.032+0.008).(27)

=14.16

Using analogous calculations,we obtain:

LS—

2,.=6.992, LS—

3,.=9.992, LS—

4,.=9.432,

LF—

2,.=10.992, LF—

3,.=14.592,

and LF—

4,.=17.592

2 Scenario 1 2 3 4 5 6

3 Probability 0.480 0.288 0.032 0.120 0.072 0.008

4 Critical Path Length 37 39 48 40 40 48

5 Activity Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality

6 A0 0 1 0 1 0 1 0 1 0 1 0 1

7 A1 0 1 0 1 0 1 0 1 0 1 0 1

8 A2, 1 0 1 2 0 11 0 0 1 0 1 8 0

9 A3, 1 0 1 2 0 11 0 0 1 0 1 8 0

10 A4, 1 5 0 0 1 0 1 8 0 1 0 0 1

11 A5 0 1 2 0 11 0 3 0 3 0 11 0

12 A6 0 1 2 0 11 0 0 1 0 1 8 0

13 A7 0 1 0 1 0 1 3 0 1 0 0 1

14 A8 0 1 0 1 0 1 0 1 0 1 0 1

15 A9 0 1 0 1 0 1 0 1 0 1 0 1

16 A2, 2 0 1 0 1 8 1

17 A3, 2 0 1 0 1 8 0

18 A4, 2 0 0 0 1 1 0 0 1

19 A4, 3 0 1 0 1

Table 7: Loop network: calculations for scenarios 1-6

3 Activity Prob. Occur Exp. Crit. Exp. Crit. Occur Exp. TS Occur

4 A0 1 1.000 1 0

5 A1 1 1.000 1 0

6 A2, 1 1 0.672 0.672 0.992

7 A3, 1 1 0.672 0.672 0.992

8 A4, 1 1 0.328 0328 3.432

9 A5 1 0.480 0.48 1.592

10 A6 1 0.672 0.672 0.992

11 A7 1 0.808 0.808 0.432

12 A8 1 1.000 1 0

13 A9 1 1.000 1 0

14 A2, 2 0.2 0.192 0.96 0.32

15 A3, 2 0.2 0.192 0.96 0.32

16 A4, 2 0.4 0.328 0.82 0.18

17 A, 3 0.04 0.040 1 0

Table 8: Network: probability of occurrence, expected criticalities, and expected total slack for each activity


This means, for example, that theexpected earliest time we can start pro-totype production is 6 weeks into theproject, the expected earliest time wecan complete all prototype productionis 10 weeks into the project, the expect-ed latest time we can start prototypeproduction is just under 7 weeks intothe project, and the expected latesttime we can complete prototype pro-duction is just under 11 weeks into theproject. If desired, the actual ES, EF, LS,

and LF times for each activity in eachscenario could also easily be generatedand reported in a table, for a moredetailed risk analysis.

Activities 0, 1, 8, and 9 (a0, a1, a8,and a9, respectively) are always critical,

due to the structure of the project net-work. Notice that a4,1 has low expectedcriticality (both unconditional andconditional) and the highest expectedtotal slack, so it could be given the low-est priority in scheduling. a5 is similar,but not as extreme, so it could be giventhe second-lowest priority in scheduling.Also, note that any of the repeatedactivities (i.e., the last four activities inTable 8), if they occur, have very high

(conditional) expected criticalities;therefore, they must be given high pri-ority if they occur.

3. Dependent Activity Durations

In this example, we assume that there isa network scenario for every combina-tion of discrete random durations. Thebasic structure of this example is shownin Figure 6. In this case, there are noactivities that occur in some scenariosand not others. The uncertainty liesonly in the durations of activities 3, 4,

and 5. These durations are not assumedto be totally independent, as an illustra-tion of a more general case. The dura-tions of activities 3 and 4 are assumedto be dependent, with the probabilitydistribution given in Table 9. For exam-

ple, the three outcomes/probabilitiescould correspond to no precipitation,light precipitation, and heavy precipita-tion. Activities 3 and 4 will be per-formed at approximately the same time,but activity 3’s duration may justdepend on whether or not there is pre-cipitation (e.g., pouring concrete),while activity 4’s duration is more sen-sitive to the severity of the precipitation.

The duration of activity 5 is

assumed to be independent of thecombination of values of activities 3and 4, with the probability distribu-tion given in Table 10.

Since the two probability distri-butions are independent, we have atotal of six different possible scenar-

ios, with probabilities given in Table11.

Since this example has six scenar-ios, like the previous example, Figure 5also represents the macro-levelapproach for this problem. From Table11, we can calculate the expected dura-tions of the three uncertain activities:

d—

3 =(0.48+0.12).(6)+(0.24+0.06+

0.08+0.02).(11)=8.0

d—

4 =(0.48+0.12).(3)+(0.24+0.06).(4)+

(0.08+0.02).(5)=3.5

d—

5 =(0.48+0.24+0.08).(8)+(0.12+0.06+

0.02).(10)=8.4

Table 12 shows a summary of theresults for each of these scenarios.

Now we can do the calculation ofthe expected critical path length:

L—

CP =(0.48+0.12).24+(0.24+0.06+

0.08+0.02).27=25.2

We can also calculate the expectedcriticalities and total slack for eachactivity over all of the scenarios, asdefined earlier. These are given inTable 13.

Activity 3 is critical in all caseswhere its duration is longest (11),regardless of the duration of activities4 and 5. Activities 4 and 5 are criticalonly when activity 3’s duration isshortest (6), and activity 5’s durationis longest (10). Note that, in this

example, the conditional expectedtotal slack is also unconditional, sinceall activities occur in every scenario.

Conclusions and Managerial

Implications

This paper presents an alternatemacro-level or scenario approach formodeling and analyzing projects withuncertain networks. This approach isapplicable for project schedule risk

d3 d4 Probability

6 3 .6

11 4 .3

11 5 .1

Table 9: Uncertain durations of activities 3 and 4

d5 Probability

8 .8

10 .2

Table 10: Uncertain duration of activity 5

Scenario d3 d4 d5 Probability

1 6 3 8 .48

2 6 3 10 .12

3 11 4 8 .24

4 11 4 10 .06

5 11 5 8 .08

6 11 5 10 .02

Table 11: Scenarios for uncertain duration example


analysis and contingency planning.During the project planning process, aseries of project network scenarios canbe identified, each with an assessedprobability of occurrence. These sce-narios might differ according to theresults of uncertain events that could

occur during the course of the project,uncertain (possibly dependent) activi-ty durations, finite loops, or any com-bination of these three.

We have presented a scenarioapproach for modeling and analyzingthese uncertain project situations. Anadvantage of our approach is that itgeneralizes standard project networkanalysis methods, such as critical pathanalysis, to the network scenario level.Our approach also leads to the devel-opment of new project network uncer-tainty measures, including expected

and conditional activity criticality andslack, as well as aggregated expecteddurations, and early and late start andfinish times for repeated activitiesresulting from looping or stochasticbranching. A second benefit is greateraccessibility and likelihood of the use

of uncertainty analysis in project plan-ning, since the modest data needs andstraightforward analysis are focused onkey scenarios driving schedule uncer-tainty. Examples were presented toillustrate the approach, including ran-dom events, loops, and dependent ran-dom activity times.

The scenario method proposedhere is a direct extension of existingproject scheduling procedures, anduses software and techniques familiarto (and easily accessible by) almost allproject managers. This approach pro-

vides exact results, as well as simplicity,and offers advantages in analyzing andinterpreting the impact of uncertainty,especially when the number of criticaluncertainties is relatively small. Theproposed approach can handle uncer-tain activity durations and finite loopswith varying durations for each repeti-tion, allows the durations of activitiesto be dependent upon others, and pro-vides the ability to summarize criticalpath analysis information aboutrepeated and uncertain activities. Forthese reasons, we believe that ourapproach is more manageable andcomprehensive than existing methodsfor project managers analyzing theeffects of uncertainty on their projectschedule.

References and Notes

Malcolm, D. G., Rosenboom, J.H., Clark, C. E., & Fazar, W. (1959).Application of a technique for researchand development project evaluation.Operations Research, 7(5), 646-669.

Neumann, K. (1990). Stochasticproject networks: Temporal analysis,scheduling, and cost minimization.Berlin: Springer-Verlag.

Pollack-Johnson, B., & Liberatore,M. J. (2003). Analytical techniques inproject planning and control: Currentpractice and future research directions.Unpublished manuscript, Villanova,PA: Villanova University, Departmentof Decision and InformationTechnologies.

2 Scenario 1 2 3 4 5 6

3 Probability 0.480 0.120 0.240 0.060 0.080 0.020

4 Critical Path Length 24 24 27 27 27 27

5 Activity Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality Total Slack Criticality

6 A0 0 1 0 1 0 1 0 1 0 1 0 1

7 A1 0 1 0 1 0 1 0 1 0 1 0 1

8 A2 2 0 0 1 0 1 0 1 0 1 0 1

9 A3 2 0 2 0 0 1 0 1 0 1 0 1

10 A4 2 0 0 1 4 0 2 0 3 0 1 0

11 A5 2 0 0 1 4 0 2 0 3 0 1 0

12 A6 0 1 0 1 3 0 3 0 3 0 3 0

13 A7 0 1 0 1 0 1 0 1 0 1 0 1

14 A8 0 1 0 1 0 1 0 1 0 1 0 1

15 A9 0 1 0 1 0 1 0 1 0 1 0 1

Table 12: Uncertain activity durations network: calculations for scenarios 1 - 6

3 Activity Exp. Crit. Exp. Crit. Occur Exp. TS Occur

4 A0 1 1 0

5 A1 1 1 0

6 A2 0.52 0.52 0.96

7 A3 0.4 0.4 1.2

8 A4 0.12 0.12 2.3

9 A5 0.12 0.12 2.3

10 A6 0.6 0.6 1.2

11 A7 1 1 0

12 A8 1 1 0

13 A9 1 1 0

Table 13: Uncertain activity durations network: overall expected criticalities and total slack for each activity


BRUCE POLLACK-JOHNSON earned a BA in sociology with a minor in education from Brandeis University,an MA in Applied Mathematics from Temple University, and an MS and PhD in Operations Research fromthe University of Pennsylvania. He has taught at Oberlin College, and is currently an Associate Professorof Mathematical Sciences at Villanova University. He has published dozens of papers on project man-agement, forecasting, educational modeling, and on teaching applied mathematics, as well as a two-vol-ume text on business calculus and finite mathematics (partially funded by grants from FIPSE, NSF, andPrentice Hall). His current research is on modeling uncertainty in project scheduling. He is a member ofINFORMS and MAA.

MATTHEW J. LIBERATORE, PhD, is the John F. Connelly Chair in Management and Professor of Decision andInformation Technologies at Villanova University. He previously served as Chair of the Department ofManagement and as Associate Dean. Dr. Liberatore has published over sixty journal articles in the fieldsof project management, management science, information systems, and research and engineering man-agement. He recently co-authored a text, Decision Technology: Modeling, Software, and Applications,published by Wiley. Dr. Liberatore serves on the editorial boards of the American Journal of Mathematicaland Management Sciences and IEEE Transactions on Engineering Management. He is a member of PMI,INFORMS, and the Decision Sciences Institute.

Pritsker, A. A. B., & Happ, W. W.(1966). GERT: Graphical evaluationand review technique — part 1.Fundamentals. Journal of IndustrialEngineering, 17, 267-274.

Pritsker, A. A. B., & O’Reilly, J. J.(1999). Simulation with Visual SLAM andAweSim, New York: John Wiley & Sons.

Project Management Institute.(2000). A guide to the project manage-

ment body of knowledge (PMBOK®guide). Newtown Square, PA: Author.

Project Management Institute.(1999). Project management softwaresurvey. Newtown Square, PA: Author.

Wiest, J. D., & Levy, F. K. (1977). Amanagement guide to PERT/CPM withGERT/PDM/DCPM and other networks(2nd ed.). Englewood Cliffs, NJ:Prentice-Hall.

1 For details about any of theMicrosoft Project or Excel calculationsperformed in this article, please con-tact the authors.

2 These could also be madedependent using the proposedapproach, as the third exampledemonstrates.

March 2005 Project Management Journal • 27March 2005 Project Management Journal • 27

WHY A CRITICAL PATH BY ANY OTHER

NAME WOULD SMELL LESS SWEET?TOWARDS A HOLISTIC APPROACH TO PERT/CPM

ABSTRACTTo maximize the potential of Critical Chain

(CC) to enrich project management prac-

tice, I discuss Eliyahu Goldratt’s work in

the context of his entrepreneurial career. I

show that PERT/CPM had been an

instance of Goldratt’s “Theory of

Constraints” (TOC) before Goldratt had

articulated it. I also highlight errors and

questionable recommendations he made.

Nonetheless, CC provides a more holistic

approach than the typical practice before.

I (1) discuss CC and TOC, including

strengths and weaknesses, in the rele-

vant context; (2) provide earlier sources

for the major so-called Goldratt innova-

tions; (3) identify opportunities for imme-

diate improvement and future research

highlighted by Goldratt’s work.

Keywords: PERT/CPM; Critical Chain;

Theory of Constraints; Project scheduling


Vol. 36, No. 1, 27-36, ISSN 8756-9728/03

“What’s in a name? That which we call a rose by anyother name would smell as sweet.” W. Shakespeare

1. Introduction and Management by Constraints

In 1988, Eliyahu M. Goldratt, already well known for his commercially suc-cessful software Optimized Production Technology (OPT), and already a verysuccessful author (Goldratt & Cox, 1984), articulated what some call a “radi-

cally new” approach to managing the flow of materials in factories: the so-called“Theory of Constraints” (TOC) (Goldratt, 1988). In this paper, we’ll use a morefitting term: “Management by Constraints” (MBC) (Ronen & Starr, 1990), sinceTOC is not an actual theory. MBC replaced a former articulation of Goldratt forthe same purpose, which had essentially summarized just-in-time (JIT) princi-ples, but with an additional wrinkle that suggested focusing on the bottleneck(BN) resource—which, under JIT, is partly implicit and partly redundant. MBC,which had emphasized the focusing aspect, could no longer be dismissed as acopy of JIT. At the time, many U.S. managers were keen to adopt JIT benefits, butsome of them were less keen to admit the Japanese could teach the U.S. anything.Consequently, Goldratt’s contribution was greeted enthusiastically as radicallynew and better than JIT. Later, utilizing the more general aspect of MBC, it wastouted as the correct approach to the management of everything under the sun. Itis based on six steps (Ronen & Starr, 1990), with the first one, which we denoteby the index 0, absent in the original:0. Select an objective function and decide how to measure it.1. Identify the binding constraints that limit our ability to improve the objective

function2. Manage the binding constraints to improve the objective function maximally. (I

am not quoting Goldratt verbatim. His version was “Decide how to exploit theconstraint,” but I assume he had not intended to restrict this to planning only.)

3. Subordinate everything else to the needs of the binding constraints.4. Improve the binding constraints.5. Return to Step 1, since the binding constraints may have changed after Step 4.

MBC enjoyed a tremendously favorable reception by practitioners. Manyfelt—perhaps with good reason—that no academic had ever explained these prin-ciples so clearly and succinctly. As for academics, some of them joined in, and the

DAN TRIETSCH, ISOM Department, University of Auckland, Old Choral Hall,

7 Symonds Street, Auckland


ideas—usually with full credit given to Goldratt—foundtheir way into many Production & Operations Management(POM) texts, and certainly influenced academic teachingand research. There is no denying that Goldratt is bright andhas a genius for selling ideas. Also, although MBC and ear-lier teachings mainly involve packaging of old ideas, it is cer-tainly a clever packaging. Nonetheless, others felt that therewas nothing essentially new in MBC and that much of it istoo simplistic or wrong. The fact that Goldratt had madeunfounded claims of optimality with respect to the OPTsoftware long before articulating MBC may have contributedto this negative reception. OPT did not deliver everything itwas supposed to deliver. By chance, I know of an examplewhere top management bought the product but the sched-ules it generated were never actually used on the shop floor.Top management was not informed of this, and it was ulti-mately revealed when they tried to force it upon a companythey eventually acquired. In other words, the software wasused as a regular material requirements planning (MRP) sys-tem. Possibly, other implementations that were reported assuccesses never involved the use of the OPT module itself(although that was the central module used to promote thepackage). Another client, MARS, won a court battle againstCreative Output (CO), Goldratt’s company (of which he hassince divested himself). The judge set precedence by order-ing CO to reveal the source code to MARS, so they couldcomplete their proof that the package could not deliverwhat was promised (Wilkins, 1984). Eventually, Goldrattstopped making optimality claims with respect to OPT.Goldratt (1988) points out weaknesses of OPT and, indeed,his subsequent software package—DISASTER™—is very dif-ferent (Simons & Simpson, 1997). Pinedo (1997), inter alia,comments on the success of the OPT package in the mar-ketplace. Furthermore, careful study suggests that Goldratt’steachings are indeed too simplistic and not always correct(as I discuss in more detail later).

Since both Goldratt’s supporters and opponents havevalid arguments, one might expect a consensus to emergewith respect to the correct ideas and the system that con-nects them. Nevertheless, this has not yet happened. Thereare myriad academic papers that treat Goldratt as an “aca-demic giant,” and seek a good foothold on his shoulders.This does not mean, however, that academia as a wholeadmires Goldratt. Understandably, detractors rarely men-tion Goldratt in writing (and their point of view is usuallyonly expressed verbally), but the existence of this point ofview cannot be denied. Last, but not least, papers that seekto study the good and the bad together—exactly what weneed! —are rare. Refreshing exceptions are Herroelen andLeus (2001), which is also a rich source of illuminating ref-erences (some of which are repeated in this paper);Herroelen, Leus, and Demeulemeester (2002); and Raz,Barnes and Dvir (2003). Also, Erenguc, Tirupati andWoodruff (1997) edited a special issue on capacity-con-strained planning and scheduling, most of which is devotedto a balanced discussion of Goldratt’s contribution to sched-uling software, including commentary from leading aca-

demics. McKay and Morton’s 1998 review of Goldratt’sbook, Critical Chain, is another balanced source.

Why is the balanced approach the exception and notthe rule? Arguably, the reason is that Goldratt’s personalityinfluences the academic debate. Thus, even Goldratt’s truecontributions are denied or ignored by some of his detrac-tors, while many supporters refuse to admit that Goldratt’steachings are often misleading or erroneous. This state ofaffairs is not conducive to the proper discovery and evolu-tion of the academic truth. Personally, I believe that a nec-essary condition to get out of this quagmire is to “call aspade a spade” and discuss Goldratt’s work without pre-tending that the discussion is totally separated from his per-sonality. (I apologize for using the first person singularwhile doing so, but the alternative is awkward—the paperreflects my personal take of the “Goldratt phenomenon”and much of the “evidence” is from my personal experi-ence.) Another purpose is to list some of the relevant sourcesthat precede Goldratt. Evidently, Goldratt had made a deci-sion not to provide this academic service himself (and sincehe is not an academic, but an entrepreneur, why shouldhe?). I hope that this list will help those of us who do notwish to be labeled as “Goldratt disciples” teach and researchthe issues as any other academic issue, without feeling obli-gated to pay undue homage to him.

Perhaps the most glaring case of misplaced credit isrevealed by Goldratt’s venture into the field of project man-agement. Wittingly or unwittingly, Goldratt had used oldand well-known lessons from the project management fieldto develop MBC. A few years later, he turned around and re-applied them to projects, but, instead of saying so, he effec-tively claimed that he was applying MBC to projects for thefirst time! Section 2 is devoted to this issue, and demon-strates that the combination of project evaluation & reviewtechnique and the critical path method (PERT/CPM orCPM, in short) had always been an instance of MBC. (Forconvenience, however, I will reserve the term “MBC” for themanufacturing environment.) Section 3 asks some theoreti-cal questions associated with MBC. It is interesting to see thatthey are not problematic in the project environment (whichraises the question to what extent it has been appropriate toadapt CPM to MBC so faithfully). Section 4 lists some aca-demic sources for the main so-called “innovations” inCritical Chain (CC), and discusses Soviet roots of the pivotalMBC focusing idea. Section 5 discusses the practical state ofthe art that gave Goldratt the opportunity to sell CC as some-thing different from CPM. Nonetheless, Goldratt’s work can(and should) be a basis for major improvements in projectmanagement practice. Section 6 proposes a more holisticapproach to project management, including steps we cantake in the short- and long-term. Section 7 is the conclusion.

2. PERT/CPM as a Seminal MBC Model

Putting focusing aside for a while, it is relatively well knownthat mathematical programming principles and models(e.g., linear programming [LP]) supersede MBC (Ronen &Starr, 1990). For example, the analysis of opportunity costs


and duality theory precedes Goldratt’s observations aboutthe fallacies of traditional accounting and provides a morecorrect view of the value of time lost on various constraints.And the newsboy model provides a better approach tobuffer setting (it may not be necessary to use models forthis, however). The focusing aspect, however, seems to giveMBC an edge that makes it look different. Here, we will seethat this focusing aspect was not invented by Goldratt. InSection 4, we discuss Soviet roots for this idea that go backto the early communist era, but it also has a very directWestern origin when we think about project management.The complete MBC structure, along with its focusing fea-tures, is well known and has been well known sinceGoldratt’s childhood. It is simply PERT/CPM! The isomor-phism between CPM and MBC is straightforward—to wit,here are the six steps of MBC with project-specific commentsadded, mostly in bold. I restrict the bold statements to whatI remember having been taught as an MBA student in themid-1970s. (I remember the lessons about LP and costaccounting from the same period.)

0. Select an objective function and decide how to measureit. (The objective is to finish the full scope of a projectas soon as possible and within the budget. It is meas-ured by professionals, customers, and calendars.)

1. Identify the binding constraints. (Identify the critical path.This includes the effects of any constrained resources.)

2. Manage the binding constraints. (Focus attention on thecritical path to make sure that no time is wasted there.This includes encouraging and utilizing earliness inany critical activity.)

3. Subordinate everything else to the needs of the bindingconstraints. (The non-critical activities must be startedearly enough to control the risk that these activities willdelay the project. An excessively conservative [but notunusual] implementation of this principle involvesstarting all activities as early as possible. In addition,the critical path can be used to decide what the projectmanager needs to pay attention to personally and whatcan be delegated, which makes it also a rational basis forhierarchical management of projects.)

4. Improve the binding constraints. (Reduce the length ofthe critical path by crashing and other time-saving meth-ods, where expedient, as long as it is cost-effective.)

5. Return to Step 1, since the binding constraints mayhave changed after Step 4. (During crashing, the criti-cal path may change, so crashing involves focusingon the evolving critical path iteratively. Even moreimportant than this planning aspect is the controlaspect. Due to exogenous developments and chanceevents, the critical path may change during the proj-ect execution. Therefore, it is necessary to manage thefuture project activities with a focus on the updatedcritical path. This is equivalent to returning to Step 1.Of course, similar observations about the executionand control aspect apply with respect to flow of mate-rials in a factory.)

Never having met the man, I do not know for surewhether Goldratt was aware of this isomorphism when hearticulated MBC. (Indeed, he may have acted on subcon-scious information.) However, at least to the extent we treathis work as an academic source, he certainly should havebeen aware. Therefore, changing the name “critical path” to“critical chain” is not “a rose by any other name [that] wouldsmell as sweet.”

3. MBC—Some Questions

CPM starts with identifying the critical path; MBC startswith identifying the binding constraint(s) (i.e., the bottle-neck must be known before one can proceed further). Thereis no dispute that focusing on binding constraints is use-ful—it may be obvious, but that’s a different matter.Nonetheless, it is not clear at all that we should start byidentifying them or that we should schedule production bythem. In a factory, a strong case can be made that it isenough to limit the total work in progress (WIP) effectively(Hopp & Spearman, 2001) and avoid large transfer lots(Trietsch & Baker, 1993). The limiting resources may evenshift with time without creating major scheduling problems.The JIT system provides a very well-known example andachieves smooth operations without wasting bottleneckcapacity and without necessarily identifying the bottlenecksexplicitly; in fact, even Goldratt and Fox (1986, pp. 13, 89,95) recognized JIT’s leadership. A related approach is con-stant WIP (CONWIP). Hopp and Spearman (2001) andTrietsch (in press-b) explain, in detail, the advantages ofCONWIP over Goldratt’s drum-buffer-rope (DBR).Essentially, DBR aims to maintain a constant WIP in the sys-tem upstream of the bottleneck resources without attempt-ing to control the WIP downstream from the bottleneck,while CONWIP covers the whole system. If the bottleneck isstable, CONWIP and DBR perform almost equivalently,with perhaps a very small throughput advantage to DBR, atthe cost of increased fluctuations risk. But, since bottlenecksshould never be trusted to be stable, CONWIP has the majoradvantage that it will work equally well with any bottleneck,like JIT.

One additional point: although CONWIP is formallydefined for flow shops, it is straightforward enough toextend to more complex factories. Basically, the idea is sim-ple: Control the total WIP by a tight feedback loop. Do notinduct new work before selling (or scrapping) the sameamount. Over time, adjust the WIP cap to get the best per-formance and to help identify important constraints andimprovement opportunities (as in “exposing the rocks”under JIT).

In a make-to-order environment, the system inductsnew work if there is a queue of orders and the WIP capallows, but, when there is no queue, the total WIP in the fac-tory is decreased automatically. Therefore, the system maybe called CAPWIP—for capacitated WIP. Together with lotstreaming (i.e., using small transfer lots), CAPWIP may beconsidered a special case of JIT.

As under JIT, it is easy to identify persistent or recurrent


bottlenecks under CAPWIP—they are the ones that collectpersistent or recurrent machine queues. Other importantqueues await assembly parts from the bottleneck and werefer to them as assembly queues. (Sometimes, waiting spaceis the bottleneck; in this case, the analysis is slightly morecomplex, but the same situation can happen under DBR,and it is not very difficult to identify the true cause in suchcases.) In conclusion, CAPWIP does not require identifyingthe bottleneck in advance, but does help identify bottle-necks and focus on their improvement. It is also relativelyeasy to implement—certainly easier than DBR, if onlybecause the bottleneck does not have to be identified inadvance.

The CAPWIP idea is obvious to anybody who is famil-iar with DBR, because it can be described as a special case ofDBR, with the market holding the drum. This raises a ques-tion: why didn’t Goldratt choose CAPWIP? As it happens, inthe early 1990s, I consulted for two managers who wereusing CAPWIP routinely, and both of them were GoldrattAssociates. I also had a meeting with a third manager, anavid client of the Goldratt Institute, and he too used CAP-WIP. According to this third manager, by then Goldratt hadadded CAPWIP to DBR—although his books don’t say so.Indeed, one can interpret the following quote from Goldratt(1988, p. 454) in this light: “the OPT BRAIN® contains acrude mechanism to prevent excess build ahead.” Thiswould make perfect sense because, otherwise, the shiftingbottleneck phenomenon can cause uncontrolled WIPbuildup. The two plants managed by these GoldrattAssociates were large machine shops, where CAPWIP is byfar the easiest practical way to control the total WIP. Thethird—in the electronics industry—had more options thatcould have been considered, including DBR, but manage-ment still selected CAPWIP. Why, then, did Goldratt notadopt CAPWIP from the start? Why didn’t he adopt it com-pletely and openly later? From an academic point of view,this decision should have been explicitly made andexplained.

The consulting I had done with the two Goldratt asso-ciates consisted of improving bottleneck capacities (Step 4),by using setup reduction methods and similar improve-ments (Shingo, 1988). Of course, we first had to identify thebottlenecks. The Race (Goldratt & Fox, 1986) explains howto do this as follows:

A capacity constraint manifests itself in all of the majorbusiness issues. An analysis of the major business issues canbe used to identify the capacity constraint resources (CCR’s).(p. 107)

In both cases, however, none of us considered usingGoldratt’s solution, and I doubt we could have done it hadwe wanted to. The organization to which the shops belongis huge and its business issues could not be used to pinpointspecific machines in one job shop. At best, such analysiscould point to the facility to which the shop belonged as anorganizational bottleneck, but that would not solve our

problem. A more localized analysis was not a reasonableoption either because it would still require vast amounts ofreliable data, which was simply not available. Therefore, weselected a less sophisticated approach—observation ofqueues. The idea is well known from JIT, and was alsoendorsed by Goldratt in The Race (Goldratt & Fox, 1986, p.129). An academic validation of this idea is included inLawrence and Buss (1994). This brings us to the issue ofGoldratt’s careful analysis where to place buffers in a facto-ry. The following quote from The Race explains how impor-tant it is to plan protection carefully and proactively:

Concentrate protection not at the origin of disturbance,but before critical operations. Inventory of the right parts inthe right quantities at the right times in front of the rightoperations gives high protection. Inventory everywhere elseis destructive. (p. 113)

Again, the way to identify bottlenecks is through obser-vation of queues, although sometimes they are intangible(e.g., lost orders) or removed from their true source (e.g.,assembly queues or queues ahead of blocked machines thatshould be assigned to downstream resources). It followsthat these queues automatically protect the resources thathave to be protected. There is no need to plan the exact loca-tion of the buffers any more than there is a need to instructthe sun to rise in the east. Again, one must ask what moti-vated Goldratt’s recommendations. Is it an academic issue?A practical issue? Both? None? Should academics endorse it?Should practitioners pay for the required analysis?

4. Critical Chain—How Much is Really New?

To return to CC, Goldratt’s followers and some others, per-haps, believe that there are radical differences between CCand CPM. There are four main points often raised:1) The use of resource constraints instead of resource leveling.2) Abolishing due dates to manage critical (and other indi-

vidual) activities.3) The use of project buffers and feeding buffers.4) The importance of avoiding multi-tasking.

In this section, we will discuss these issues, mostly interms of their origins. In the next section, we’ll discuss themin terms of the “state of the art in teaching and practicingproject management” until the 1990s. The limit of the 1990sis because contemporary, respectable project managementtexts cite Goldratt’s CC as the source of at least one of thevery same ideas we are discussing here. Finally, since this sec-tion is focused on the academic sources of Goldratt’s work, italso includes a brief discussion of what is perhaps the earli-est source of the bottleneck-focusing idea that is so pivotal inMBC. Of course, CPM itself is another such source.

Resource-Constraint Issues in the Academic Literature

Academic publications addressed this issue since the earlystages of the PERT/CPM development. Wiest (1964) identi-fied what he termed “the critical sequence” as a critical paththat takes into account resource dependencies. Good POM


and operations research (OR) texts always stressed the needto consider limited resources and their implications on thecritical path (e.g., Nahmias, 1989). As I already stated, I wastaught this in the early 1970s; I have also taught it this waymany times since the late 1970s. Two sources that just pre-ceded CC are also of interest. First is Morton and Pentico’svery comprehensive 1993 book about scheduling in gener-al, which includes extensive coverage of project schedulingand multi-project scheduling. In the “MBC domain,” theydescribe OPT as an industrial benchmark, but also providebetter sources for bottleneck-related scheduling. Their mod-els for the CC environment precede CC and go way beyondwhat CC has to offer, both for single and multiple projects.Next, Raz and Marshall (1996) discuss the effects of resourceconstraints on project float (slack). It goes without sayingthat if you know the true slack, your critical path will not“jump all over” (Goldratt, 1997, Chapter 22, p. 212)—andin the case of Goldratt’s book, Chapter 22 of Critical Chainwill become moot. Actually, we don’t even need to know thetrue slack to prevent such jumping: just follow the resource-constrained original schedule without factoring in slack(but include “soft” precedence constraints between activitiesthat share a resource, after deciding how to sequence them).As Raz and Marshall (1996) demonstrate, the most popularproject software package, Microsoft Project®, had the capac-ity to do that as a matter of course (they cite Version 3.0, butsuch software capabilities were no longer new in the 1990s).In other words, the state of the art, as reflected by popularsoftware, definitely included this consideration. But it isChapter 22 of Goldratt’s book where the term “CriticalChain” is invented to respond to the “jumping critical path”phenomenon.

Interestingly enough, there is no need to look for earliersources to prove the point. Goldratt himself, in a preemptivebid, provides sufficient evidence. To wit, consider the follow-ing quotes from Chapter 22 (Goldratt’s hero, Rick, a profes-sor teaching a project management course, is narrating):

There are many topics I’ve skipped, but for a very goodreason. They are what some would call academic—resourceoptimization, sequence optimization, investment optimization.I call them irrelevant. (p. 208, emphasis added)

And a bit later:

“Exactly,” I say. “Dependencies between steps can be aresult of a path or a result of a common resource. Why arewe so surprised that both dependencies are involved indetermining the longest chain of dependent steps?” (p. 215)

Indeed, nobody should have been surprised. But, unfor-tunately, Rick had decided not to teach some “academic”and “irrelevant” topics, and thus deprived his students of theopportunity to draw the [trivial] practical and relevant con-clusions. Nor does he hide this truth from his students:

“I don’t know how many articles dealing with resourcesequence optimization I have read,” I tell them. “More than

I care to remember. They contain many algorithms andheuristic rules to sequence resources. […] But I don’t wastemy time reading them anymore. Why? Because in each casethe impact on the lead time of the project is less than evenhalf the project buffer.” (p. 217)

Although it is not clear that the lead-time impact isindeed negligible, Goldratt is not the only one who believesthat some theoretical scheduling models are impractical. Butby including all sequencing rules in the group of redundanttheory (e.g., all heuristics), he implied that the whole issue isnot important. Yet, the need to sequence activities on limit-ed resources is at the core of the critical sequence analysis!

The Abolishment of Due Dates

The second point, abolishing due dates, is perceptive andimportant. Nonetheless, it is not new either. Papers bySchonberger (1981) and Gutierrez and Kouvelis (1991) dis-cussed this as an instance of Parkinson’s Law (i.e., workexpands to fill the time allotted to it), and did so in the contextof project management. Another source is W. EdwardsDeming’s 14 Points (Deming, 1986), although Deming’spoints are generic, and not specifically associated with the proj-ect management area. Deming had preached against the use ofquotas and Management by Objectives (MBO) years before theadvent of MBC, let alone CC. Managing by due dates is aninstance of MBO, and, equivalently, a due date is a quota.

The Source of the Buffers Idea in the Academic Literature

Feeding buffers constitute one of the main innovations inCC relative to conventional CPM implementation. In gener-al, a good project buffer is created when the stakeholdersnegotiate a reasonable and realistic completion date target.For the project manager, this allows minimizing the projectcost, including the expected project delay penalties (e.g.,penalties payable to the customer or other delay-relatedexpenses). For the customers, it helps avoid the damageassociated with overly optimistic expectations, and if delaypenalties are negotiated, then customers are compensatedfor excessive delays (Ronen & Trietsch, 1988). Goldratt’sidea to monitor projects based on buffer penetration is notbad, although it requires corrections, but it is not the mainfunction of the project buffer. Similar monitoring could eas-ily be performed without an explicit project buffer. That is,instead of “buffer penetration,” we would monitor scheduleslippage. (According to Goldratt’s approach, the size of theproject buffer is arbitrary, so his fractional penetration meas-ure is arbitrary too.) The use of a project buffer for its impor-tant protection purposes, however, is well known. Onerelatively early example is discussed by O’Brien (1965),under the name contingency (p. 142). In contrast, feedingbuffers are important because they resolve the questionwhen to start non-critical paths. In general, neither the earlystart policy nor the late start policy provides a correctapproach to this question. Finally, when a project is really asubproject that feeds the critical path of a parent project, theproject buffer is a feeding buffer of the parent project. One


can say that feeding buffers are the general case and projectbuffers are a special case. Even when the project is not a sub-project formally, it always serves some need that can be con-ceived as a parent project. Therefore, the project buffer ismathematically equivalent to a feeding buffer.

Feeding buffers may be important, but did Goldrattinvent them? Ronen and Trietsch (1988) discuss a stronglyrelated problem, and I can personally testify that it was clearto the authors that both project and feeding buffers shouldbe incorporated in project planning. The focus of that paperis the determination of optimal feeding buffers for purchas-ing project items, but it also discusses project buffers andhow to optimize them or negotiate them with customers.(There were two practical reasons for the limitation to thisspecial case: a client needed it, and it is much more tractablethan the general problem.) Kumar (1989), and Chu, Prothand Xie (1993) published essentially identical results forfeeding buffers independently, thus demonstrating that thebasic idea was understood by the professional communitylong before the publication of Critical Chain.

A direct conclusion of such models is that the timebuffers of the various feeding activities should be balancedagainst each other, while taking into account their respectivemarginal costs and their propensity to limit the system,which we refer to as criticality (Elmaghraby, 1977, p. 277).This can be generalized for other buffers (e.g., resourcecapacity buffers should be balanced, too). Such balance maybe viewed as an inescapable consequence of repeatedlyimplementing MBC’s Step 4 without waste, so one mightexpect Goldratt to applaud it. However, Goldratt is vehe-mently opposed to balance! His case against balance isargued in pages 139-141 of Critical Chain, (concluding withthe acronym “QED”), but the proof is based on a flawedassumption amounting to a tautology. Essentially, his argu-ment is that if we wish to keep the bottleneck busy 100% ofthe time, we must have excessive capacity on other resourcesor the bottleneck will idle sometimes. The flaw is in theassumption that we have to keep the bottleneck busy at alltimes. Trietsch (in press-b) shows that correct balanceinvolves matching criticalities with marginal resource costs.When applied to non-bottleneck resources in a system thatallocates 100% of the criticality to a single bottleneck, themodel shows marginal waste approaching 100%! Thus, thisis a very serious mistake that Goldratt has made. Spearman(1997) provides another window into Goldratt’s surprisingstance against balance, and the fact that people often acceptit as true.

Finally, to conclude the discussion about buffers, thereis an analogy between project buffers and bottleneckbuffers, and between feeding buffers and assembly buffers.But there is also a major conceptual difference betweenthem in terms of planning. As we have seen in the MBCarena, it is not necessary to plan individual buffers becauseCAPWIP (or other JIT implementations) will create themautomatically. Instead, the relevant question is how muchWIP we need in the factory to balance lead-time andthroughput objectives. And we can answer the question by

trial and error. In contrast, trial and error is not an option inproject scheduling: all feeding buffers must be planned(which is why they are important). So, ironically, Goldratt’scontribution to buffers was superfluous in MBC and impor-tant (but not original) in CC. However, Goldratt also rec-ommends a bottleneck buffer of project tasks in front ofhighly loaded multi-project [shared] resources: This, again,is superfluous. The buffers will create themselves. All that isrequired is to take the necessary additional queueing timeinto account. However, it is usually not necessary to sched-ule such resources very carefully in advance. Arguably,Goldratt’s own stance about the futility of optimizationapplies to this case.

Avoiding Multi-Tasking

It is easy to demonstrate that multi-tasking can be harm-ful. For example, in Portougal’s 1972 academic paperpublished in the Soviet Union, he showed that multi-tasking is detrimental in terms of all regular performancemeasures, for any project configuration. He assumeddeterministic processing times, where task durations areinversely proportional to the intensity of resources allo-cated to them, and where all resources are interchange-able. He showed that there exists an optimal solution,where each job, once started, should be processed asquickly as possible. That is, we should never re-allocateresources in a manner that will delay the completiontime of a task that had been started already.

Nonetheless, in practice, the idea should be takenwith a grain of salt. First, while an optimal scheduleexists that does not require preemption, this does notmean that preemption may not be required to correctmistakes (i.e., for control). Second, projects are neverdeterministic and resources are never completely inter-changeable. For example, rework can never be scheduledin advance by a deterministic model. Or, suppose a man-ager is in the middle of a very long task, and three proj-ects are waiting for preliminary approval of their plan. Itis likely a good idea to serve them immediately and thenreturn to the long job. (It is difficult to conceive of amanager who can do his/her job properly without multi-tasking.)

Similarly, CPU time-sharing, by completing veryshort jobs very quickly, was quite useful when it was firstintroduced. The explanation is that many programs werestill at the debugging stage where it took the mainframefractions of a second to diagnose them and, thus, pro-vide the programmer with enough feedback to continueworking. Yet, time-sharing is a quintessential example ofmulti-tasking. Goldratt’s philosophy is that if theresource is “the bottleneck,” then wasting capacity of theother resources is immaterial. But Trietsch (in press-b)shows that this philosophy is very wasteful for the sys-tem as a whole. It is wasteful in general, and not just inthis instance. In conclusion, the idea is useful some-times, but much less often than the hype around itseems to suggest.


Back to the USSR—The Source of the Bottleneck Focus Idea

While the main subject of this section is on the points inwhich CC looks different from CPM, it should be noted thatthe credit for Goldratt’s earlier ideas (e.g., the focusing ideaincorporated within MBC) is also misdirected. One reason isthat MBC, including the focusing aspect, is isomorphic toCPM. But it turns out that the focusing idea had also beenarticulated in the manufacturing arena long before MBC, atleast in one industrialized nation: the Soviet Union. Therewere two schools of thought about managing productionthere, one “soft” and one mathematical. The former had pro-moted the idea of focusing on bottlenecks for several decades,starting in the first half of the last century. ConsideringGoldratt’s disdain of mathematical methods (as documentedin this section), one can safely say that this group had basi-cally taught the essential ideas Goldratt promoted with thesame flavor, and did so before Goldratt was even born. Thelatter group picked up on the idea and started publishingmathematical papers about it long before the advent of OPT.For example, Pervozvansky (1975) wrote an extensive bookon mathematical models in production management and dis-cussed this idea in Chapter 7. The book also mentions an ana-lytic solution of a flow shop with a distinct bottleneck, anddiscusses, in particular, the connections between resourceconstraints and the true critical path in projects! In otherwords, the ideas were known in the USSR both with respect tothe MBC environment and the project environment, and theyhad been known years before Pervozvansky published hisbook—it’s just one source that certainly precedes Goldratt’swork. (My source of the information in this sub-section is mycolleague Victor Portougal, an ex-Soviet scheduling expert,and I must say it came as a surprise to me when I first heardabout it while working on this paper. Victor belonged to themathematical school there, and the reference he provided isto one of the books in his personal library. As it happens,when he left the USSR, he only took with him relatively mod-ern books. Thus, there is no reason to assume thatPervozvansky is an especially early reference for this idea, evenwithin the mathematical school.)

5. On the Practical Pre-Critical Chain State of the Art

As we’ve seen, there is little in CC that was not knownbefore, and some of it, including the excuse for the newname, was very well known. Does that mean that Goldrattcontributed nothing new? The answer is a qualified “no.” Inmy opinion, Goldratt (or some unnamed associates of his)made an important contribution: He provided a new pack-age. In it, he packed together items that go well together, butwere marketed separately. Thus, he provided a more holisticapproach than was previously the typical case. (A commer-cial law analogy comes to mind. The first person thatattached erasers to pencils created a very convenient writingtool and can safely be called bright and innovative.Nonetheless, he merely combined well-known parts, andsuch combinations are not patentable. The inventor did notreceive credit either for pencils or for erasers, and earned noroyalties for the combination.) In effect, Goldratt provided

a “one-stop shop” for these ideas, but he also ripped off allthe labels from the merchandise before putting it on theshelves (not to protect the original brands, but, rather, toeffectively re-brand them). This may be convenient for shop-pers, but a far cry from a completely new approach and—from an academic point of view—there is no justificationfor hiding the sources of the items. How, then, did Goldrattconvince so many that it’s much more than merely a newpackage that he has to offer? Quite simply, instead of mak-ing claims with respect to CPM theory, he made [implicit]claims with respect to CPM as practiced by many and as pre-sented by some books. Thus, he implied that typical CPMpractitioners and books (1) do not identify the critical pathcorrectly (by ignoring resource constraints), (2) fail to uti-lize and encourage earliness (by using due dates to manageindividual activities), and (3) use the wrong approach tosubordinate other activities to the needs of the critical path(which is where the feeding buffers come in).

Critical Chain’s hero, Rick, is assigned to teach projectmanagement for the first time in his career. He does not findthe answers he needs in the textbooks the library carries. Hisdisdain for academic papers has been mentioned before, soobviously he cannot use any of those. Therefore, togetherwith his enthusiastic executive students (who liberally pro-vide questions; answers; complete, successful, and instanta-neous field-testing; and, last but not least, consultingopportunities) and with some support from colleagues, Rickproceeds to invent a “new” way to manage projects all with-in a one-semester course. Thus, the book astutely does notclaim to improve upon the collected wisdom found in aca-demic papers and advanced books, but rather, is pittedagainst some project management textbooks of the typeavailable to the hero. Arguably, in a field that had beenestablished about 40 years before the publication of CriticalChain, the viable textbooks should have reflected accumu-lated knowledge in the field, with the potential exclusion ofesoteric material and very new contributions. But was thisreally the case?

Unfortunately, the answer is not entirely affirmative.Recently, I found myself in a similar situation, having toteach a full course in project management for the first timein my career. I was not a complete novice in the subject. Ihad taught CPM as a minor subject in POM and OR cours-es for many years, had worked within projects and projectorganizations, and had co-authored a couple of papers inthe field. For a while, I toyed with the idea of teaching with-out a book altogether, but since I am not an expert in thegeneral management aspects of the subject, I eventuallydecided to use a text. As a result of this experience, while Idid learn many new things about the general managementaspects, I also realized that the lessons I have learned andtaught so often about CPM are not clearly presented in typ-ical books.

Typical textbooks on the subject mention, as a matter ofcourse, that resource leveling may change the length of theproject, but they do not say clearly that the critical path isnot fully identified until after all resource conflicts have


been resolved. A Guide to the Project Management Body ofKnowledge (Project Management Institute, 1996, Ch. 6)—which codifies one official collection of knowledge in thefield—indicates that the critical path is not determined untilafter sequencing is done and, thus, contradicts Goldratt’simplicit claim (Globerson, 2000). Unfortunately, its cover-age of this issue is quite confusing, and Rick could be justi-fied in ignoring it for the purpose of teaching his course. Thecorrect message is better conveyed in OR and POM books(e.g., Nahmias, 1989), but project management texts treatscheduling as a relatively minor issue.

A vicious cycle may be operating here: Scheduling meth-ods, used incorrectly, did not work spectacularly well. Inresponse, teachers (except those whose expertise is specifical-ly in quantitative methods), and some books, stopped stress-ing them. Now they really don’t work well. Perhaps the twomost important reasons for this are management by duedates and not using feeding buffers. (Sequencing is impor-tant, but there is abundant evidence that it was incorporatedinto practice already, although not necessarily optimally.Once we take sequencing into account somehow, there shouldbe no reason to be unhappy with the results. After all, even ifwe miss the optimal solution by a lot, we will not know it!So this is not a likely cause of discontent. Instead, discontentis the result of failure to meet plans, and it is this failure thatmay have given project scheduling a bad reputation.)

Thus, overall, it seems that Goldratt successfully put hisfinger on an issue that OR teachers failed to market—as hehad done before with respect to MBC. Somehow, importantparts of the knowledge (and the intuition) that ORresearchers and practitioners had developed—and pub-lished in academic and other outlets—failed to find its wayto the textbooks we use to teach project management.Ironically, several recent textbook editions mention CC asthe “source” of knowledge that sequencing may be requiredto remove resource contentions! This misses the boat in twoimportant ways: First, as cited before, even Goldratt practi-cally admits he barged through an open door there. So, whygive him credit for it? Second, it misses two important itemsin the CC package: The avoidance of management by duedates and the specification of buffers. As we saw, these arenot original Goldratt ideas either, but they are the oneswhere a strong argument could be made that practice doesnot conform to the recommendation, and the recommen-dation is meritorious.

6. Towards a More Holistic Approach

In general, CC provides a more holistic approach to projectscheduling than the prevalent previous practice, andaddressing the issues as a package is Goldratt’s true contri-bution, for which he and/or his associates deserve credit. Weneed to build on this basis and take a much more holisticapproach to project management in general and to projectscheduling in particular. Examples of a more holisticapproach include (1) addressing existing techniques in thecorrect sequence, such as resolving resource contentionsright after the determination of the initial critical path; (2)

combining resource sequencing and scheduling with sto-chastic analysis; (3) combining crashing techniques withstochastic analysis (i.e., how to crash stochastic activities);(4) setting buffers optimally together with such schedulingand crashing activities; (5) planning buffers for time, capac-ity, cost, and scope in a concerted way by practical, theory-based methods; (6) monitoring buffers correctly (with aproper statistical quality control approach). Most of thesego way beyond what CC has to offer, but the renewed debateCC caused may help bring this about. In this section, we dis-cuss some of these issues.

What Should be Done Right Now?

The success of CC demonstrates that we can achieve imme-diate benefit by some relatively simple steps. We should notadopt the CC recommendations without scrutiny, however,since they include errors. Goldratt’s generic answer to suchcriticism is “it works” (see Cabanis-Brewin, 1999). But evenif we stipulate that it does work, this just means that theerrors are not fatal, not that they should be sanctioned. Thefact is that Goldratt’s work requires both minor and majorcorrections. The minor corrections are easy to implementwith the tools we currently have and, therefore, we shouldbegin pursuing them at once. (From an academic point ofview, this means we should start teaching them right now.)A reasonable sequence for scheduling projects that buildson the CC approach using existing tools would include thefollowing seven steps:

1. Estimate durations (by deterministic or stochastic measures andwithout padding) and identify the absolutely essential prece-dence constraints (i.e., do not include any precedence con-straint designed as an implicit resource constraint resolution).

2. Devise the CPM network and identify the initial critical path.3. Identify any resource constraint violations and resolve them

by judicious sequencing rules and/or software. (To preventproblems later, introduce “soft” precedence relationshipsinto the network to enforce the sequencing decisions.)

4. Once a good, feasible plan has been devised, consider crash-ing. (Crashing before sequencing may crash activities thatare not really critical, so crashing must follow sequencing,but the two can then be performed cyclically with eachinfluencing the other.)

5. Set feeding buffers and a project buffer. Emphatically, if afeeding buffer is too small for comfort, do not change thesequence, and do not start a non-critical path before the criti-cal path; instead, start both (or all) as early as possible andincrease the project buffer as necessary. (Boldly ignore anycontrary recommendations from various CC authorities. Todelay the most critical path just because a nearly critical pathdoes not have a large enough feeding buffer implies losingtime with certainty to avoid any risk of losing the same time orless.)

6. Monitor performance based on buffer consumption.(However, Goldratt’s approach here fails to take intoaccount basic statistical process control lessons and,therefore, this part can benefit from further research.)


7. In the old spirit of CPM and MBC (but contrary to Goldratt’srecommendation in CC), update the network (return to Step1) whenever the critical path changes, or if buffer consump-tion is much more or less than expected. Before doing so,release all soft precedent constraints. (However, when thestability of the plan is very important, it is possible to treatsome of these soft constraints as hard ones.)

Potential Future Work

Of course, this is just a start, based on what is easy toachieve relatively quickly. The list does not yet include non-time buffers and their coordination. It also does not speci-fy how to crash stochastic activities and exactly how to setbuffers (for a partial answer, see Trietsch, 2004).

Another open question is how to monitor bufferswithout tampering, based on statistical quality controlprinciples balancing the damage from “Type I and Type IIerrors.” Goldratt’s recommendations for buffer setting andmonitoring are better than nothing, but far from satisfac-tory. The correct estimation of project and activity dura-tions based on historical data, and taking into accountconsistent bias (which varies across projects and intro-duces dependence between task duration estimates), isalso important in this context. Incidentally, the existenceof consistent bias implies that project buffers must bemuch larger than the randomness of individual activitiessuggests. This supports Goldratt’s heuristic of setting thebuffer as a fixed proportion of the chain length when com-pared to the alternative of assuming independent activi-ties. Leach (2000) includes an improvement whereby thebuffer of short chains is relatively larger. Trietsch (in press-a) shows that the correct buffer is approximately given bya positive constant plus a fraction of the project duration.However, both the constant and the fraction should bebased on historical data analysis and on the ratio betweenthe cost of earliness and the project delay penalty. In con-trast, Goldratt ignores the positive constant and uses anarbitrary fraction that is based neither on data nor on rel-ative delay costs.

In general, Steps 3 to 7 highlight areas where moreresearch is required. We have enough basic results to usenow, but we also need more advanced results, since ourpresent ones were derived by the analytic approach and arenot fully satisfactory for the system as a whole. Morton andPentico (1993) and Demeulemeester and Herroelen(2002) provide an excellent start for Step 3, and see alsoTrietsch (2004), but much more needs to be done. Anotherobjective is to include resource capacity level optimizationin the picture. This can fit within the cyclical application ofSteps 3 and 4.

7. Conclusion

Not for the first time, Goldratt’s work led to debate andrethinking (e.g., Herroelen & Leus 2001—where many moresuch references may be found; Maylor, 2001; Raz et al.,2003). Such cause for thought is a good thing. However,while his influence cannot be denied and some of his teach-

ing is brilliant, we should remember that Goldratt is not anacademic, but an entrepreneur (albeit a bright and highlyeducated one). As such, his motivation may be differentfrom that of academics. There is no compelling business rea-son for Goldratt (1) to give credit where it is due, (2) toadhere to the “academic” truth, (3) to discuss issues deeplyand thoroughly, and (4) to make sure that his work can passthe scientific review hurdle that academic publicationsmust. All this is fine as far as business is concerned.However, these issues are important to consider when wecite and evaluate Goldratt’s work as a source of academicknowledge. A critical approach is mandatory here.

Since practically all of Goldratt’s work had not been ref-ereed, every academic who cites him should first imaginethat he/she is required to evaluate Goldratt’s work, as woulda referee. As for those who may feel unqualified to refereeGoldratt’s work, they should be even more wary. The widecitation of Goldratt’s work in academic papers is not equiv-alent to a single thorough review of the type that all seriousacademic papers should undergo. (During my teachingcareer, I have seen the then-new edition of one of the mostpopular books in POM quote an erroneous example thatGoldratt had taught one of the authors—a freshly mintedGoldratt Associate. A simple LP check would have preventedthat error, but Goldratt scorns LP. Evidently, the authors didnot check Goldratt’s work with care. So, perhaps he couldhave cleared the peer review hurdle after all. Be that as itmay, I tried to provide some of the “flavor” of such a reviewin this paper. After all, it is just one in a long series of paperswritten by academics who cite Goldratt.)

To counterbalance the criticism, however, we must notethat CC—although identical to the old spirit of PERT/CPM—provides a fresh opportunity for improvement by a renewedholistic approach to project planning and execution. Thepaper lists some steps that can be taken almost immediate-ly—such as changing the sequence in which we teach projectscheduling models. It also discusses potential futureenhancements based on studying project-scheduling issuesin relevant combinations, rather than in isolation. Both prac-titioners and academics have a role in making this happen.

References

Cabanis-Brewin, J., (1999). Debate over CCPM gets a ver-bal shrug from TOC guru Goldratt. PM Network, 13(December), 49-52.

Chu, C., Proth, J.-M., & Xie, X. (1993). Supply manage-ment in assembly systems. Naval Research Logistics, 40, 933-949.

Demeulemeester, E.L. & Herroelen, W.S. (2002). ProjectScheduling: A Research Handbook.Boston: Kluwer Academic Publishers.

Deming, W.E. (1986). Out of the crisis. Cambridge,MA: MIT Press.

Elmaghraby, S.E. (1977). Activity networks: Project plan-ning and control by network models. New York: Wiley.

Erenguc, S., Tirupati, D., & Woodruff, D. (1997).Introduction to special issue on capacity constrained plan-ning and scheduling. Production and Operations Management,6(1), 1-2.


Globerson, S. (2000). PMBOK and the critical chain. PMNetwork, 14(5), 63-66.

Goldratt, E.M. (1988). Computerized shop floor schedul-ing. International Journal of Production Research, 26(3), 443-455.

Goldratt, E.M. (1997). Critical chain. Great Barrington, MA:North River Press.

Goldratt, E.M., & Cox, J. (1984). The goal. Croton-on-Hudson, NY: North River Press.

Goldratt, E.M., & Fox, R.E. (1986). The Race. Croton-on-Hudson, NY: North River Press.

Gutierrez, G.J., & Kouvelis, P. (1991). Parkinson’s law andits implications for project management. Management Science,37, 990-1001.

Herroelen, W., & Leus, R. (2001). On the merits and pitfallsof critical chain scheduling. Journal of Operations Management,19, 559-577.

Herroelen, W., Leus, R., & Demeulemeester, E. (2002).Critical chain project scheduling: Do not oversimplify. ProjectManagement, 33(4), 48-60.

Hopp, W.J., & Spearman, M.L. (2001). Factory physics. (2nded.). Boston: Irwin.

Kumar, A. (1989). Component inventory costs in an assem-bly problem with uncertain supplier lead-times. IIE Transactions,21(2), 112-121.

Lawrence, S.R., & Buss, A.H. (1994). Shifting productionbottlenecks: Causes, cures, and conundrums. Production andOperations Management, 3(1), 21-37.

Leach, L.P. (2000). Critical chain project management.Boston: Artech House.

Maylor, H. (2001). Beyond the Gantt chart: Projectmanagement moving on. European Management Journal,19(1), 92-100.

McKay, K.N. & Morton, T.E. (1998). Critical chain. IIETransactions, 30(8), 759-62.

Morton, T.E. & Pentico, D.W. (1993). Heuristic schedulingsystems with applications to production systems and project manage-ment. New York: Wiley.

Nahmias, S. (1989). Operations analysis. Boston: Irwin.O’Brien, J.J. (1965). CPM in construction management:

Scheduling by the critical path method. New York: McGraw-Hill.Project Management Institute (1996). A guide to the project

management body of knowledge (PMBOK® Guide). NewtownSquare, PA: Author.

Pervozvansky, A.A. (1975). Mathematical models in produc-tion management (Russian). Moscow: Nauka. [See pp. 451-452and Section 7.7.]

Pinedo, M. (1997). Commentary on “an exposition of mul-tiple constraint scheduling as implemented in the goal system”.

Production and Operations Management, 6(1), 25-27.Portougal, V.M. (1972). Constrained resource intensity

allocation to tasks in project planning (Russian). Ekonomika iMathematicheskie Metody, 9(5), 761-763.

Raz, T., Barnes, R., & Dvir, D. (2003). A critical look at criti-cal chain project management. Project Management Journal,34(4), 24-32.

Raz, T., & Marshall, R. (1996). Effect of resource constraintson float calculations in project networks. International Journal ofProject Management, 14(4), 241-248.

Ronen, B., & Starr, M.K. (1990). Synchronized manufactur-ing as in OPT: From practice to theory. Computers and IndustrialEngineering, 18(8), 585-600.

Ronen, B. & Trietsch, D. (1988). A decision support systemfor purchasing management of large projects. OperationsResearch, 36(6), 882-890.

Schonberger, R.J. (1981). Why projects are “always” late: Arationale based on manual simulation of a PERT/CPM network.Interfaces, 11(5), 66-70.

Shingo, S. (1988). Non-stock production: The Shingo system forcontinuous improvement. Stamford, CT: Productivity Press.

Simons, J.V., & Simpson, W.P., III. (1997). An exposition ofmultiple constraint scheduling as implemented in the goal sys-tem (formerly DISASTER™). Production and OperationsManagement, 6(1), 3-22.

Spearman, M.L. (1997). On the theory of constraints andthe goal system. Production and Operations Management, 6(1),28-33.

Trietsch, D. (2004). Stochastic economic balance principlesfor project planning: Feeding buffers, crashing and sequencing.Proceedings of the ORSNZ Conference, The University ofAuckland, November 27-29, 35-44. http://staff.business.auck-land.ac.nz/staffpages/dtriets/Rose.htm

Trietsch, D. (in press-a). The effect of systemic errors onoptimal project buffers. International Journal of ProjectManagement. http://staff.business.auckland.ac.nz/staffpages/dtriets/Rose.htm

Trietsch, D. (in press-b). From management by constraints(MBC) to management by criticalities (MBC II). HumanSystems Management. http://staff.business.auckland.ac.nz/staffpages/dtriets/Rose.htm

Trietsch, D., & Baker, K.R. (1993). Basic techniques for lotstreaming. Operations Research, 41(6), 1065-1076.

Wiest, J.D. (1964). Some properties of schedules for largeprojects with limited resources. Operations Research, 12, 395-418.

Wilkins, B. (1984). Judge orders software firm to hand oversource code. Computerworld, July 9, 2.

DAN TRIETSCH is Associate Professor of Operations Management at Auckland University. Previously, he taught at Tel Aviv University,

Northwestern (Kellogg), Naval Postgraduate School (NPGS), and (as Professor of IE) at American University of Armenia. He holds a

BSME from the Technion—Israel Institute of Technology, MBA (Cum Laude; specialization in OR) and PhD (Summa Cum Laude;

specialization in transportation) from Tel Aviv University. Before his postgraduate studies, he had worked as an irrigation engineer

on large projects. As a faculty member at NPGS, he acted as an internal consultant at several repair depots in the US Navy (large

project organizations), combining IE and TQ methods with MBC to achieve focused improvements. Later, he was involved in

industrial improvement projects in Armenia. His main publications appeared in Transportation Science, Transportation Research,SIAM Journal of Applied Mathematics, NETWORKS, Operations Research, European Journal of Operational Research, Journal of theSociety of Operational Research, IIE Transactions, Journal of Quality Technology, and Quality Engineering. He is also the author of

a book on statistical quality control (published by World Scientific).


IDENTIFYING THE CONTEXTUAL ELEMENTS OF

PROJECT MANAGEMENT WITHIN ORGANIZATIONS

AND THEIR IMPACT ON PROJECT SUCCESS

MARK IVES, Consultant, Terra Firma Pty. Ltd., Ground Floor,

199 Toorak Road, South Yarra, Victoria, Australia 3141

ABSTRACT

Change within organizations is becom-

ing the rule rather than the exception as

businesses seek to respond to an

increasingly fluid, complex, and global

business environment. This drive

demands that organizations embrace a

more strategic response to avoid being

leap-frogged by more nimble competi-

tors. As Cicmil points out (1997, 1999),

strategic organizational change is most

likely facilitated and managed through

an organization’s use of the project man-

agement disciplines.

This study attempts to develop a greater

understanding of the contextual aspects

of project management in an organiza-

tional change setting. In reviewing the

current literature, I have found an

increasing use of project management

within organizations and an attendant

poor rate of success among these proj-

ects; interestingly, I also found only lim-

ited research on the context and fit of

projects within organizations. I have

addressed this void with an essentially

exploratory research project that utilizes

inductive strategy. The process I have

used is qualitative and based on in-

depth interviews with four people.

Keywords: project management; CPM;

time/cost trade-off problem; business

games


Vol. 36, No. 1, 51-50, ISSN 8756-9728/03

Literature Review

Project Management Definition and Brief HistoryProject management may be defined as:

“The application of knowledge, skills, tools, and techniques to project activitiesto meet project requirements.” (Project Management Institute [PMI], 2000, p. 6).A project may be defined as:

“A temporary endeavor undertaken to create a unique product or service.Temporary means that every project has a definite beginning and a definite end.Unique means that the product or service is different in some distinguishing wayfrom all other products or services” (PMI, 2000, p. 4).

While many variations for defining projects and project management exist,most only incorporate or imply a focus on the uniqueness of the endeavor andthe imposed constraints of time, cost, and performance (to scope and/or quality).

The earliest examples of projects are great engineering and construction feats,such as the pyramids of Egypt and the great cathedrals of Europe (Keeling, 2000).As project management evolved, practitioners was seen that their discipline waslimited to specific uses in highly technical or scientific applications within spe-cific industries, such as construction, engineering, and defense (Cicmil, 1997).Formal project management, as we now know it, developed during the 1950s and1960s through the large and costly United States (U.S.) Defense Department con-tacts such as the Polaris missile and submarine programs and the NationalAeronautics and Space Administration (NASA) Apollo space program (Hebert,2002; Loo, 1996).

Today, we find that the concepts of ”project” and ”project management” arenow almost ubiquitous, although the context and application of these conceptsvary dramatically. The size, scope, and duration —as well as the complexity—ofprojects can vary from a small, personal project of a single day’s duration to acomplex, organization-wide transformational project spanning multiple yearsand requiring hundreds, or even thousands, of people. Within this broad spec-trum of possible project types, my research project focuses on the specific appli-cation of project management within an organizational setting, which I willdefine as an organizational change project.

During my research, I have found that researchers do not agree on a defini-tion for an organizational change project. Kuruppuarachchi, Mandal, and Smith(2002) argue that because information technology (IT) is so central to modern


organizations, implementation of large IT projects is syn-onymous with the management of change within organiza-tions. This means that an organization’s IT projects areusually part of wider business reforms involving businesssystems, organizational structure, and people. In these cases,customer acceptance—rather than technical sophistication,timeliness, or budget—more often determines project suc-cess. Complex IT projects that focus only on IT developmentmay exhibit characteristics closer to those of concurrentengineering projects (Kuruppuarachchi et al., 2002). Withthis, Gooch (1997) recognizes that IT projects exist within awider organizational or business context and serve businessas well as IT objectives. Cicmil (1999) identifies four distinctcategories of projects:

1. Engineering.2. New product development.3. Systems development.4. Organizational change projects.

However, these broad categories can incorporate wide-ranging differences, in terms of the level of ambiguity andcomplexity; as a result, practitioners and researchers shouldsuggest different issues and approaches for the effective man-agement of projects within these categories. New productdevelopment may involve a largely repeatable process.Cicmil (2000) argues that management in an organizationalchange setting is very different from one operating in a proj-ect setting, such as on a construction or engineering project;this difference has implications for the competenciesrequired. Because organization change projects deal so muchwith human dynamics, Cicmil suggests culture and organi-zational behavior should be considered a design element.

For the purposes of this research project, and my broaddefinition of an organizational change project, I will focuson complex projects in organizational setting that have anexpectation of a significant IT component. In the literature,my area of focus may also be known as an IT project, a sys-tems project, a transformational project, or a businesschange project.

The Organizational Change EnvironmentAccording to Heracleous (2000), the end of stability andconvention in all business sectors is perhaps inevitable,given that global trends are impacting all aspects of societyand business. The growing world population, where theaverage age and mobility of the population is rising, alongwith the emergence of a global economy facilitated by tech-nological advances in communications and transport, aredriving fundamental changes to the basis of competitiveadvantage and unpredictability of world markets.

Within organizations, Thompson and Richardson(1996) argue that organizational systems have become moreopen, complex, and political. This creates a greater level ofuncertainty and contributes to an unstable and changingproject environment. This high level of uncertainty andchange challenges traditional step-by-step approaches to

strategy formulation (Feuer, Chaharbahi, & Wargin, 1995).However, as important as strategy formulation is, the suc-cessful implementation of strategy is of equal importance.Lloyd-Walker and Cheung (1999) quote Forster and Brown(1996) in saying that “implementation is as essential tostrategy as decision making … it is strategy’s Achilles’ heel.”Cicmil (1999) refers to Cleland (1995), who argues thatstrategic change will be increasingly implemented by astream of projects.

However, this increasing expectation of strategy, andthe fluidity of the business environment, leads to anincongruence with the constraints of a traditionalapproach to projects; this causes conflict between twoextremes. Some projects fix set plans and expectations ina changing environment (“blue sky,” strategic visions callfor greater change), which often lead to large gapsbetween the strategic—the ”what” describing the desiredstate and the ”how” describing the methods throughwhich these changes will occur. Often, projects are nar-rowed down too quickly into a closed system that doesnot recognize the world’s current changing business envi-ronment (Cicmil, 1997, 1999). Cicmil (2000) sees aninherent paradox between expectations and project goals,and constraints and the balancing of agendas betweenvarious stakeholders.

Changing the way the world does business is challeng-ing. Many managers and employees alike have experiencedthe attendant struggles, successes, failures, and frustrationsof working through projects (Reichers, Wanous, & Austin1997). When change efforts fail, the cost is often high.Heracleous (2000) notes that, besides the initial wastedeffort and money, there are also longer-term impacts on theorganization through employees’ lower morale, diminishedtrust in senior management, and cynicism that makes futurechange initiatives harder to achieve.

According to Berggren, Soderlund, and Anderson(2001), the fragmentation of organizations is impacting theproject environment. In the past, the project team tradition-ally consisted of a simple dyadic structure involving a cus-tomer and supplier; the involvement of an external projectconsultant, however, changes the structural dynamic of thisrelationship:

• Coordination – managing communications and con-trolling costs associated with an intermediary managementlevel.

• Delegated responsibilities – the “absent customer”often creates risks involving the loss of real customer oppor-tunities during the decision-making process and via trade-offs throughout the project.

• Organizational learning – ensuring that externalconsultants communicate their project learning to theorganization.

While this study primarily focused on large engineeringprojects, these contextual issues have application to organi-zational change projects where external project consultantsare involved.


The Success Rate of ProjectsAs previously discussed, IT within an organization is oftennot a stand-alone unit. Many projects that are incorrectlylabeled as systems projects fail because of the leadership’sfailure to recognize the relationship of the system within thewhole organization (Collyer, 2000). While some projectsmay be deemed IT or systems projects, such projectsinevitably impact more users and members of the organiza-tion than just IT. In this way, these projects may be deemedan organization change project. A common reason put for-ward, according to Cannon (1994), as to why projects fail isthat the project’s size and impact are often of a greater mag-nitude than those previously completed by the projectteam’s individual members.

According to Collyer (2000), over 75% of all businesstransformation projects fail. He cites two of the main rea-sons as a lack of internal communications and the projectteam’s failure to recognize the impact of the change projecton the business as a whole. In his study of a major changeat Guinness PLC, Collyer noted that the differences betweena business change and a systems implementation quicklybecame apparent.

Peled (2000) describes the state of large informationtechnology projects as abysmal, referring to studies byArgarwal and Meyer, which found that only 16% of U.S. ITprojects were completed on time and on budget. TheStandish Group (1999) reports that U.S. corporations spend$275 billion each year on approximately 200,000 IT applica-tion development projects. From research over five years,they found, in 1998, that 28% of these IT projects failed, andof these, 46% were “challenged,” which they defined as beingcompleted but over budget, late and with fewer features thananticipated. Only 26% were considered successful.

Cicmil (1999) acknowledges the overall poor rate ofsuccess of organizational change projects, but argues thatthe project form provides an effective way of transformingchange initiatives into a focused, interactive, and integrativeintervention, with measurable outcomes and a traceablelearning process.

The Universality of Project ManagementThere now exists an emerging body of literature that identi-fies project management as a powerful, generic managementapproach with broad application beyond projects (Hebert,2002; Laszlo, 1999; Pinto & Rouhiainen, 2001;).Increasingly, this literature is referring to management byproject, the project organization, project-based businesses,and temporary project organization. Cicmil (1997) arguesthat projects are now templates for operational and strategicredesign.

Randolph and Posner (1992) recognize that the way wemanage work in organizations has fundamentally changed.More and more, work is performed across functional lines ofauthority and “more than ever, successful managers are proj-ect managers” (p. 2). Loo (1996) recognizes that projectmanagement is a powerful new management approach,because projects:

• Focus on results;• Require effective leadership to enable the project team the

opportunity to achieve goals successfully;• Provide a single point of management contact, among

other factors;• Foster a synergistic atmosphere by bringing together a

multi-disciplinary team focused on achieving a commongoal within a specific timeframe and within specificresource constraints;

• Promote strong team-building opportunities for individ-ual growth and development within the team;

• Encourage a cooperative team effort towards accomplish-ing a common goal and convey the idea that project teamssucceed and fail as a team.

Although the role of a project manager has many simi-larities to the role of those in general management, projectmanagers, because of the short duration of a project, mustpossess the ability to meet special application, discipline,and technique requirements that project work demands(Keeling, 2000). According to the Project ManagementInstitute (2000), the practice of project management over-laps and modifies aspects of general management disci-plines for the specific needs of each project.

Homes (2001) suggests that the role of today’s managerfocuses more on the project and the team than in the past.But managers are often tempted, because of pressure fromsenior managers, to dive straight into the implementationprocess to produce tangible results. Before doing this, how-ever, managers should establish a solid foundation forchange. Webster (1999) recognizes that projects are quitedifferent from the operational activities senior managersdirect and that non-project management professionals areunaccustomed to working in business activities that have awell-defined start and end date. Although starting a projectoff correctly is critical for project managers to gain a veryclear understanding of what their task requires, managersare often reluctant to seek the clarification they need to per-form their responsibilities.

Webster (1999) notes that today’s organizations, withtheir scaled-back structures and scarce resources, are increas-ingly recognizing that project management can provide theflexibility and focus needed to deliver the business resultsdesired. Additionally, although many managers may notrealize that they are performing in a project manager role,they often structure their work around a specific result with-in defined time, cost, and quality parameters (Webster,1994). Hebert (2002) takes this further by suggesting thatthe practice of project management offers managers a farmore flexible, strategic, and effective type of managementsystem and is in fact, a normal management process forachieving goals within traditional management structures.Laszlo (1999) says the field of project management repre-sents a universal management tool that can be applied to fitany set of organizational activities.

The power and flexibility of project management prac-tices as a generic management approach can also be seen in


the development of organizational learning research.Cavaleri and Fearon (2000) propose that project manage-ment systems, because of these are of a fundamentallyexploratory nature, provide a near perfect vehicle for inte-grating organizational learning into business processes. As aresult, projects undertaken to improve business perform-ance also serve as a manageable way for providing organiza-tional learning opportunities.

A traditional approach to project management involvesa linear, step-wise approach, where the emphasis is on clear-ly defining a much-desired outcome via a detailed plan thatoutlines the milestones that must be accomplished alongthe way towards achieving the stated outcome. A weaknessof this approach involves the assumption that project man-agers can identify and accurately estimate the work that isrequired to realize the outcome before the project begins(Cannon, 1994; Cicmil, 2000). Cicmil (1999) notes that thetraditional view of project management as a monitoring andcontrolling process supervising time, cost, and quality objec-tives has its roots in the engineering field. Historically, engi-neering project managers assumed that the project lifecyclewas universal and would unfold in a logical, linear fashion.Cicmil (1999) argues that during the 1990s, the projectmanagement body of knowledge had been considerablybroadened and adds that today it now encompasses a muchwider range of management issues in an equally wide rangeof industry settings. Cicmil (1999) also points to theemphasis on re-engineering and business process re-engi-neering (BPR) during the 1980s and 1990s that focused onprocesses in a mechanistic way and failed to deliver the busi-ness change expected.

The Role of the Project Manager and Personality CharacteristicsPinto and Rouhiainen (2001), while recognizing the powerand flexibility that project management brings to organiza-tions, point out the constraints and challenges that accom-pany the role of project manager. Project management, theycite, involves a natural propensity for conflict that arisesfrom inherent budget and schedule constraints, the powerand political processes that come into play as projects crossfunctional boundaries, the complexity and interrelatednessof project work, and the learning curve associated with theuniqueness of each project.

Peled (2000) suggests that the technical skills and toolsassociated with project processes will be unlikely to lead toproject success. Rather, success is determined by the projectmanager’s skills in organizational politics, which are oftenthe secret weapon for achieving the desired outcome. Thesepolitical savvy project managers manage upward and out-ward and tailor their technological visions to the day-to-dayreality of their organizations. Gooch (1997) proposes thateffective projects are those that achieve a business changewithin a managed organizational context. These projectscover the entire life cycle, from formulation of strategy toachievement of benefits; such projects are not primarilyabout the successful management of the project process.Therefore, the role of the project manager is broader than

the management of project processes.According to Hebert (2002), the project manager’s role

now involves 50% strategy and understanding of the envi-ronment, 40% management, and only 10% technical appli-cations. In addition, organizational change projects requirecross-organizational structures and senior managers actingas sponsors and leaders of change. The project manager,therefore, must possess the ability to move across bound-aries and hierarchies, inspire confidence, and commandsupport and action where required (Cannon, 1994).

However, despite this demand for a broader organiza-tional focus, Crawford and Cooke-Davies (1999) point outthat project managers often have personality characteristicsthat distinguish them from general managers. These differ-ences present both opportunities and challenges. The recog-nition of these differences is notable in the developmentand sharing of knowledge and in programs for continuouslearning. From their studies, Crawford and Cooke-Davieshave found that project personnel tend to be more task-ori-ented than people-oriented, which means they may notreadily take time to share their knowledge with others. Theyalso found that where knowledge involves a greater degreeof subject mastery, as in the case of project management, agreater degree of finesse is required in applying this knowl-edge and, therefore, it is more challenging to share(Crawford & Cook-Davies, 1999).

Webster (1994), in a study of project management prac-titioners, found that this group displayed a strong preferencefor left-brain processing, which indicates an emphasis fortask-related activities. Webster attributes this finding to acommon background among those studied in the engineer-ing field. In recognizing this left-brain dominance amongproject managers, Webster also found that whenever proj-ects go wrong, increased focus on tasks and tools is unlikelyto lead to a solution. Rather, success is more likely to befound in a whole-brain approach to project management,where the process encourages and embraces a balancebetween task and people orientation.

Trends and OpportunitiesCicmil (1997) argues that project managers will need toreposition project management from a middle manage-ment-focused discipline into a business philosophy in orderto support organizational strategic change. According toHebert (2002), this repositioning can only occur after proj-ect leaders move up the corporate ladder.

As project management evolves beyond the mechanicsof project work, the discipline will less likely be viewed as anarrow, exclusive process focused on achieving highly spe-cific results within defined time, budget, and quality specifi-cations. With this understanding, project management canthen be viewed by senior non-project managers as an open,inclusive process that is applicable to a wide range of busi-ness problems and that recognizes the multiple realities andperspectives within organizations (Cicmil, 2000). To meetthis challenge, Cicmil proposes a project management mul-tiple perspectives framework as a basis for managing proj-


ects within organizations. This incorporates a harmoniousrelationship between project content, project context, andorganizational behavior with the internal project processesand activities that constitute traditional project management.Open communication between the project team and thewider organization ensures changes within the project andupon the project from without are identified, communicat-ed, and managed in a “partnering” approach. However,organizations need to provide new education and trainingapproaches that enable project managers to incorporateunbounded systems thinking throughout the organization toencourage project planning, risk assessment, and informedevaluation of critical areas for success (Cicmil, 2000).

Pinto and Rouhiainen (2001) suggest making projectmanagement more customer focused in order to improvethe practice of this discipline. They argue against measuringprojects via the traditional constraints of time, money, andperformance, which force an internally focused process inwhich only the accomplishment of the intention is meas-ured, and instead propose that true project success is onlyachieved when a fourth measure—customer satisfaction—isaccomplished.

However, one obstacle to achieving project success isthat project managers and their customers are often not talk-ing the same language. A recent study by Thomas, Delisle,Jugdev, and Buckle (2002) into the issues of selling projectmanagement to senior executives found that senior execu-tives lack an understanding about project management’s sig-nificance and its strategic potential in serving seniorexecutives—the “buyers” of project management. Theseexecutives viewed project management as something thatanyone could do when the need arose, typically fixes ashort-term crisis situation, and generally is not applicable tostrategic business development, their main focus of an exec-utive’s attention. The “sellers” of project management, how-ever, either internal practitioners or external projectconsultants, tended to reinforce this misunderstanding byfocusing on the efficiency and effectiveness measures ofproject management as a control mechanism. As a result,Thomas, Delisle, Jugdev, and Buckle found that gaining sup-port for—and garnering investment in—project manage-ment within organizations still remains a tough sell.

To address this topic, Kloppenborg and Opfer (2002)reviewed more than 3,500 articles, journals, and papers todetermine the state of project management research and toidentify key trends. The study tracked the evolution of proj-ect management through the literature and identified thefollowing trends and predictions:

1. Standardization of processes and tools.2. Greater use of Web technologies for enterprise communi-

cation and collaboration.3. Use of generally accepted project management practices

and philosophies required through specific language incontracts.

4. More outsourcing of project management by major com-panies.

5. Increased occurrence of non-traditional projects, such asvolunteers, fund-raising, etc.

6. Evolution of the project manager’s role to demonstratetheir ability as leaders and not just as managers.

7. Movement away from “super projects.”8. Refinement of project scope with focus on business

requirements and measurable benefits.9. Evolution of project selection and prioritization as a key

issue.10. Increased emphasis on formal project management

training and accreditation.11. More emphasis on risk management, in general, and

more opportunities for project managers to receive riskmanagement training.

12. Increased focus on communications and communica-tions planning, particularly stakeholder management.The majority of these points are aimed internally at

project processes, technology, and skills, as opposed to afocus on the fit and context of project management withinorganizations.

Summary of the Literature ReviewThe authors who I have referenced agree on the complexity,uncertainty, and fluidity of the business environment andacknowledge the increasing rate of change within today’sorganization (Cicmil, 1999; Heracleous, 2000; Reichers etal., 1997; Thompson & Richardson, 1996). This agreementis recognized as having a direct impact on projects (Berggrenet al., 2001; Cicmil, 2000). These authors also acknowledgethe poor rate of success among projects studied (Cicmil,1999; Collyer, 2000; Standish Group, 1999), some evengoing as far as to describe the current state of project man-agement as abysmal (Peled, 2000).

However, when this rate is considered in terms of thecauses associated with poor project performance, one seesthat project success, as Crawford and Cooke-Davies (1999)and Webster (1994) point out, is primarily shaped by theproject manager’s personality characteristics or the need forprocesses, tools and techniques (Kloppenborg & Opfer,2002). The role that context plays in determining projectsuccess, however, is limited and under-recognized. Inresponse, Pinto and Rouhiainen (2001) describe a need formore customer-focused projects. Cicmil (2000) goes furtherin proposing a harmonious balance between project con-tent, project context, and organizational behavior withinternal project activities.

In summary, in reviewing the current literature, I havefound a lack of research on the context of projects withinorganizations and its role in determining project success.

Research Project Approach

Introduction to the TopicChange within organizations is becoming the rule ratherthan the exception as businesses seek to respond to anincreasingly fluid, complex, and global business environ-ment. This drive, in turn, demands that organizationsembrace a more strategic response to avoid being leap-


frogged by more nimble competitors. As Cicmil points out(1997, 1999), strategic organizational change is most likelyfacilitated and managed through an organization’s use ofthe project management disciplines (Cicmil, 1997, 1999).

Project management is recognized as a powerful andflexible management approach for implementing strategiesand is proposed by some as the emerging default manage-ment approach (Hebert, 2002; Laszlo, 1999; Pinto &Rouhiainen, 2001). Despite this acclaim, The StandishGroup (1999) state that as many as 75% of all projects failto deliver the expected results.

In response to this gap between the observed results ofproject management and an increasing demand and needfor the successful management of projects, many authorshave focused on internal project skills, tools, processes, andapproaches. My review of the literature, as discussed in theprevious section, shows a lack of research into the contextu-al aspects of project management and its use within organi-zations undergoing change.

Aims and ObjectivesWhat contextual factors must project managers address indefining the role project management plays within organi-zational change? My aim—in this research project—is toanswer this question.

My hope is that this study will provide other researcherswith useful information that will fuel their further study inthis important but neglected area.

Method and Approach My purpose is to develop a greater understanding of thecontextual aspects of project management in an organiza-tional change setting. My literature review revealed anincreasing use of project management within organizationsand an attendant poor rate of success of these projects. Mystudy also showed limited research into the context and fitof projects within organizations. I am using an exploratorymethod in my pursuit of attempting to accomplish myresearch goal. The process I am using is qualitative.

Strauss and Corbin (1998) describe qualitative researchas any type of research that produces findings not arrived atby statistical procedures or other means of quantification.According to Denzin and Lincoln (1998), qualitativeresearch is multi-method in focus and involves an interpre-tive and naturalistic approach to its subject matter. I believethat my use of a qualitative process is appropriate because ofthe richness of the data, and because the research questioninvolves gaining a full understanding of the meaning thatpeople place on issues, situations, and experiences, as suchissues, situations, and experiences relate to the researchquestion. My research strategy is inductive because it isintended to generate a greater understanding of the contex-tual aspects of project management.

Strauss and Corbin (1998) argue that all research andanalysis inevitably involves the interplay between inductionand deduction because the work is performed by humans.In this study, I will induct my theory from my previous lit-

erature review and from my project interviews.

Overview of Approach

Data CollectionI began by collecting data from my literature review andfrom my reflections from my personal experience. Fromthis, I developed a model to guide my in-depth interviewswith the four selected subjects. To gain an industry-wide per-spective, I selected the subjects with project managementexperience as “buyers” of project management –(individualswho have a responsibility for establishing contextual aspectsof projects in their organization) and “sellers” of projectmanagement (individuals who are project practitioners andwho represent leading industry associations).

Research EthicsI conducted all interviews individually, on a one-to-one basis.Each interviewee was initially asked broad and open ques-tions across four areas with the intention that these wouldprovide a vehicle for open, transparent discussion from whichI could obtain knowledge of the interviewee’s project experi-ences. I deliberately chose not to ask questions requiring therevelation of sensitive or confidential information.

Prior to each interview, I provided each intervieweewith a plain-language statement outlining the project objec-tives and approach. This statement also specified all of themeasures I was undertaking to protect their privacy and thesecurity of data provided by the interviewee, including mytape recording of the interview. In all cases, I discussed thesemeasures with the interview subjects and they gave me theirconsent to commence with our interview.

I assured them that I was using the following privacyand security of data measures:

• All interview data will be stored in a locked filing cabinetlocated in the author’s home for a period of seven years.

• The data storage medium includes all formats utilized,including electronic materials handwritten notes, andaudio tape recordings.

• Data captured during interviews will remain private andwill not be made available to the general public nor will itbe sold. It will also not be re-used without the expressprior permission of the interviewee.

• All original data in terms of transcripts and recordings willbe destroyed after a period of seven years.

Therefore, as a result of the broad and non-specificnature of both the topic and the questions that I posed dur-ing the interviews, and the measures I have taken to safe-guard the interests of the interviewees and the data captured,I have assessed and approved this project as “no risk.”

Strengths/Significance of ResearchMy literature review indicates increasing rates of changewithin organizations and an increasing use of project man-agement as a management approach for facilitating change.

This research has implications for project practitioners


familiar with the poor rate of success of past projects andseeking an improved understanding of the successful posi-tioning, structure, and context of project management with-in organizations; such practitioners believe that an improvedunderstanding will lead to improved project success and therealization of business benefits.

My research also has implications for executives who areresponsible for deciding how to use project management asa method for achieving their organization’s strategic objec-tives. These executives may also be responsible for the ongo-ing sponsorship and governance of projects and most likelyhave an interest in knowledge creation that leads toimproved project success and ultimately the realization ofbusiness benefits.

In addition, my research has implications for project

management’s leading industry body, which has an ongoingresponsibility to improve the field’s understanding of projectmanagement issues and opportunities across the industry.

Limitations of this ResearchLimiting my research are the conditions inherent in thesubject matter itself: the context of project managementwithin organizational change and in the method andapproach taken.

By its nature, each project is unique. As this languageindicates, the context of project management is directlyrelated to the specific context of the organization. Onecan reasonably argue that no two organizational contextsfor project management or the projects themselves arethe same.

Initial review and assessment of model

Thematic analysis of recorded data

Draw conclusions and report findings

Literature review Experience-based reflection

Research Question: What contextual factors do project managers need to address in defining the

role of project management in organizational change?

Develop an initial contextual model for project management

Record data

Record data Record data

Record data

Interview 4Interviewscomplete?Interview 3Interview 2Interview 1

NO

YES

Figure 1: Flowchart depiction of research methodology


This argument has ramifications for this research proj-ect and imposes some limitations over the conclusions thatone may draw from my analysis of the data. My findings andrecommendations reflect my analysis of data based on anassessment of the themes identified.

This research project has also been limited by the scopeof its study, available time, and human resources. As a result,my findings and recommendations would benefit from fur-ther, more detailed study by other researchers.

Project TimeframesI began this project in December 2002 and completed it byJune 2003.

Interviews and Analysis of Data

Discussion of Key AssumptionsMy literature review indicates a general lack of recognitionconcerning the impact that contextual factors have on proj-ect success within an organizational change setting.

Prior to starting my interviews, I conducted an initialanalysis. I found that organizational context creates thedemand for changes leading to a project, that the businessenvironment contributes to this demand and reflects theorganizational setting and factors on the project, and thatorganizational capability underpins the ability of the organ-ization to execute the change.

My analysis is reflected in the model below:

The left of the diagram lists some of the main contextu-al elements for projects. The organizational demand for theproject includes internal demands such as the strategicdirection of the organization as well as the often more obvi-

ous demand driven by the promise of financial returns. Theexternal demand for change that projects can deliver is list-ed as the customer demand for new products and services aswell as potential key supplier demands or requests forchanges, in addition to legislative, regulatory, or other man-dated change. From a business environment perspective, thecomplexity and stability of the change environment influ-ences the context of change projects. The environment forchange and its impact on projects is markedly different inorganizations that are highly fluid, unstable, and complex,as compared to businesses that are stable, consistent, andestablished. Similarly, organizations lacking the maturityand capability to support change and the financial andhuman resources needed to put forward projects represent agreater risk in their successfully accomplishing organiza-tional change projects than those businesses that possess thematurity and knowledge to support change. The sum ofthese elements represents the organizational context forestablishing projects within organizations.

One may view an organizational response to this con-text for change along four dimensions:1. The organization’s process for sponsoring projects and

providing organizational governance.2. The scope of the project and the manner in which success is defined.3. The structure of the project in relation to organizational

operations and the authority the project manager hasfrom which to act.

4. The funding and resources that are applied to the project.A key assumption underpinning this model lies in the

way these organizations are structured. The organizationsrepresented in this research project are all described as a

Organizational demand for project Strategic Financial benefit External customer demand and impact External supplier demand and impact Regulatory, legislative, scheme compliance

Business environment Complexity Stability Cultural and political Structural - functional/matrix/hybrid

Organizational capability Project maturity of the organization Organizational knowledge Resourcing and funding capability

Sponsor

Project

Organizational Response

Organizational Context Sponsorship and governance Definition of scope and success Structure and authority Funding and resources

Figure 2: Organizational context model


hybrid of functional hierarchies and matrix-based organi-zations. That is, the main operational view of the organi-zation is along functional lines, such as finance,marketing, human resources, etc. This is represented in thediagram by the vertical, organizational structure view.However, the project view of the organization is likely tobe more horizontal, as projects tend to cut across func-tional lines. My literature review identified a number ofauthors who are recognizing the cross-functional nature ofprojects (Frame, 2002; Hebert, 2002; Pinto & Rouhiainen,2001; Randolph & Posner, 1992).

When an organization initiates and sponsors a newproject, unless the project sponsor is also the chief executiveofficer (CEO), it is likely that the senior manger initiatingand sponsoring the project will occupy a functional role onthe project team. This dynamic is represented in the diagramby the vertical organizational structure view.

The sponsor is, in effect, interpreting the organizationalcontext, which incorporates the demand for the project anddetermines an appropriate organizational response. As aresult, the sponsorship and governance framework is estab-lished for the project: this leads to the definition of the proj-ect scope drawing on the sponsor’s perspective andfunctional position. Organizationally, this is reflected in theway the project is structured, the level of authority devolvedto the project, and the financial and human resources madeavailable to the project.

Once a project manager is assigned, the project assumesa different perspective. By responding to the scope positionestablished at the outset by the sponsor, the project manag-er will, through the project planning process, inevitablylook broadly across the organization—and indeed beyondthe organizational boundaries to determine all of the pro-ject’s impacts and associated work activities. The scope ofwork that the project team will complete is defined by theproject manager, within the limits set by the sponsor,through the establishment of an initial scope position andthrough negotiation when differences arise. In this way, theproject manager is far less constrained by a vertical func-tional perspective of the organization and will necessarilytake a horizontal view across the project context.

The limited life span of projects creates, in effect, a tem-porary project organization, typically matrix based, withinthe wider organizational context. The key link between theproject and the parent organization is through the sponsorand the organizational levers used to guide and control theproject. These levers include:

• Sponsorship and governance;• Scope and success criteria;• Structure and authority;• Funding and resources.

The first three areas have been used to frame thequestions posed during in-depth interviews and an addi-tional question area focusing on partnering as an emerg-ing trend.

Analysis of DataAccording to Strauss and Corbin (1998), analysis is theinterplay between the researcher and the data. In this proj-ect, I analyzed my data through the thematic analysis of theinterview transcripts.

Summary of InterviewsInterviewee (1) currently performs a general managementrole and project sponsor role in a large financial servicesorganization.

In response to the first area of questioning on sponsor-ship and governance models, he pointed to sponsorshipbeing pushed too far down in the organization and the seniormanagement’s resultant inability to maintain accountabilityfor projects. He indicated that in his organization, projectmanagement has not been viewed as a core capability.

In terms of governance structures, interviewee (1) iden-tified two diverse approaches: First, large and bureaucraticcommittees, which are created by rounding up all peoplepossibly impacted by the project, form a committee thatbecomes unwieldy and unable to make decisions. Second,the use of small project “boards” is an approach where onlya core membership of perhaps four members provide thenecessary governance over the project, but bring in other keystakeholders as necessary. In this latter case, the project’simpacts are typically not fully known, and as a result, theproject team cannot fully identify all of the project’s stake-holders and appropriately affected parties. Interviewee (1)described that this approach results in a large amount oftime spent in meetings that are mostly about projects. Hesuggested that some colleagues have spent a significant pro-portion of their week in this role.

The second area of questioning involved defining proj-ect scope and success. Interviewee (1) indicated that the def-inition of scope in his organization has been very poor.Scope is typically defined at too high a level and no one issure exactly what is being delivered until the project getsdown to the design level where the true impacts of the proj-ect are understood. As a result, in the early stages of the proj-ect, definition of success is equally poor and is often toonarrowly defined. Typically, benefits are described simply infinancial terms. Interviewee (1) pointed out that a goodproject manager had a more diverse view of success than thesponsor or the organization does.

When asked about the role of a project manager todevelop and define the scope, and how early in the processshould the project manager be brought in, interviewee (1)saw the value of using the project management disciplines,but from a practical viewpoint, he thought it unlikely thathis organization would make available a spare, suitablyqualified project manager.

The third area of questioning related to the power andauthority that is devolved to project managers. Interviewee(1) indicated that he couldn’t see the situation ever occur-ring where full power is passed on. As an example, he point-ed to the way lending authority is assigned in a bank, whereyou would receive a letter formalizing the specific amounts


and level of control and governance that applies. In hisexperience, projects have tended to operate more on a nodand a wink to get things done. He suggested most organiza-tions would be very cautious about handing over the powerof full budget control to the project manager. In addition,his organization hasn’t had sufficient clarity over strategy tobe able to say “no” to projects, so providing limited controlover budgets is a way of saying “yes” to projects, but withvarying power over time. Projects are implemented byretaining project power and authority with the sponsor onbehalf of the organization; the sponsor shares this powerand authority with the project manager over time.

The final area of questions related to partnering as atrend in project management, moving away from the poten-tially adversarial approach of a supplier-customer relation-ship between the project and the organization. Interviewee(1) supported this trend, confirming that the customer-sup-plier relationship has thrived, and in his experience, it hasusually occurred in technology areas when the businessareas have abdicated their responsibility by setting scope ata high level and then passing the buck to technology todevelop the business solution. This has created an adversar-ial relationship leading to the need to develop a better work-ing relationship between different areas. He saw anincreasing need to formalize roles and responsibilities as away of minimizing conflict and the likelihood of an adver-sarial relationship.

Interviewee (2) performs a leadership role for a largefinancial services organization, heading up the project man-agement office.

As a result of my analysis of the first interview, I askedinterviewee (2) whether, given the cross-functional perspectiveof projects, he thought there could ever be only one projectsponsor. He said that while there may be many stakeholders orcustomer groups, there should only be one sponsor.

Interviewee (2) pointed to the varying level of seniorityamong sponsors within the organization and the resultantimpact on the project. A sponsor who is too senior is often toobusy, inaccessible, and removed from the day-to day issues ofthe project. One who is not senior enough may be more acces-sible and closer to the action, but is unable to exercise suffi-cient influence across the organization. He also discussed atlength the challenge of delineation of responsibilities betweenthe project manager and sponsor. He described the role of thesponsor as one of thought leadership, but with single account-ability for the benefits and the delivery of the project.

When asked about the definition of scope and success,interviewee (2) acknowledged the different perspectives of thesponsor and project manager in defining and clarifying thescope and the natural tensions that arise. Referring back to thequestion regarding the number of project sponsors, he sug-gested more than one sponsor encourages an increasing scope,rather than maintaining a scope position or even reducing itwith just one sponsor.

He also added that the definition of success is deter-mined through the creative tension that exists between thesponsor and project team. Referring to the example of tech-

nology projects, he said that technologists often tend to seekto create an elegant solution that is necessarily at a highercost.

I then asked interviewee (2) about his experience in thedefinition of project scope and success. He indicated that inhis experience, initial definition of scope tends to be fluffyand the organization can spend 40%, 50%, or even 60% ofthe budget on nailing down the scope, which always seemsopen and subject to change.

The third area of my questioning involved the structureand authority of project managers. Interviewee (2) acknowl-edged that limited power and authority is passed to the proj-ect manager, and argued that limiting this individual’spower by putting limits on the funds is quite normal.Interviewee (2) indicated that, in his organization, execu-tives are exploring the creation of project-specific delegatedauthorities to formally authorize spending. He noted, how-ever, that ultimately the sponsor has the real authority.Interviewee (2) also acknowledged that currently, in hisorganization, a low level of confidence among executives intheir project managers is causing them to pull back author-ity to the sponsor.

My final question for interviewee (2) related to theemerging trend of partnering in projects. He responded bysaying that this was just good business practice and goingtoo far may, in getting close to the customer, be as much ofan issue as not going far enough, citing an example from theaviation industry where an organization became so close toa single customer it lost sight of the broader market.

Interviewee (3) occupies the role of director of consult-ing in a medium-sized professional services firm that spe-cializes in project management.

When asked about his experience in the governance andsponsorship of projects, interviewee (3) indicated that whilethis responsibility is vitally important, it is amazing howoften organizations are unclear about who the sponsor real-ly is, or the sponsor changes or moves halfway through theproject. Such cases often result in project failure; the projectmanager is then given the responsibility to identify a newsponsor and obtain his or her support and commitment tocontinue with the project. In addition, while a sponsor isimportant for providing governance over the project, a proj-ect board is also important. It operates a mechanism tomanage the broader impacts of the project. Interviewee (3)pointed out that, in his experience, while a project oftenstarts with one sponsor, it rarely finishes with only one. Asthe project’s impacts become clearer, others will more thanlikely want to be involved.

Interviewee (3) considered the positioning of projectsas a form of temporary project organization ancillary to theoperational organization as essential; otherwise, a projectmay follow the agenda of just one set of interests and ismore likely to fail. This is where a project board can ensurethat the wider project impacts are understood and managed.

Turning to the second area of questioning, regardingthe definition of scope and success, interviewee (3)explained that in his professional services, while the spon-


sor sets the initial scope position, this individual invariablyends up in a contract. Often a disparity between exists insuch cases between what the sponsor indicated was requiredand what can actually be delivered; usually, interviewee (3)noted, the latter ends up in the project contract. He also saidthat, in his experience, the project manager has to under-stand the factors that will make the project successful; this isachieved through discussion, influence, negotiation, com-mitment, and support. In that way, the project manager is abridge-builder and integrator.

When asked about scope being open or closed, inter-viewee (3) suggested that scope must be evolutionary; in hisexperience, this has been a mark of successful projects.

Interviewee (3) saw a strong relationship between gov-ernance and scope. Governance provided by a board canrepresent all the impacted areas of the project, such as thedifferences in decision-making between a sponsor’s desiredscope and the outcome proposed by the project manager.While a project manager can facilitate a satisfactory scopeposition, he or she can’t fully represent the business per-spective. Interviewee (3) argued that this is best achieved bya board that can represent all areas impacted by the projectand which can make the decisions that affect scope.

In response to the third area of questioning, interviewee(3) indicated that the project manager generally has suffi-cient power and authority within the project team to makethings happen. However, when the project manager tries toact externally, this individual’s power and authority are usu-ally found to be limited; this is when the project managerneeds a sponsor. Interviewee (3) added that this lack ofpower and authority to act cross-functionally could be miti-gated if the value of the project’s potential outcomes wererecognized by executives.

When asked about the propensity for conflict withinprojects, interviewee (3) indicated conflict need not be pres-ent, but he has never known a project where it hasn’t. Whenconflict does occur, interviewee (3) proposed that it is pri-marily the project manager who facilitates conflict resolu-tion through influence and by working with the sponsor topush forward decision-making.

The last area of questioning regarded partnering.Interviewee (3) suggested that while this emerged as apromising trend 10-to-15 years ago, partnering in today’smarketplace it is just good business practice. In my notingthat behind every good relationship there is a contract,interviewee (3) disagreed, saying partnering is based ongood relationships that are built on trust. Interviewee (3)pointed to some partnering models that propose risk shar-ing, saying that for projects like these to work, both sidesneed to control the risk drivers. If this doesn’t occur, thenthe project is not equitable and the result is not partnership.

Interviewee (4) is responsible for project manager com-petence in a large, multinational organization where projectmanagement is utilized as a core delivery mechanism forproducing new products and delivering services.

In the first question area of sponsorship and gover-nance, interviewee (4) described sponsorship as an impor-

tant feature in his organization’s management of projects.This role is well recognized and formally defined in his orga-nization’s methodology documents. He pointed out that theimplementation of this hasn’t always been successful andsuggested this is because implementation often comes downto organizational competence: his organization oftenassumes that if a senior manager is appointed to the role ofsponsor, then that manager is competent to perform thatrole.

Going further, interviewee (4) pointed out that projectsponsorship isn’t a job: he noted that one cannot go to themarket to get one. He said that he has observed situationswhere sponsors had not enough to do in their day-to-dayrole and have ended up playing too large a role in the proj-ects they sponsor, as well as the more common situationwhere a sponsor has too much to do to be able to dedicateappropriate effort to projects.

Interviewee (4) viewed the role of sponsor as central tothe organization’s effective management of projects. Hedescribed experiences where projects were not performedsatisfactorily; in these instances, he said, failure resultedbecause the project lacked a sponsor or sponsorshipchanged during the project.

In answering my question about defining project scopeand success, interviewee (4) noted that the projects hisorganization had the most trouble with were affected byeither the organization or the customer not really being surewhat they wanted. In these instances, the risk was placed onthe project manager’s shoulders.

When asked about the definition of scope and success,interviewee (4) indicated that in his organization, sponsorsdon’t typically set the scope; instead, he said they sign it offafter it is developed through the sales process. He suggestedthat the idea of chiseling out a fixed scope position is irra-tional and just doesn’t happen. It evolves over time andinvolves maintaining a balance between being responsive tothe customer and the organization’s needs. He noted thathis organization’s experience of defining success has notalways worked well, and this is often more of an organiza-tional issue than a project issue: is success delivering X boxesand Y software, or is it really providing a solution that meetscustomer needs? From a project perspective, interviewee (4)viewed the drivers of success in his industry as being timeand cost, which are usually well defined through the salesand contract process.

Turning to the third area of questioning, on authorityand power, interviewee (4) argued that this relationship isoften linked to the experience of the project manager. Hesaid that this relationship is a big issue for less experiencedproject managers and a non-issue for more experiencedproject managers.

Going further, he pointed out that this power andauthority imbalance will always be an issue because theorganization is now and always will be functionally based,with at best a balanced matrix between the line organizationand the project organization. He viewed this as somewhatinevitable, because the line manager will always be there but


the projects will always be transient.When asked about the degree to which conflict is inher-

ent in projects, interviewee (4) viewed this as being directlyrelated to organizational maturity and customer maturity.This means being clear internally about what is required todeliver the project and what the organization has agreed todeliver; it also involves being clear externally about the orga-nization’s maturity in making the decisions required toaccomplish projects. Without this maturity on either side,the words in a contract can be misunderstood and projectsuccess jeopardized.

In the last area of questioning, on partnering, intervie-wee (4) indicated that the main problem is that these situa-tions are not aren’t win-win-oriented. In acustomer-supplier relationship, the customer always has theupper hand because they pay the money. In describing this,

he pointed to a long-term strategic partnership with compa-ny X, a dominant player in the industry, and the fact that hisorganization’s market share has declined ever since.

He also pointed out that he didn’t want to see hisorganization go down the construction model where every-thing is put into a contract. If there are any changes, theorganization must then channel all changes through itslawyers. He believed that the best interests of both partiesare better served by a consensual approach.

Summary of Findings and Conclusions

FindingsThe interviews indicate that an effective sponsorship andgovernance model for projects within organizations is oftennot well-established or not sufficiently stable within organ-izations. Only interviewee (4) pointed to a formalized spon-

Sponsorship and Governance

Defining Scope and Success

Power and Authority

Partnering as an Approach

• Sponsorship is critical to projects yet often varies or is inconsistent throughout the life of the project.

• Because projects are cross-functional, they need effective governance from representatives of impacted areas.

• Changes to sponsorship and/or governance increases the risk of project failure.

• While the definition of scope and success may start with the sponsor, it ends up being defined by the project manager.

• Scope is open and evolves over the life of the project.

• There is an imbalance of power and authority between the formal organization and the project.

• The sponsor holds the formal power and authority and passes only what is needed.

• Partnering, while put forward as an emerging trend, is reallyjust good business practice.

• True partnering can never be fully achieved because thereis never equal sharing of risk.

• Indicates the importance of identifying and getting the right sponsor, just the one, at the right level of seniority within the organization.

• The role of Sponsor is formally defined in only one of the interviewed organizations, but in all four, changes to the sponsor, or a lack of sponsorship almost always occur resulting in an impact to the performance of the project. One Interviewee noted that there is an assumption of competence on the part of sponsors that is not always matched with project results.

• Effective governance is essential for projects to ensure that the project represents all impacted areas and not just one agenda, e.g. the sponsors. The size and shape of governance models, for example, project boards, varies; there is no one model for project governance.

• Whenever the sponsorship and/or governance of projects varies, the risk or project failure increases, yet the majority of concern from the interviewees on this was focused on the organizational impacts rather than project impacts.

• Often, the definition of scope starts out at a high level, almost a wish list of the sponsor, but invariably it is the project manager that works through the details and facilitates agreement of the scope of what will actually be done. When this is not achieved, or the organization or customer is not clear on what is required, risk is placed on the project manager.

• There is universal agreement that project scope cannot be chiseled in stone, but rather it evolves over time, and this has been a feature of successful projects.

• Formal power and authority is held by the sponsor and is passed to the project manager in a limited way as the need dictates.

• Experienced project managers are able to get things done and minimize the need for formal power and authority but less experienced ones find this difficult.

• This imbalance contributes to the conflict that appears inherent in projects because the functional organization will always be there but the project organization is transient and is working to specific, time-limited objectives. Organizational maturity is a factor in how great an issue this imbalance is and how it is dealt with.

• The majority of responses agree that without an equal sharing of risks then there can’t be a win-win, and ultimately, no true partnering.

• When considered in relation to the other question areas, partnering may be a case of treating the symptom rather than the problem. At least one interviewee noted the need for clarity over roles and responsibilities.

Question Area Themes Observation

Figure 3: Thematic analysis


sorship and governance model, and, even then, the intervie-wee noted that this model was not always followed. In thecase of interviewee (1), where that organization has experi-mented with different approaches, it appears the impact onmanagement overheads has been the major concern ratherthan its effectiveness on the project environment. Projectsby their very nature are unique; parent organizations mayneed to adapt and adjust structures to accommodate theirproject agenda.

There was general acknowledgement of the value ofproject management in defining scope, and, indeed, inter-viewee (1) attributed the most accurate picture to the proj-ect. However, this was not extended to seeing a moreintegrated and seamless role for project management withinthe organization. I concluded that a general lack of recogni-tion concerning the impact and the role that projects play inorganizations exists; I also surmise that executives areunwilling to sponsor and stand behind projects. Three of thefour interviewees acknowledged that projects are often notviewed as a core capability mechanism within their organi-zation. Where there are acknowledged areas of concern, ashighlighted above, the prime focus of these organizations ison the impact of projects on the organization and the man-agement of project overhead. In each instance, however,whether it is finding the right level of governance or author-ity that is passed to the project, I recognized a concomitantincrease in risk to the project. This aspect was not acknowl-edged by the organizations.

I also recognized that the above-mentioned organizationslacked a single scope position. Organizations are fluid andproject scope constantly changes; as a result, the reality is oftena high cost and impracticality in “trying to define a movingpicture.”

The interviewees showed a high level of agreement regard-ing reluctance among project sponsors to hand over authorityand power to the project manager. It may be that organizationsand executives do not fully trust the discipline of project man-agement; or they may not have established sufficient controlsto adopt this discipline with confidence. The evolving andemerging role of project management within these organiza-tions may also affect the way organizations perceive the disci-pline. This may suggest a lack of satisfaction with the balanceand fit of project management in organizations, evidenced bythe moving boundaries of power and authority. Whatever thereason, I have concluded that changes to the power andauthority of projects shifts risk to the project.

As a result of the widespread agreement on the limita-tions and inequality of partnering as an approach, I believethat this approach did not contribute to the effectiveness ofprojects.

Conclusions1. An effective sponsorship and governance model is essen-

tial to project success and provide the organizational con-text for project success. Changes to project sponsorship orgovernance during the term of the project increase risk ofproject failure.

2. While an initial scope position is provided by the organi-zation to the project manager, the project team developsthe final scope position. The project manager has theresponsibility to negotiate an agreement of this scopewith the sponsor. If this is not achieved, the risk of proj-ect failure shifts to the project.

3. An imbalance of power and authority between the organ-ization and the project manager exists; whenever theorganization varies the power and authority entrusted tothe project manager, risk shifts to the project.

4. Changes to the organizational context of a projectincreases the risk of the project failing.

RecommendationI recommend that further detailed research must be devel-oped regarding the context of project management withinorganizations. The objective of such research should be thedevelopment of an effective model for managing the associ-ated impacts on projects.

References

Berggren, C., Soderlund, J., & Anderson, C. (2001).Clients, contractors and consultants: The consequences oforganizational fragmentation in contemporary projectenvironments. Project Management Journal, 32(3), 39-448.

Cannon, J. (1994). Why IT applications succeed orfail: The interaction of technical and organizational fac-tors. Industrial and Commercial Training, 26(1), 10-15.

Cavaleri, S. & Fearon, D. (2000). Integrating organiza-tional learning and business praxis: A case for intelligentproject management, The Learning Organization, 75, 251-258.

Cicmil, S. (1997). Critical factors of effective projectmanagement. The TQM Magazine, 96, 390-396.

Cicmil, S. (1999). An insight into management oforganizational change projects. Journal of WorkplaceLearning, 11(1), 5-15.

Cicmil, S. (2000). Quality in project environments: anon-conventional agenda. International Journal of Quality &Reliability Management, 17(4/5), 554-570.

Cleland, D. (1995). Project management – Strategicplanning and implementation (2nd ed.). New York: McGraw-Hill.

Collyer, M. (2000). Communication – The route tosuccessful change management: Lessons from the GuinessIntegrated Business Programme. Supply Chain Management:An International Journal, 5(5), 222-225.

Crawford, L., & Cooke-Davies, T. (1999). Enhancingcorporate performance through sustainable project managementcommunities. Retrieved February 5, 2005, fromhttp://www.pmcompetence.net/PPG/download/99pmi.pdf

Denzin, N., & Lincoln, Y. (1998). Strategies ofQualitative Inquiry. Thousand Acres, CA: Sage Publications.

Feuer, R., Chaharbaghi, K., & Wargin, J. (1995).Analysis of strategy formulation and implementation atHewlett-Packard. Management Decision, 33(10), 4-16.

Forster, J., & Browne, M. (1996). Principles of strategic


management. South Melbourne, Australia: MacmillanEducation Australia Pty. Ltd.

Frame, J. D. (2002). The new project management: Toolsfor age of rapid change. San Francisco: Jossey-Bass.

Gooch, J. (1997). Managing for demonstrably effectiveIT projects. Information Management & Computer Security,5(4), 133-137.

Hebert, B. (2002, February). Tracking progress. CMAManagement, 24-27.

Heracleous, L. (2000). The role of strategy implementa-tion in organization development. Organization DevelopmentJournal, 18(3), 75-86.

Homes, G., (2001). The hybrid manager. Industrial andCommercial Training, 33(1), 16-25.

Keeling, R. (2000). Project management. New York: St.Martins Press.

Kloppenborg, T., & Opfer, W. (2002). The current stateof project management research: Trends, interpretations,and predictions. Project Management Journal, 33(2), 5-18.

Kuruppuarachchi, P., Mandal, P., & Smith, R. (2002). ITproject implementation strategies for effective changes: acritical review. Logistics Information Management, 15(2),126-137.

Laszlo, G. (1999). Project management: A quality man-agement approach. The TQM Magazine, 11(3), 157-160.

Lloyd-Walker, B., & Cheung, Y.P. (1999). Project teamsin the Australian banking industry. Journal of WorkplaceLearning, 11(1), 33-37.

Loo, R. (1996). Training in project management: Apowerful tool for improving individual and team perform-ance. Team Performance Management: An International Journal,2(3), 6-14.

Peled, A. (2000). Politicking for success: The missingskill. The Leadership & Organization Development Journal,21(1), 20-29.

Pinto, J., & Rouhiainen, P. (2001). Building customer-based project organizations. New York: John Wiley & Sons.

Project Management Institute. (2000). A guide to the

project management body of knowledge (PMBOK® guide).Newtown Square, PA: Author.

Randolph, A., & Posner, B. (1992). Getting the job done!Managing project teams and task forces for success. EnglewoodCliffs, NJ: Prentice-Hall Inc.

Reichers, A., Wanous, J., & Austin, J. (1997).Understanding and managing cynicism about organiza-tional change. The Academy of Management Executive,11(1), 48-59.

The Standish Group, (1999). CHAOS: A recipe for suc-cess. Retrieved September 16, 2002, from http://www.stan-dishgroup.com/chaos.html

Strauss, A., & Corbin, J. (1998). Basics of QualitativeResearch, 2nd Edition. Thousand Acres, CA: SagePublications.

Thomas, J., Delisle, C., Jugdev, K., & Buckle, P. (2002).Selling project management to senior executives: The casefor avoiding crisis sales. Project Management Journal, 33(2),19-28.

Thompson, J., & Richardson, B. (1996). Strategic andcompetitive success: Towards a model of the comprehen-sively competent organization. Management Decision, 34(2),5-19.

Webster, G. (1994). Whole-brain project managementfor all. Industrial and Commercial Training, 26(11), 22-31.

Webster, G. (1999). Project definition – The missinglink. Industrial and Commercial Training, 31(6), 240-244.

Additional Suggested Reading

Narayanan, V., Douglas, F., Guernsey, B., & Charnes, J.(2002). How top management steers fast cycle teams to suc-cess. Strategy & Leadership, 30(3), 19-27.

Whittaker, B. (1999). What went wrong? Unsuccessfulinformation technology projects. Information Management &Computer Security, 7(1), 23-29.

Winklhofer, H. (2002). Information systems projectmanagement during organizational change. ProjectManagement Journal, 14(2), 33-39.

MARK IVES is a consultant with Terra Firma Pty. Ltd, a specialist provider of business analysis and project management

services. He holds a Master of Business Administration degree and is president of the Project Management Institute

Melbourne (Australia) Chapter. He draws on 25 years experience in a variety of business management and technology

roles, principally in financial services.

March 2005 Project Management Journal • 51March 2005 Project Management Journal • 51

THE PROJECT SCHEDULING GAME (PSG):SIMULATING TIME/COST TRADE-OFFS IN PROJECTS

MARIO VANHOUCKE, Vlerick Leuven Gent Management School, Operations & Technology

Management Center, Faculty of Economics and Business Administration

Hoveniersberg 24 - 9000 Gent (Belgium)

ANN VEREECKE, Vlerick Leuven Gent Management School, Operations & Technology Management

Center, Faculty of Economics and Business Administration, Hoveniersberg 24 - 9000 Gent (Belgium)

PAUL GEMMEL, Vlerick Leuven Gent Management School, Operations & Technology Management

Center, Reep 1 - 9000 Gent (Belgium)

ABSTRACT

The Project Scheduling Game is an IT-

supported simulation game that illus-

trates the complexity of scheduling a

real-life project. The project is based on a

sequence of activities for a large real-life

project at the Vlaamse Maatschappij

voor Watervoorziening, which aims at

the expansion of the capacity to produce

purified water. The basic problem type

that we use in the game has been

described in the literature as a CPM (crit-

ical path method) network problem, and

focuses on the time/cost relationship in

each activity of the project. Indeed, by

allocating resources to a particular activ-

ity, the manager decides about the dura-

tion and corresponding cost of each

network activity. The manager schedules

the project with the negotiated project

deadline in mind, focusing on the mini-

mization of the total project cost.

Keywords: project management; CPM;

time/cost trade-off problem; business

games


Vol. 36, No. 1, 51-59, ISSN 8756-9728/03

1. Introduction

In recent years, several summary papers have given an overview of the past andcurrent development in project scheduling literature (see, for example, thepapers by Icmeli, Erengüç, and Zappe (1993), Elmaghraby (1995), Özdamar

and Ulusoy (1995), Herroelen, De Reyck and Demeulemeester (1998), andBrucker, Drexl, Möhring, Neumann, and Pesch (1999)). These papers primarilyfocus on the modeling aspect and algorithmic developments necessary to sched-ule complex projects. A second area of publications, to which a lot of researchattention has been devoted, focuses on the generation of data in order to bench-mark the different solution procedures (see, for example, the papers byDemeulemeester, Dodin and Herroelen (1993), Kolisch, Sprecher, and Drexl(1995), Schwindt (1995), Agrawal, Elmaghraby, and Herroelen (1996), andDemeulemeester, Vanhoucke, & Herroelen (2003)). In this paper, we make aneffort to tighten the gap between the project scheduling literature and the needsof project managers. Project managers are constantly confronted with the intrica-cy of scheduling a complex real-life problem in an efficient way when they oftenhave little knowledge of the state-of-the-art in the algorithmic developments. Agame has been developed that serves as a training tool to help practitioners gaininsight in project scheduling. The project scheduling game (PSG) uses a real-lifeproject from a water production center as an input and allows the incorporationof any project suggested by the participants. In this paper, we discuss a PSG thatsimulates the scheduling of the well-known time/cost trade-off problem. Thegame helps show the project manager the complexity of scheduling a project andcreates an incentive to rely on algorithmic procedures developed by manyresearchers in the field.

The time/cost trade-off problem finds its roots in the Critical Path Method(CPM), developed between 1956 and 1959 at the duPont Company and atRemington Rand Univac (Kelley & Walker, 1959; Walker & Sayer, 1959; Kelley,1961). CPM is based on a diagram that represents the entire project as a networkof arrows and nodes. This network representation is still commonly used in amajor part of the scientific research in project scheduling. Since then, a never-end-ing amount of literature has focused on the extensions of this basic problem type.Basically, CPM assumes the duration of project activities to be non-increasingfunctions of the amount of a single non-renewable resource. This implies that thecost of an individual activity is a function of its duration, that is, by spending

*corresponding author


part of the project-planning phase,receive feedback from the project con-trol phase, and reschedule as the proj-ect is being executed.

The various algorithmic develop-ments in literature dealing with theplanning and scheduling phase arestrongly related with optimizationmodeling and require, therefore, thenecessary skills and technical know-how. (In literature, researchers oftenrefer to the NP-hardness to denote thecomplexity of most scheduling prob-lems See, for example, Demeulemeesterand Herroelen, 2002). Unfortunately,the manager who is in charge of theproject often has little or no back-ground in optimization and, conse-quently, ignores the recentdevelopments in the field. One of themajor goals of our project schedulinggame is to create a feeling of the enormouscomplexity of the project-schedulingphase and to create an incentive to rely onthe state-of-the-art developments by differ-ent universities. Indeed, research hasrevealed interesting insights in thecrashing behavior of activity durationsunder different assumptions (linear,convex, concave, discrete or arbitrarytime/cost trade-offs).

However, at the other extreme,completely relying on algorithms toschedule real-life projects ignores thefact that uncertainty will occur. Indeed,due to unexpected events (a delay inan activity, a machine breakdown, astrike, an inaccurate estimate ofresource usage, etc.) the execution ofthe project will differ from the originalschedule. Periodically, the manager hasto control the execution and adapt thepreliminary schedule. A thoroughunderstanding of the technical detailsand complexity of the schedulingmechanism is, therefore, indispensa-ble. Although recent research focuseson the robust scheduling of projects(i.e., incorporation of the notion ofuncertainty from the very beginning),a control feedback loop and an adapta-tion of the schedule will remaininevitable. This is referred to as reactivescheduling (Jorgensen & Wallace,2000). In this paper, the authors arguethat managers often reapply a modelafter new information arrives. They

more (or less), the resources activities’duration will decrease (or increase).The problem has been studied underthree possible objectives. The so-calleddeadline problem involves the schedul-ing of project activities in order to min-imize the total cost of the project whilemeeting a given deadline. The budgetproblem aims at minimizing the proj-ect duration without exceeding a givenbudget. A third objective combines thetwo previous ones and involves thegeneration of a complete efficienttime/cost profile over the set of feasi-ble project durations; that is, all theefficient points (T, R) so that, with aresource limit R, a project length T canbe obtained and, so that, no otherpoint (T’, R’) exists for which both T’and R’ are smaller than or equal to Tand R.

The early time/cost trade-off mod-els assumed the direct activity costfunctions to be linear non-increasingfunctions. The objective was to deter-mine the activity durations and toschedule the activities in order to min-imize the project costs (i.e. the sum ofthe direct activity and the time-dependent indirect project costs) with-in a specified project deadline.Therefore, the activity costs are a func-tion of the activity durations, whichare bounded from below (crash dura-tion) and from above (normal dura-tion). Solution procedures for thelinear case are proposed by Kelley andWalker (1959), Fulkerson (1961),Kelley (1961), Ford and Fulkerson(1962), Siemens (1971), Goyal(1975), and Elmaghraby and Salem(1981). Several other forms of activitycost functions have been studied,including concave (Falk & Horowitz,1972), convex (Lamberson & Hocking,1970; Kapur, 1973; Siemens &Gooding, 1975; Elmaghraby & Salem,1980a, 1980b); and general continu-ous activity cost functions (Moder,Phillips & Davis, 1983).

Due to its practical relevance, pro-cedures have also been developed forsolving the discrete version of theproblem in which the duration of proj-ect activities are a discrete, non-increas-ing function of the amount of a single,non-renewable resource committed to

them. It involves the selection of a setof execution modes (the time-cost pairfor each activity) in order to achieve acertain objective (deadline, budget, orthe complete and efficient time/costprofile). We refer the reader to papersby Crowston and Thompson (1967),Crowston (1970), Robinson (1975),Billstein and Radermacher (1977),Wiest and Levy (1977), Hindelang andMuth (1979), Patterson and Harvey(1979), Bianco and Speranza (1990),Vercellis (1990), Elmaghraby andKamburowski (1992), De, Dunne,Ghosh, and Wells (1995, 1997),Demeulemeester, Elmaghraby, andHerroelen (1996), Demeulemeester,De Reyck, Foubert, Herroelen, andVanhoucke (1998), Skutella (1998),and Akkan, Drexl, and Kimms (2000a,2000b).

The outline of this paper is as fol-lows: The following section discusseswhy managers can benefit from a proj-ect scheduling game. Section 3 pres-ents the real-life example project usedin the PSG. Section 4 is reserved for anexplanation of the different features ofthe game. Section 5 discusses the edu-cational approach, and the last sectiondraws overall conclusions and high-lights the plans for our future work.

2. Why do Managers Need This Game?

Typically, a project goes through anumber of different phases, which areoften referred to as the project life cycle(see Figure 1 in this paper, as well asKlein’s 2000 book). Such a life cycleconsists of a project conception phase,a project definition phase, a phase inwhich the project has to be plannedand scheduled, the execution of theproject, the controlling phase in whichwe monitor the progress of the project,and the final termination of the proj-ect. The project of the game, like anyproject, goes through these differentphases. The conception and definitionphase has been completed and servesas an input to the simulation. The proj-ect concept and its different featuresare described in Section 3. The gamesimulates the planning, scheduling,execution, and control of the project.Participants playing the game focus onthe scheduling of the project, which is


refer to the well-known time/costtrade-off model, which is solved reac-tively simply by solving static modelsduring the execution of the project.The project scheduling game of thispaper suits well to that purpose.

In the next section, we discuss thefeatures of the real-life project used inthe PSG business game. Note that theproject characteristics discussed in thenext section are a result of the projectconception and definition and plan-ning phase, and are used as input forthe manager (i.e., the player) who isnow put in charge of scheduling theproject.

3. The Project of PSG

In this section, we briefly review thecharacteristics of a real-life project atthe Vlaamse Maatschappij voorWatervoorziening (VMW). The VMW isa Flemish water distribution company,which covers approximately 50 percentof Flanders, located in the northernregion of Belgium. This company pro-duces and delivers water by transform-ing surface water into drinkable waterand distributing it to the customers.The VMW services 2.5 million cus-tomers with a pipeline network of27,000 km and a yearly production of140 billion litres of water. The projectaims at the expansion of the capacityto produce pure water. A detaileddescription of the project can be foundin Vanhoucke and Demeulemeester(2003). The characteristics described inthis section are a result of the defini-

tion and planning phase, and will beused as an input to start the game.

In the definition phase, the organi-zation defines the project objectives,the project specifications and require-ments, and the organization of thewhole project. In doing so, the organi-zation decides on how it is going toachieve these objectives. The VMW hasdecided to perform the project in twomajor steps. In a first step, it will focuson an extension of the storage capacityof treated water without expanding theproduction capacity of pure water. Thelatter is the subject of a second stepthat aims at an increase of the produc-tion capacity of pure water. For educa-tional purposes, the game focuses onlyon part of the whole original project.In doing so, we reduce the size of thewhole project without losing the over-all complexity.

Once the project has been defined,the project enters the planning phase.Based on the information of the previ-ous phase, the organization can startwith the estimation of the durations

and costs of the activities, and theprecedence relations among theseactivities. The project scheduling gamebegins at this point of the project lifecycle, taking the detailed description ofthe project as an input. (For moreinformation, see Figure 2 and Table 1in this paper, as well as Vanhoucke andDemeulemeester’s Project ManagementJournal paper from March, 2003.) Thenext step is to schedule the project inorder to present a timetable for theproject activities. As previously men-tioned, the game focuses on the con-struction of a precedence feasibleschedule and the adaptation of thisschedule during the execution andcontrolling phase, which is inevitabledue to uncertain events.

In Figure 2, we display the activity-on-node (AoN) network for the proj-ect. The project consists of 44 activities(and a dummy start and dummy endnode), which can be divided into twomain subprojects: the constructionactivities at the plant itself and all theremaining construction activities out-

Concept and Definition

Planning and Scheduling

Execution

Control

Termination

PSGSimulation

Figure 1: The project life cycles

44434138

40

38

39

3142

27 28 29

30

33

32 34 35

3736

13

15

16

17

18 1922

21

24

25 2623101

2 4

5 7

6 9

11

8 123

20

14

END

START

Figure 2: The AoN project network of the real-life project


side the plant. The project is slightlydifferent from the description of theoriginal project (see Vanhoucke andDemeulemeester, 2003), since we havecombined a number of activities intoone domed activity and we haveextended each estimated activity dura-tion to cope with time/cost trade-offs.This data is important since the gamerelies on the time/cost trade-off prob-lem in order to illustrate the complex-ity of scheduling a real-life project. Weassume that the structure of the net-work will remain unchanged through-out the simulation. This differs fromnormal practice in which networks areoften changed substantially as theproject progresses.

In the next section, we describethe project scheduling game in moredetail. We focus on the scheduling andcontrolling phase used during the exe-cution of the project.

4. Features of PSG

Each of the 44 individual activitiesshown in Figure 2 must be finished tocomplete the capacity expansion proj-ect, and this must be done in asequence that does not violate theprecedence relationships shown in thenetwork diagram. As in real life, theactivities that make up the total projectdo not have a single, fixed duration,but can vary with the amount ofresources that management spends(the so-called time/cost trade-off). Theprimary task for a project managementteam is to decide on the activity dura-tions to be scheduled for each activity,taking into account costs and the proj-ect completion time. In addition, thereare factors beyond control of manage-ment that can influence the length ofan activity. During the project, occur-rences such as strikes or acts of naturemay cause some activities to bedelayed beyond their planned dura-tion. On the other hand, “fortune”may smile and result in an earlier-than-planned completion of someactivity.

The game starts with an originalschedule in which scheduled activityduration decisions have already beenmade. This results in an expected com-pletion time for the project, as well as a

total cost for completing the project.The expected completion time isobtained by adding up the total time tocomplete the activities along the criticalpath in the network (as previously men-tioned, the time/cost trade-off finds itsroots in the critical path method). Weassume that weekends and holidays arealso working days (and consequently,we ignore the so-called time/switchconstraints described in Vanhoucke,Demeulemeester, and Herroelen(2002), and Vanhoucke (in press)).

Total project cost is made up ofthe sum of the delay cost (describedbelow) and the planned activity costsfor each of the 44 activities. Playerdecisions will establish new planneddurations for some activities and will,therefore, change both the plannedcompletion time of the project and itstotal cost. Decreasing activity dura-tions will increase activity costs. Themaximum activity cost for the projectwould result if all activities wereplanned at their shortest duration(the crash duration). Minimum activ-ity cost, on the other hand, resultswhen all activities have their longestduration (the normal duration). Thedifference between these two costs isthe amount of resources that can beinfluenced by the management team’sdecisions.

At the start of the game, the man-ager faces a target deadline T, earlierthan the original schedule in which allactivities are scheduled at their normalmode (and yet, no crashing has beendone for any activity). If the project isnot complete by this target deadline, apenalty cost will be imposed for each day ofoverrun. Shortening the entire projectto bring the last project activity tocompletion by the target deadline maybe accomplished by the expenditure ofresources, where necessary, to shortenvarious activities throughout the net-work. The way money is spent – forovertime, additional workers, extramachinery and the like – is not speci-fied in this game. The assumption ismade that manpower and resourcesare available to accomplish activitieswithin any duration that does not falloutside the limits specified in thegame. Each project management team

is thus responsible for schedulingactivity durations, so that the project iscompleted at the lowest possible cost,where total cost is the sum of activitycosts and delay costs. Consequently,the game focuses on the deadlineproblem of the time/cost trade-offproblem, which involves the schedul-ing of project activities in order to min-imize the total cost of the project whilemeeting a target deadline T.

One of the unique features of thePSG is that it completely relies on theinteraction between the scheduling,execution, and controlling phase (seeFigure 1) and makes use of the feed-back loop in order to monitor theprogress of a project. Indeed, duringthe execution phase the project has to bemonitored and controlled. If devia-tions from the existing schedule occur,corrective actions have to be taken(previously referred to as reactivescheduling). In this simulation, themanagement team must submit sixsets of scheduling decisions. After a setof decisions has been submitted, thecomputer will simulate the passage ofa number of working days (executionphase, from ti to ti+1 in Figure 3) andwill provide management with a list ofall activities completed in that timeperiod. In addition, the computer willprovide an explanation of any delaysor early finishes that may have causedan activity to take a different durationthan was scheduled by the projectteam. Before any set of decisions, themanagement team can change thescheduled duration for any activitythat has not been completed.Obviously, the duration of a complet-ed activity can no longer be altered bymanagement’s decision. Figure 3 givesa graphical illustration of the six differ-ent sets of decision steps in the gamewith the allocated time that a playerreceives to prepare his/her decision.The simulation ends after six sets ofdecision steps, with a maximal allow-able time of 80 minutes.

Because of the large number ofactivities and the complexity of thescheduling task, the computer is usedfor the analysis. At any time it is possi-ble to save and simulate scenariosbefore making a periodic decision, to


return to the settings of the last deci-sion, or to the settings of former savedscenarios.

5. Educational Approach

Simulation Seminar and Target GroupA traditional PSG session consists typ-ically of three parts: a general intro-duction to the critical path methodand the features of the project, the 80-minute simulation (see previous sec-tion), and a debriefing in which thedistinct strategies are discussed. Thegame focuses on the complexity ofallocating scarce resources, as well asstart/finish times to activities of a largereal-life project. It illustrates the diffi-culties a project manager faces whenplanning, scheduling and monitoringa large project. The game is particular-ly interesting for project managers,project planners and project teammembers, and can be played individu-ally or in groups of two or three partic-ipants.

Teaching ProcessEach project management team

should study the starting position andconsider alternative courses of actionfor meeting the required project com-pletion date. While a complete analysisof the network is not essential at thispoint, the group should at least identi-fy critical and subcritical paths, andcarefully investigate activities that arelikely to be completed during the firstdecision report period (see Figure 3).

Once a decision has been made, activ-ities completed during that period can-not be changed. During thesimulation, the player is continuouslyconfronted with a number of valuableconcepts used in project scheduling,such as the earliest activity start/finish,the latest activity start/finish, the activ-ity slack, and the deadline slack. He orshe must incorporate information withrespect to these concepts to make peri-odic decisions based on a Gantt (bar)chart. Figure 4 shows the workingscreen of the player (the Gantt chart)on which decisions can be made. Thisscreen shows:

• Activities of the current criticalpath of the resulting schedule

• Possible changes in the activityduration (i.e., the activitytime/cost trade-off)

• Activity slack• The current decision moment• Expected project completion and

the corresponding cost of the cur-rent schedule

Performance EvaluationPlayers are evaluated on the basis

of the total cost of their final schedule.As stated earlier, total project cost ismade up of the sum of the delay costand the planned activity costs. Due tothe combination of these two costs,players who are able to schedule theproject within the target deadline T donot necessarily generate the best over-

all schedule. Indeed, depending on thevalue of the penalty cost, it can beadvantageous to schedule the projectwith a completion time T* longer thanthe target deadline T, resulting in apenalty cost for each day overrun, butat a lower total cost. This is illustratedin Figure 5, which shows the completeoptimal time/cost profile (the lowestpossible cost for each possible comple-tion time). During the debriefing ses-sion, we confront the players with thisresult. Note that the final result of eachparticipant lies on or above the opti-mal time/cost profile of Figure 5.

Game DiscussionIn the discussion following the

game, performance of the teams iscompared and participants are askedto describe the strategies they have fol-lowed. This leads them to a clearunderstanding of the meaning of thecritical path and the impact of crashingactivities on the critical path.Confronting the participants with theminimum time/cost profile (as inFigure 5) has proven to be very usefulin this discussion.

Comparison of the results of theteams that have developed a clear strat-egy and those that have adopted a trialand error approach to the schedulingtask illustrates the value of projectscheduling techniques. Moreover, onetypically observes that some teams tryto optimize the project schedule overthe entire project horizon at each deci-

StartPSG

0’

t 0First Set ofDecisions

Final Set ofDecisions

30’ 45’ 55’ 65’ 75’

t5t4t3t2t1

80’

t 6

Termination

Control

Execution

Planning andScheduling

Definition

Termination

Control

Execution


Definition

Termination

Control

Execution


Definition

Termination

Control

Execution


Definition

Termination

Control

Execution


Definition

Figure 3: The six decision moments of PSG


sion phase, whereas other teams tendto focus on the first decision periodonly. The advantage of the formerapproach (reaching an optimal sched-ule) is then weighted against theadvantage of the latter (maintainingstability in the project schedule andreaching higher efficiency in schedul-ing). The discussion may then turntowards the value of sophisticatedscheduling in projects with high uncer-tainty.

The PSG is not unique. A well-known comparable game is Planets(Planning and network simulation).The difference with traditional projectscheduling games, however, is theopportunity PSG provides to be playedwith any realistic project network. ThePSG can be easily extended to anotherproject by simply changing the inputfile of the network under study. This

makes it possible to tune the trainingto the participants’ needs and to makethe game very recognizable to the par-ticipant.

PSG as a Research ToolThis paper describes PSG as an

educational tool. In our future work,PSG will also be used as a researchtool. Experiments will be set up inwhich project managers schedule aproject network with the game soft-ware. In these experiments, we willobserve the behavior of the managersand their preferences and strategies fol-lowed in scheduling the model.Comparing performance across teamswill allow us to gain better under-standing of the value of distinct projectscheduling routines, under distincttypes of projects and project environ-ments. For example, we will explore

whether some scheduling strategies aremore suited in project environmentswith low or high uncertainty.

6. Conclusions

In this paper, we have presented a proj-ect scheduling game for the time/costtrade-off problem as illustrated byCPM. The project is a real-life projectfor a water production center in orderto increase the production capacity ofpurified water. The individual player ispresented with the complex task ofscheduling the activities in time, takinginto account the total project costs bycarefully allocating resources to a par-ticular activity. In doing so, the playerhas six decision moments in which heor she decides about the duration andcorresponding cost of each networkactivity. After the simulation, the totalproject cost of the resulting schedule is

123456789

10111213141516171819202122232425262728293031323334353637

3121313333

191719221519162316191540533

191717181

2021212316191917151815

1000500

34502623

18484483

366636768315750

383339763

16250138697062

256573750

27500700

2000483

626342356411

11222150

865069047214

103049125

118426236

1335296336722

25000

03333

1515181816163538383731363654545461615757505050595980808082828278

04636

1621231916244038393839394054596162657064586259665987818383878287

315161636183435373831545461535051765957578078747551707180829699999997

10093

31619163919404038383959546254585480596264818287825982808782

103100102100102100102

01303165108501183405714

1378

129707131509

-17-16-14-17-14-16-11-12-16-17-9

-12-17-16-16-9

-14-13-17-12-10-16-13-4

-10-9-5-8

-10-17-10-16-14-16-12-17-8

1/01/20033/05/2003

17/04/200321/01/2003

38206010066

392126

Start DateEnd DateDeadline DateCurrent Date

Total Activities CostFineTotal Project Cost

Show possible changes in duration

Show Slack

Minutes left

79�Save Scenario Simulate Print Scenario Graphs

Load Scenario Take Decision Report

Duration Latest FinishEarliest StartDeadline StackEarliest Finish

Activity Cost Latest Start Activity Slack Day 20

Figure 4: The partial Gantt chart of PSG


used as a performance evaluation. Theultimate target of the game is to bringthe manager into contact with the dif-ferent concepts of project schedulingin a practical way, to confront the man-ager with the complexity that isinvolved in project scheduling, and tocreate an incentive to rely on algorith-mic procedures studied at differentresearch institutes. Indeed, the gameclearly illustrates that the schedulingphase of the project life cycle is a com-plex task, which can only be per-formed well by utilizing dedicatedsoftware with high-quality schedulingprocedures.

Our future work will be twofold. Afirst area for future work is to extendthe game with different features. First,we will extend the PSG to time/costtrade-off problems in whichtime/switch constraints are involved.In doing so, we no longer assume thatweekends and holidays are workingdays. Although this approximates real-ity better, the scheduling complexityincreases dramatically. Consequently, aperfect combination of software sup-port and a thorough insight in differ-ent project scheduling concepts are allthe more necessary. In addition, it isthe ultimate goal to incorporate otherproblem types in the game, such as theresource-constrained project schedul-ing problem, time/resource trade-offs,and many more. Finally, we also wantto include other real-life projects in thesoftware that can be used as an input

for the simulation. In doing so, thegame can be played with a projectfamiliar to the players. A second topicon which we want to focus is theanalysis of the final schedules of differ-ent players. Each individual playerwould have to fill in a checklist inwhich his or her strategy and opinionsare described. By comparing the differ-ent schedules and corresponding costsamong the different players, we will tryto gain insight into the thinkingprocess of project managers.

References

Agrawal, M.K., Elmaghraby, S.E., &Herroelen, W.S. (1996). DAGEN: Agenerator of test sets for project activi-ty nets. European Journal of OperationalResearch, 90, 376-382.

Akkan, C., Drexl, A., & Kimms, A.(2000a). Network decomposition forthe discrete time/cost trade-off prob-lem – Part 1: Models and boundingmethods. Extended abstracts of theSeventh International Workshop onProject Management and Scheduling.Osnabrück, Germany, April 17-19, 29-31.

Akkan, C., Drexl, A., & Kimms, A.(2000b). Network decomposition forthe discrete time/cost trade-off prob-lem – Part 2: Network decompositionand computational results. Extendedabstracts of the Seventh InternationalWorkshop on Project Managementand Scheduling. Osnabrück, Germany,April 17-19, 32-34.

Bianco, L., & Speranza, M.G.(1990). Resource management in proj-ect scheduling. Proceedings of the SecondInternational Workshop on ProjectManagement and Scheduling. June 20-22, Compiègne, France.

Billstein, N., & Radermacher, F.J.(1977). Time-cost optimization.Methods of Operations Research, 27, 274-294.

Brucker, P., Drexl, A., Möhring, R.,Neumann, K., & Pesch, E. (1999).Resource-constrained project schedul-ing: Notation, classification, models,and methods. European Journal ofOperational Research, 112, 3-41.

Crowston, W. (1970). Networkreduction and solution. OperationsResearch Quarterly, 21, 435-450.

Crowston, W., & Thompson, G.L.(1967). Decision CPM: A method forsimultaneous planning, schedulingand control of projects. OperationsResearch, 15, 407-426.

De, P., Dunne, E.J., Ghosh, J.B., &Wells, C.E. (1995). The discretetime/cost trade-off problem revisited.European Journal of OperationalResearch, 81, 225-238.

De, P., Dunne, E.J., Ghosh, J.B., &Wells, C.E. (1997). Complexity of thediscrete time/cost trade-off problemfor project networks. OperationsResearch, 45, 302-306.

Demeulemeester, E., De Reyck, B.,Foubert, B., Herroelen, W., &Vanhoucke, M. (1998). New computa-tional results for the discrete time/costtrade-off problem in project networks.Journal of the Operational ResearchSociety, 49, 1153-1163.

Demeulemeester, E., Dodin, B., &Herroelen, W. (1993). A random activ-ity network generator. OperationsResearch, 41, 972-980.

Demeulemeester, E., Elmaghraby,S.E. & Herroelen, W. (1996). Optimalprocedures for the discrete time/costtrade-off problem in project networks.European Journal of OperationalResearch, 88, 50-68.

Demeulemeester, E., & Herroelen,W. (2002). Project scheduling: A researchhandbook. Kluwer International Seriesin Operations Research andManagement Science, Boston: KluwerAcademic Publishers.

T*T ProjectCompletion

Total

Figure 5: The complete time/cost profile of the project of PSG


Demeulemeester, E., Vanhoucke,M., & Herroelen, W. (2003). A randomnetwork generator for activity-on-the-node networks. Journal of Scheduling, 6,13-34.

Elmaghraby, S.E. (1995). Activity

nets: A guided tour through somerecent developments. European Journalof Operational Research, 82, 383-408.

Elmaghraby, S.E., & Kamburowski,J. (1992). The analysis of activity net-works under generalized precedence

relations. Management Science, 38,1245-1263.

Elmaghraby, S.E., & Salem, A.(1980a). Optimal project compressionunder convex cost functions I: Quadraticcost with continuous derivative (ORTechnical Report 158). Raleigh, NC:North Carolina State University.

Elmaghraby, S.E., & Salem, A.(1980b). Optimal project compressionunder convex cost functions II (ORTechnical Report 157). Raleigh, NC:North Carolina State University.

Elmaghraby, S.E., & Salem, A.(1981). Optimal linear approximation inproject compression (OR TechnicalReport 171). Raleigh, NC: NorthCarolina State University.

Falk, J.E., & Horowitz, J.L. (1972).Critical path problems with concavecost-time curves. Management Science,19, 446-455.

Ford, L.R., & Fulkerson, D.R.(1962). Flows in networks. Princeton,NJ: Princeton University Press.

Fulkerson, D.R. (1961). A net-work flow computation for projectcost curves. Management Science, 7,167-178.

Goyal, S.K. (1975). A note on thepaper: A simple CPM time/cost trade-off algorithm. Management Science, 21,718-722.

Herroelen, W., De Reyck, B., &Demeulemeester, E. (1998). Resource-constrained project scheduling: A sur-vey of recent developments. Computersand Operations Research, 25, 279-302.

Hindelang, T.J., & Muth, J.F.(1979). A dynamic programming algo-rithm for decision CPM networks.Operations Research, 27, 225-241.

Icmeli, O., Erengüç, S.S., & Zappe,C.J. (1993). Project scheduling prob-lems: A survey. International Journal ofOperations and ProductionManagement, 13, 80-91.

Jorgensen, T., & Wallace, S.W.(2000). Improving project cost estima-tion by taking into account managerialflexibility. European Journal ofOperational Research, 127, 239-251.

Kapur, K.C. (1973). An algorithmfor the project cost/duration analysisproblem with quadratic and convexcost functions. IIE Transactions, 5, 314-322.

Task Task name

1. Construction Activities at the Water Production Center

1 Obtain building license for architecture2 Find contractor for architecture3 Obtain environmental license4 Execution of architectural work5 Design equipment6 Negotiations with power distribution company for the high voltage cabin (HVC)7 Specification/Public tender/Fabrication8 Execution9 Additional work on cables for HVC10 Updating existing high pressure room11 Constructing pipes between installations12 Coming into operation

2. Construction Activities Outside the Water Production Center

Pipes from WPC to Eeklo13 First draft design14 Find permission/contractor and construction pipeline

Water supply to TMVW15 Design16 Find permission17 Electricity connection18 Specification equipment19 Delivery equipment20 Execution21 Fitting in communication system22 Coming into operation

Constructing pumps at Zelzate23 Design for electricity connection24 Electricity connection25 Design/specification/delivery26 Execution/coming into operation

Constructing pumps and building water tower at Eeklo27 First draft design28 Design29 License request30 Specification and public tender31 Environmental license and notification VLAREM32 Realization33 Design/specification and request offer34 Execution35 Coming into operation

Constructing pumps at Waarschoot36 First draft design37 Design38 File constructing license39 Specification40 File environmental license41 Realization42 Design43 Execution44 Coming into operation

Table 1: List of activities of the project network shown in Figure 2


Kelley, J.E. (1961). Critical pathplanning and scheduling:Mathematical basis. OperationsResearch, 9, 296-320.

Kelley, J.E., & Walker, M.R. (1959).Critical path planning and scheduling: Anintroduction. Ambler, PA: MauchlyAssociates.

Klein, R. (2000). Scheduling ofresource-constrained projects. Boston,MA: Kluwer Academic Publishers.

Kolisch, R., Sprecher, A., & Drexl,A. (1995). Characterization and gener-ation of a general class of resource-constrained project schedulingproblems. Management Science, 41,1693-1703.

Lamberson, L.R., & Hocking, R.R.(1970). Optimum time compressionin project scheduling. ManagementScience, 16, B-597-B-606.

Moder, J.J., Phillips, C.R., & Davis,E.W. (1983). Project management withCPM, PERT and precedence diagramming(3rd ed.). New York: Van NostrandReinhold Company.

Özdamar, L., & Ulusoy, G. (1995).A survey on the resource-constrainedproject scheduling problem. IIETransactions, 27, 574-586.

Patterson, J.H., & Harvey, R.T.(1979). An implicit enumeration algo-rithm for the time/cost trade-off prob-lem in project network analysis.Foundations of Control Engineering, 6,107-117.

Robinson, D.R. (1975). A dynam-ic programming solution to cost/timetrade-off for CPM. Management Science,22, 158-166.

Schwindt, C. (1995). A new prob-lem generator for different resource-con-strained project scheduling problems withminimal and maximal time lags (WIOR-Report-449). Karlsruhe, Germany:University of Karlsruhe, Institut fürWirtschaftstheorie und OperationsResearch.

Siemens, N. (1971). A simple CPMtime/cost trade-off algorithm.Management Science, 17, B-354-363.

Siemens, N., & Gooding, C.(1975). Reducing project duration atminimum cost: A time/cost trade-offalgorithm. OMEGA, 3, 569-581.

Skutella, M. (1998).Approximation algorithms for the dis-crete time-cost tradeoff problem.Mathematics of Operations Research, 23,909-929.

Vanhoucke, M. (in press). Newcomputational results for the discretetime/cost trade-off problem with time-switch constraints. European Journal ofOperational Research.

Vanhoucke, M., Demeulemeester,E., & Herroelen, W. (2002). Discretetime/cost trade-offs in project schedul-ing with time-switch constraints.Journal of the Operational ResearchSociety, 53, 1-11.

Vanhoucke, M., &Demeulemeester, E. (2003). The appli-cation of project scheduling techniquesin a real-life environment. ProjectManagement Journal, 34(1), 30-42.

Vercellis, C. (1990). Multi-projectscheduling with time-resource-costtrade-offs: A tactical model. Proceedingsof the Second International Workshop onProject Management and Scheduling,June 20-22, Compiègne, France.

Walker, M.R., & Sayer, J.S. (1959).Project planning and scheduling (Report6959). Wilmington, DE: E.I. duPont deNemours and Co.

Wiest, J.D., & Levy, F.K. (1977). Amanagement guide to PERT/CPM: WithGERT/PDM/DCPM and other networks.New Delhi, India: Prentice-Hall, Inc.

MARIO VANHOUCKE holds a PhD in applied economics and is currently professor of operations management at the

Operations and Technology Center of the Vlerick Leuven Gent Management School, and on the faculty of economics and

business administration at Ghent University in Belgium. He teaches courses in optimization, statistics and project man-

agement. His main interest is in optimization modeling and project scheduling under resource constraints with finan-

cial implications.

ANN VEREECKE holds degrees of Civil Engineer and Doctor in Management from Ghent University. In 1993-94, she fol-

lowed the doctoral program at INSEAD (France). She lectures at the faculty of economics and business administration

at Ghent University and at Vlerick Leuven Gent Management School, where she is also the director of the Master in

General Management program and head of the operations and technology management center. Her main interests are

production planning, inventory management systems and production strategy. She specializes in global manufactur-

ing strategy and supply chain management.

PAUL GEMMEL holds a doctorate in applied economics from Ghent University. He was a visiting research fellow at the

College of Business of Arizona State University, Arizona, USA (1992-93). He is a professor of economics and business

administration at Ghent University and at Vlerick Leuven Gent Management School. Dr. Gemmel is Director of the

MINOZ Research Centre for Hospital Management of Vlerick Leuven Gent Management School. He is involved in the area

of service (operations) management.


COVER TO COVERKenneth H. Rose, PMP, Book Review Editor

35 years. However, one of the dangers of being an “old hand” isthat it is tempting to fall back on the knowledge and insightsyou developed in the good old days. I know about the strengthof this temptation, because I became a project manager morethan 30 years ago, and I understand that it is painful to contin-ually adopt new perspectives and toss away favored tools andinsights that have grown obsolete!

Hamilton does not succumb to this danger. His work is up-to-date. For example, he is fully aware of the differences in theproject management perspectives of the Project ManagementInstitute and the Association for Project Management, the UKorganization that sponsors this book. He describes how, in put-ting the book together, he has attempted to serve the sensibili-ties of both communities to the extent possible. Anotherexample: his treatment of the Earned Value Management Systememploys current terminology, which, in recent years, hasreplaced the terminology project managers have been usingsince the 1960s. Yet another example: I was especially pleased tosee that he has a thorough grasp of the role of the project spon-sor. Project sponsors are hot today. However, too many expertsand ordinary practitioners confuse the role of the project spon-sor with that of the project owner (i.e., the individual who paysthe bills). The sponsor’s job is to simultaneously serve the inter-ests of senior management (by making sure the project and itsteam address project and business requirements effectively) andthe needs of the project team (by making sure they receive thesupport needed to deliver project solutions effectively). Projectowners, in contrast, are important customers. More often thannot, they lack the objectivity required to carry out the sponsor-ship function properly.

It should be noted that this book is not a handbook of proj-ect management tools and techniques. It says nothing abouthow to create a PERT/CPM chart! As its title indicates, it focuseson project management procedures. That’s fine with me. Theshelves of bookstores are bending under the weight of books dis-cussing project management tools and techniques. However,there is a notable absence of practical works addressing the iden-tification and use of good procedures on projects. This bookdoes a fine job of filling this gap.

Thomas Telford Publishing, 2004, ISBN: 07277-3258-7, hardcov-

er, 386 pp.

Reviewed by J. Davidson Frame, PhD, PMP, Academic Dean,

University of Management and Technology, Arlington, VA USA

A lbert Hamilton has produced a good,old-fashioned handbook—a no-non-

sense work that is long on information, andshort on panache. Geared toward the prac-titioner and not the scholar, its principalgoal is to provide answers to questionspractitioners raise, so that the practitionerscan employ their newly gained knowledgeto do their jobs effectively. It is a “how-to”book in the clearest sense.

Hamilton’s Handbook of Project Management Procedures hasall the traits of the classic, good old-fashioned handbook. Forexample, it contains an abundance of template forms that proj-ect teams can use on their projects (e.g., change request forms,project audit forms, and risk response tracking forms). I find thatforms like these serve at least two important functions. Thesuperficial value of these forms is that readers can adopt themfor use in their own organizations. I have reviewed every form inHamilton’s book and am impressed by the quality of each ofthem. I would have no problem taking appropriate forms con-tained in the book, adjusting them slightly to meet my needs,and then employing them in my organization. Why reinvent aform when excellent ones are readily accessible?

A second function of these forms is that they are learningtools. Each form is more than a piece of paper with words on it.Each one, in fact, is an attempt to capture an organization’s busi-ness processes. Consequently, by carefully studying a form, youcan develop a deep understanding of the whats, whys, and howsof your project business. For example, the risk response trackingform reminds you that risks should be categorized qualitatively(e.g., according to likelihood and impact) and that responsestrategies should be identified (e.g., risk mitigation, transfer,acceptance, avoidance).

This book is not just a collection of forms. Hamiltonaddresses 58 specific procedures employed on a typical capitalproject. They are organized under 10 broad categories (e.g., com-munications, cost, human resource, procurement). For each ofthe procedures, he provides an annotated outline of what theyfocus on, a brief tutorial covering key concepts addressed by theprocedures, pertinent template forms, process flows (whenappropriate), and exhibits illustrating how the procedures areapplied in real organizations.

When going through the book, it is easy to tell that itsauthor is a seasoned professional. In the Preface, Hamiltonrelates how he has been in the project management business for

HANDBOOK OF PROJECT MANAGEMENT PROCEDURESBY ALBERT HAMILTON


AGuide to the Project ManagementBody of Knowledge (PMBOK®

Guide)—Third Edition is another sig-nificant step forward in the evolutionof project management as a disci-pline and profession. Several years inthe making, this Third Edition of theworldwide de facto standard for proj-ect management is more complete,better organized, and easier to read.

At 398 pages, the new edition isalmost twice as long as its immediate predecessor. Itincludes new material, updated and revised material, and asubtly revised format. However, the fundamental format(including chapter and section numbering) was retainedbecause of its practicality. Small changes in spacing, use ofbullets, and indentation make the text more visually appeal-ing and accessible. As stated, this new edition is simply eas-ier to read.

The great breakthrough in this edition is the separationof the standard from implementing guidance. In managingprojects, it’s not what you know, it’s how you apply whatyou know that matters most. It’s the process, not theKnowledge Areas that make a difference. Previous editionshave focused on Knowledge Areas, with brief considerationof how individual processes fit together into a larger wholeduring implementation. Readers looking for a standard—and that word carries with it certain expectations—probablydidn’t find one. Instead, they found extensive descriptionsof how to do something, but precious little guidance aboutwhat to do overall.

That is now all changed. The Third Edition includes anew Chapter 3 dedicated to the five Process Groups thatinteract during project implementation: Initiating,Planning, Executing, Monitoring and Controlling, andClosing. This chapter stands alone in a section entitled, “TheStandard for Project Management of a Project.” In doingthis, PMI has adopted an approach similar to that of the ISO9000- and 14000-series international consensus standards,which include a brief document that specifies a frameworkcoupled with a more extensive document that provideshow-to guidance.

Chapter 3 is augmented with moderately complex flowcharts that disclose the interactions within and betweenProcess Groups. These charts provide a much-needed basefrom which practitioners may operate and from which thediscipline may evolve in the future.

Evolution is essential and PMI has taken the first step.While the standard has been separated, it is still too descrip-tive in nature. The next edition of the PMBOK® Guide should

include a prescriptive standard that provides a generalframework for managing projects in any domain.

As before, the nine Project Management KnowledgeAreas make up the majority of material. Readers familiarwith the previous edition will notice some changes. Sevenprocesses have been added and two have been deleted,resulting in a new total of 44. Thirteen processes have beenrenamed, all in a verb-object format—“Select Sellers,” forexample—that adds clarity and better reflects the action ori-entation of a process. Extension of the verb-object format toall other processes would be a beneficial next step.

Knowledge Area revisions result from more than justtinkering with words. The update team moved someprocesses from one Knowledge Area to another, achieving amore logical organization—one that better represents actu-al practice. This is most evident in the Project IntegrationManagement Knowledge Area, which now consists of sevenprocesses beginning with “Develop Project Charter” andending with “Close Project.” Project ProcurementManagement is another area of obvious change. The sixprocesses are functionally the same as those in the previousedition, but newly named to better describe expected out-comes. Also, the role of the seller has been added to ProjectProcurement Management.

Alas, in one small way, the Third Edition disappoints.Some of the graphics are not on par with the excellence ofthe written content. For example, the illustration of a controlchart in Project Quality Management is so simple and sogeneric that it communicates little of value to readers. A morecomplete chart could be created using common word pro-cessing software in about 10 minutes. Most egregious of all,the illustration of a decision tree in Project Risk Managementis missing an essential step—the calculation of expectedmonetary value by multiplying probability times impact andthe subsequent addition of all branch results. Absent thisstep, readers are likely to come to a screeching halt in theirlearning. Inconsistencies in monetary values shown in theillustration further contribute to reader confusion.

Ignoring the few shortcomings—all of which may beeasily fixed in the next printing—the PMBOK® Guide—ThirdEdition is a noteworthy advancement of the state of projectmanagement art and science. It provides further codificationof principles and practices and establishes a firm foundationfor the next improvement leap.

Project Management Institute, 2004, ISBN: 1-930699-45-X,

paperback, 398 pp., $39.95 Member, $49.95 Nonmember

Reviewed by Kenneth H. Rose, PMP, director, Peninsula

Center for Project Management in Hampton, VA, USA

A GUIDE TO THE PROJECT MANAGEMENT BODY OFKNOWLEDGE (PMBOK® GUIDE)—THIRD EDITIONBY PROJECT MANAGEMENT INSTITUTE


BREAKTHROUGH IT CHANGE MANAGEMENT: HOW TO GETENDURING CHANGE RESULTSBY BENNET LIENTZ AND KATHRYN P. REA

Managing change is crucial to thefuture prosperity of most

organizations, and the area ofchange management has been gain-ing in prominence over the lastdecade. However, despite the focuson introducing change, the ITdomain has been slow to grasp thepotential of using change manage-ment to improve the success rate ofprojects. The current offering fromLientz and Rea, Breakthrough ITChange Management: How to GetEnduring Change Results, attempts toimprove the track record of IT proj-

ects through the introduction of a comprehensive framework foraddressing change.

The book begins by reminding readers that at least half ofprojects aimed at introducing new IT systems, inventions, andgovernment programs fail to be implemented, or fail to deliverthe promised change. The typical approach to change manage-ment focuses on a complex process, rife with new jargon, andoverly concerned with the management perspective. Lientz andRea attempt to counter the trend by invoking a flexible and adap-tive approach, and involving the people doing the work. Morecrucially, they are concerned with the continuity of change:change management is not just about getting the change in; it isalso about keeping it in, and adapting and changing as workcontinues.

The book is organized into four sections that can be sum-marized as:

• Developing a strategy for change management• Preparing for implementation• Establishing the change (and keeping it going)• Applying the principles in different contexts and

environments.The first section is particularly important, as it addresses

many of the key issues, including political and cultural factorsthat impact the success of a change management effort. The keypremise is that positive change can improve people’s lives.Change is neither forced nor imposed. In order to derive benefitfrom change, thoughtful planning and careful implementationmust be augmented by consultation with, and involvement of,people affected by the changes. The authors show a keen under-standing of organizational dynamics, politics, and resistance tochange, offering a range of methods for overcoming such barriers.

Lientz and Rea shy away from applying a “big bang”approach to change, emphasising the implementation ofchange in stages to encourage confidence, ownership, andfamiliarity, and to capitalize on the incremental benefit.Visibly focusing on the derived benefits and their accumula-tion encourages participation and collaboration across theorganization.

The following two sections provide activities, procedures,tools, and important lessons for planning and implementingchange. Unlike many other books that conclude with theimplementation of change, this book extends to cover sustain-ing changes and deriving benefit beyond the initial changeeffort—indeed, the ultimate implementation chapter is fol-lowed by five additional chapters. Following implementation,the focus of the effort can shift to measuring results and gener-ating enthusiasm, as these provided the key reason for embark-ing on change in the first place. Decay is a natural part of life:the chapter on preventing deterioration and expanding thechange effort points to the special flavor offered by the authorsand to their unique perspective of viewing change as a contin-uous activity.

The final section tailors the lessons to the specific domainsof implementing new technology and systems, and to E-businesssuccess. It also provides a discussion of common pitfalls associ-ated with change management, offering various tactics for reso-lution and prevention of each. According to the authors, theapproach has been applied successfully in over 70 organizationsin more than 20 countries (covering a range of cultures and lan-guages). The book provides a framework of templates requiredfor preparing, managing and monitoring a successful changemanagement effort.

The book is suitable for the practitioner community withan interest in managing change. It is particularly useful for ITconsultants, managers, and top developers interested in look-ing beyond the technical factors associated with IT projects.The book is peppered with examples, checklists, and tools thatcan be applied in practice, without a need to resort to tedioustheory or models. The final chapter, which can be viewed as auser manual for change managers, offers a useful resource foridentifying and dealing with typical problems.

Extending some of the lessons from the book would prob-ably reveal that adopting a perceptive, project-orientedapproach to change is an important first step towards master-ing change and dealing with change as an ongoing aspect ofgrowth and development. It may also offer leverage towardsdealing with IT projects and improving their success rate in acompetitive and change-intensive reality. The true value ofchange management may remain in continuously lookingbeyond the boundaries of discrete projects and in trying toresolve this tension.

Elsevier Butterworth-Heinemann, Oxford, 2004, ISBN: 0-7506-

7686-8, paperback, 335 pp, $42.70 Member, $44.95

Nonmember

Reviewed by: Dr. Darren Dalcher, Professor of Software Project

Management and head of the Software Forensics Centre at

Middlesex University, London, England, and Visiting Professor

of Computer Science at the University of Iceland


THE COMPLETE PROJECT MANAGEMENT OFFICE HANDBOOKBY GERARD M. HILL

G erard M. Hill’s The CompleteProject Management Office

Handbook is one of the latestadditions to a growing body ofliterature on a topic of increas-ing interest to project managers.The term “handbook” oftenconnotes a collection of looselylinked articles on a central sub-ject, written by various authorsand cobbled together by a sin-gle editor. Not so, here. Hill’sbook is a comprehensive, con-tinuous exposition of concepts

and methods that may be put in practice when imple-menting a project management office (PMO) of any sizein any domain.

This book differs from other PMO texts in that it is fun-damentally a toolbox—a collection of application methodspresented in an integrated sequence that guides readers asto what they should do and how they should do it. Theauthor establishes the context for these methods in a briefintroduction that describes a PMO as an organizationalentity intended to help achieve one or all of the operationalobjectives of project management oversight, support, andcontrol.

Hill approaches the PMO from two perspectives thatprovide an organizing framework for the book. First, hedescribes a five-stage model of PMO capabilities along acompetency continuum. The stages are progressive, repre-senting PMO development within an organization. Thesefive stages are linked to project management maturity,advancing from oversight and control at the low end, tostrategic business alignment in a fully mature project man-agement environment.

The five stages in the PMO competency continuum areproject office, basic PMO, standard PMO, advanced PMO,and center of excellence. Hill describes the capabilities ateach stage, explaining that capabilities at any given stageinclude those of all previous stages. He also explains thatstage 5 capability is not necessarily a goal of all organiza-tions. Stage 3 capability—standard PMO—may be morethan adequate for most organizations.

In the second perspective, Hill describes 20 functionmodels that may be used to develop PMO capabilities. Headvises that his models are not inflexible prescriptions; theymust be refashioned and adapted to the organization inwhich they are applied. He notes that the functions are notstrictly serial. They overlap and interact in complex ways.

Hill groups the function models into five categories:practice management, infrastructure management, resourcemanagement, technical support, and business alignment.Readers should not assume upon first look some kind ofmapping between the five categories of function modelsand the five stages of the PMO competency continuum. Thefunction models generally cut across all stages of the con-tinuum, although some are more relevant at one stage thananother. The author also points out that an individual PMOwill not likely employ every function model. Unique busi-ness circumstances drive project management needs,which, in turn, define PMO functions.

Readers may view many of the models as basic businesspractice. Hill states up front that this is not unwarranted.The models represent what a PMO does, not what a projectmanager does. A basic premise of the book is that a PMO isa business integration activity. It is not intended to replacebusiness functions or departments, but rather to work with-in the organization to facilitate or adapt business function-ality in the project management environment.

The models themselves are the real strength and realvalue offered by this book. Each is presented in a separatechapter using a common format that begins with a briefoverview and continues with a discussion of project man-agement interactions, business environment interactions,and functional area activities across the PMO competencycontinuum. A detailed, comprehensive discussion follows,with activities presented as action statements—specificthings to do. In complex models, the action statements aresubdivided into categories that include another set ofaction statements. Each chapter closes with some briefinsights as to how the model might be employed in a mod-estly sized PMO.

Evolution of literature related to a new technical topicseems to proceed in a regular way. It begins with a coales-cence of concepts, continues with a codification of basicprinciples, and closes with a definition of methods andtools. So it is with the PMO. The Complete ProjectManagement Office Handbook is certainly not the last wordin this developing area. But it stands above other contem-poraneous texts with its inclusion of practical, preciseactions that project managers may apply to implement aproject management office.

Auerbach Publications, 2004, ISBN: 0-8493-2173-5, hard-

cover, 682 pp., $85.45 Member, $89.95 Nonmember

Reviewed by Kenneth H. Rose, PMP, director, Peninsula

Center for Project Management in Hampton, VA, USA


Guidelines for Project Management Journal Book Reviews

Selecting Books for Review

Project Management Journal welcomes recommendations from project managers and others regardingbooks that may be of professional value to fellow PMI associates. Areas of potential interest include:new ideas about the theory, concepts, and techniques of project management; new approaches totechnology and management; getting business results; competing in today’s complex workplace; andglobal changes. Recommendations should include the title, author, and publisher, and a brief state-ment as to why the book should be considered for review. The Journal will select books for review andidentify a reviewer. Individuals recommending books for review may also volunteer to write the review.However, individuals should not submit a review before the Journal has selected the book. The Journalreceives many books from publishers and authors and cannot review them all.

Guidelines for Writers

Reviews should begin with a strong, brief opening paragraph that identifies the book and author, and tellsthe reader why the book is important. The review should not only describe the content of the book, but alsowhat the content means; that is, why it is a contribution to the project management body of knowledge.Reviewers may include the following elements:� A summary of key or unique concepts� Favorite quote, graphic, chart, etc.� Important tips or guidelines� New terms or phrases, such as “knowbots” or “teamocracy”� Message from the book that should be remembered for future use, or should have been disclosed

years ago.

Reviews should include the book’s strong points and any weak points if this information will be usefulto the reader. Reviews should be written in a conversational style that maintains academic rigor.Reviewers should avoid use of the first person (“I”) and focus on the book and its contents. Reviewersshould also avoid use of extensive lists as a means of describing or duplicating content. Instead, focuson what the content means to readers. Reviews should be no longer than 750 words (please use yourcomputer word count to verify length of the review).

Reviews should include complete publishing information, if possible: title, author(s), publisher (city andstate), year published, ISBN number, total pages, and price in U.S. dollars. The Journal will add any infor-mation that is not available to reviewers.

Reviews should be prepared using MS Word and may be submitted by e-mail (preferred) or on CD. Submissionsshould include the name, title, company, address, phone/fax/e-mail, and brief (one or two sentence) biosketchof the reviewer. Reviews should be submitted to Natasha Pollard at [email protected]

or via mail to: Project Management Journal

Book Review Editorc/o PMI Publishing Department

Four Campus BoulevardNewtown Square, PA 19073

PMI reserves the right to edit all material submitted for publication.

THE DEADLINE HAS BEEN EXTENDED!

CALL FOR NOMINATIONS FOR

THE PMI EDUCATIONAL FOUNDATION’S2005 STUDENT PAPER AWARDS

An award recognizing excellence in student development of original concepts in project management.

Purpose: To recognize and honor two students – one graduate and one undergraduate – for research and creativeefforts directed toward advancing the concepts, tools, and techniques of managing project-oriented tasks.

Eligibility: Any individual who is, or was, a student in good standing at an institution of higher learning duringthe period covered by the nomination.

Qualifications: Any paper dealing with an original concept and related to any aspect of the management of proj-ects will be considered. Papers must be written by a single author, completed after October 2003, and not previ-ously accepted for publication.

Nomination Procedure: Students must submit abstracts of not more than 1500 words for receipt by 31 March2005. The abstracts should propose the subject and concept to be addressed by the paper. Abstracts will containonly the title of the proposed paper and must be accompanied by a separate letter containing the author’s name,address, institution, major course of study, and expected degree. If the paper has been completed, the date of com-pletion must be included in the letter.

A candidate must be nominated/sponsored by an educator at the institution of higher learning at which the nom-inee is, or was, a student in good standing. A letter of recommendation from the student’s sponsoring facultymember must accompany the abstract.

Selection: Initial selection from abstracts and final selection of the winning paper(s) will be made by a panel ofthree- to-five experts in project management. These experts will place emphasis on originality of presented con-cept, applicability to the field of project management, practical applications of the concept, and suitability forpresentation to PMI Congress participants.

Selected candidates will be notified of their selection as a finalist via formal letter from the PMI EducationalFoundation by 1 May 2005. Completed papers must then be submitted before 31 May 2005. The panel of expertswill select the winning paper(s) from among the finalist candidates by 30 June 2005. PMI reserves the right to electnot to present an award in 2005 on the basis of abstracts received.

The Panel: The panel will consist of a combination of practicing project managers, consultants in project man-agement, and members of the academic community.

Frequency and Number: Not more than two Student Paper Awards may be awarded annually.

Award: The award recipient(s) and sponsoring faculty member(s) will receive travel and hotel expenses to a PMICongress and a cash award of US $500. The winning paper will be presented at a session of a PMI Congress.

Presentation and Recognition: Student Paper Awards will be formally presented at a PMI Congress. . Photographsand biographical information of the Student Paper Award recipients will be published in PMI Today, and the paperwill be published in the Project Management Journal.

Abstracts must be received at PMI by 31 March 2005, and should be addressed to:Diane FrommPMI Educational Foundation, Four Campus BoulevardNewtown Square, PA 19073-3299 USA+1-610-356-4600 ext 1128 / Fax [email protected]


CALENDAR OF EVENTS

MARCH 2005

2-3 March

Business Performance & Project Management (BPPM) 2005 (for-

merly ProjectWorld). London, United Kingdom. Will run along-

side Softworld Accounting & Finance and Softworld HR &

Payroll. For more information, please visit www.bppm.com

14-15 March

Business Knowledge Consortium’s Project Portfolio

Management National Conference. Reston, Virginia, USA. Event

will include personalized assessments for attendees’ project

portfolio management challenges. For more information, please

visit www.bkc-inc.com/html/ppm_summit.htm

14-17 March

Delivering Results Through Project and Programme

Management. London, United Kingdom. Conference from 15-16

March. Also: 14 March—Benefit Realisation Management: A

vehicle for transformational change, and Improved Decision

Making with Earned Value. And: 17 March—Value Management

and Balanced Scorecard for Project Managers. 15 percent dis-

count for PMI members. For more information, please visit

www.unicom.co.uk/pmconference

14-18 March

Program Management Mastery (PMM) Program. Atlanta, Ga.,

USA. For more information, please visit www.pmlg.com

APRIL 2005

4-6 April

2nd Annual Project Management for Biopharmaceuticals

Meeting. Co-sponsored by PMI Pharmaceutical Specific Interest

Group and IIR-USA. Dallas, Texas, USA. For more information,

please visit www.iirusa.com/pmb

15-17 April

International conference on project management, Gyan Lahari

(Knowledge Waves), sponsored by PMI Pearl City Chapter.

Hyderabad, India. Inauguration by Dr. A.P.J.Abdul Kalam,

Honorable President of India. For more information, please visit

http://conference.pmi-pcc.org

18-21 April

PMI SeminarsWorld®. Scottsdale, Ariz., USA. For more informa-

tion, please visit SeminarsWorld Homepage

22-23 April

First Annual 2005 PMI Tennessee Regional Symposium. Hosted

by PMI Nashville Chapter. Nashville, Tenn., USA. Educational

tracks in People, Process and Technology. Networking opportu-

nities, job fair and exhibit hall. For more information, please

visit www.pminashville.com, or e-mail symposium@pmi-

nashville.com

25-28 April

PMI SeminarsWorld®. Chicago, Ill., USA. For more information,

please visit SeminarsWorld Homepage

MAY 2005

1-2 May

PMI New Jersey Chapter Annual Symposium. Edison, N.J., USA.

For more information, please visit www.pminj.org

3 May

PMI Honolulu Chapter Professional Development Day 2005:

“Project Management: Today and Tomorrow.” Honolulu, Hawaii,

USA. Keynote is “Making PM Indispensable for Business

Results.” Speaker is Ms. Linn Wheeling, CAE, PMI Components

and Community Manager. For more information, please visit

www.pmi-honoluluchapter.org/

4-7 May

EURAM 2005, “Responsible Management in an Uncertain

World.” Management research conference will feature a project

management track titled “The Management of Projects:

Reconciling Uncertainty and Responsibility.” All papers present-

ed in the track will be considered for the September 2005 issue

of Project Management Journal. Munich, Germany. For more

information, please visit www.euram2005.de.

11-13 May

PMI College of Performance Management 21st Annual

International Conference. Hilton Long Beach, Long Beach,

California, USA. For more information, please visit www.pmi-

cpm.org or call +1-703-370-7885

13-14 May

2005 Rocky Mountain Project Management Symposium/2005

REP Forum. Symposium sponsored by PMI Mile-Hi Chapter.

Denver, Colorado, USA. Keynote speakers include Tom Peters

and Tim Sanders. PMI Registered Education Providers (R.E.P.s)

are invited to attend the 2005 REP Forum on 14 May at the

same location. This exclusive event is for R.E.P.s. For more infor-

mation and registration information, please visit the REP

Community site (http://rep.pmi.bluestep.net/)

18 May

PMI Israel Chapter, 9th annual Flagship Event. Tel Aviv, Israel.

For more information, please visit www.pmi.org.il

23-25 May

PMI Global Congress 2005—EMEA Region. Edinburgh, Scotland.

For more information, please visit

http://congresses.pmi.org/Europe2004/Closed.cfm

23-26 May

Dekker, Ltd. Annual Project Portfolio Management Forum™

2005. San Diego, Calif., USA. For more information, please visit

www.dekkerltd.com


www.bppm.com

www.unicom.co.uk/pmconference

www.pmlg.com

www.iirusa.com/pmb

http://conference.pmi-pcc.org

www.pminashville.com

www.dekkerltd.com

http://congresses.pmi.org/Europe2004/Closed.cfm

http://rep.pmi.bluestep.net/

www.pmi-cpm.org

www.euram2005.de

www.pmi-honoluluchapter.org/

www.pminj.org

http://www.bkc-inc.com/

www.pmi.org.il

SCOPEProject Management Journal is the professionaljournal of the Project Management Institute. Themission of the Journal is to advance the state ofthe art of the knowledge of project and programmanagement. The Journal presents useful infor-mation on both theory and practice in the fieldof project management. Authors are encouragedto submit the following types of original manu-scripts: descriptions of innovative practices; sum-maries of research results; reviews of currentliterature; surveys of current practices; criticalanalyses of concepts, theories, or practices; devel-opments of concepts, theories, or practices;analyses of failure. Manuscript length should notexceed 12,000 words. The selection of manu-scripts for publication is based on the extent towhich they advance the knowledge and under-standing of project management. PMI neitherapproves nor disapproves of any data, claims,opinions, or conclusions presented.

MANUSCRIPT REVIEWProject Management Journal uses a double-blindreview process. The first review of every manu-script is performed by two anonymous referees(usually members of the Editorial ReviewBoard). The manuscript is then either accepted,rejected, or returned to the author for revision(with reviewer comments furnished to theauthor). Revised manuscripts are sent to theEditor, who makes a final disposition in con-sultation with the Publisher. The Journal strivesto respond to all authors within three monthsof the date the manuscript is received at thePMI Publishing Department. Accepted manu-scripts are subject to editorial changes. Theauthor is solely responsible for all statementsmade in the manuscript, including editorialchanges.

ORIGINAL PUBLICATIONIt is the policy of PMI to be the sole, original pub-lisher of manuscripts. Manuscripts that have beensubmitted simultaneously to other magazines orjournals will be rejected outright and will not bereconsidered. Republication of a manuscript,possibly revised, that has been disseminated viaconference proceedings or newsletter is permittedif the Editor judges there are significant benefitsto be gained from publication.

COPYRIGHTUpon acceptance of a manuscript, authors willbe asked to transfer copyright of the article to thepublisher. This transfer will ensure the widestpossible dissemination of information. Thistransfer of copyright enables PMI to protect thecopyrighted material for the authors, but doesnot relinquish the author’s proprietary rights.The copyright transfer gives PMI the exclusiverights to republish or reprint the manuscript inany form or medium as well as to grant or refusepermission to third parties to republish all orparts of the manuscript.

Notes for Authors

SHORT ITEMSShort items do not need rigorous academicscrutiny and are not refereed. Upon receipt, how-ever, these items become the copyright propertyof PMI.� Opinion presents thoughtful discussion ofproject management issues. � Correspondence pertains to the project andprogram management profession, including ref-erences to literature, practice, and scholarship aswell as discussion and replies related to articlespublished in the Journal. � Book Reviews express opinions about booksrelated to the project management profession, orabout general management or technical booksthat cover topics of particular value to the projectmanager.� Calendar of Events offers notices of forth-coming meetings and calls for papers.

SUBMISSIONSAll manuscripts must be submitted electronical-ly either by e-mail to [email protected] on CD and sent to: Project ManagementJournal, Attn: Natasha Pollard, 4 Campus Blvd.,Newtown Square, PA 19073 USA. If you submityour manuscript on CD, please include a print-out of the manuscript, including all tables andfigures, on 8-1/2 x 11 inch paper, double spacedthroughout, and printed on one side only.Manuscripts should include the following in theorder listed: � A title page that includes the title of themanuscript and each author’s name, affiliation,mailing address, and phone, fax, and e-mailaddress. Correspondence will be directed only tothe first author listed. � An abstract of 100 words or less that out-lines the purpose, scope and conclusions of themanuscript, and selected keywords.� Text (use headings and no more than twolevels of subheadings). To permit objectivereviews by two referees, the abstract and firstpage of the text should not reveal the authorsand/or affiliations, but only the manuscript title. � References.� Illustrations and Tables. These should be titled,numbered (in arabic numerals and captions), andeach on a separate sheet, and the preferred locationindicated within the body of the text.� Biographical details of each author.Upon manuscript acceptance, authors must alsoprovide a black-and-white passport-style photo-graph and a signed copyright agreement.

COMPUTER-GENERATED TEXT AND ILLUSTRATIONSAuthors are requested to submit the final textand illustrations via e-mail or on CD. As with therequirements for manuscript submission, themain text, list of references, table and illustrationcaptions, and author biographies should bestored in separate text files with clearly identifi-able file names. Keep the layout of the text assimple as possible and save text in its original

applications and/or Rich Text Format (RTF). It isessential that the name and version of the wordprocessing program and format of the text files areclearly indicated (example: Word for Windows2000 doc). The electronic version should only besent with the final accepted version of the paper tothe Editor. NOTE: The hard copy and electronicfiles must match exactly.

Upon acceptance of the manuscript forpublishing, authors will also be asked to provideillustrations placed or embedded within theirchosen word processing program. If this isn’tpossible, please submit illustrations in theirnative programs. Be sure to include a hard copyas well. PMI now recreates all illustrations, fig-ures and tables electronically for publication. Bydoing so, the publication is ensured a consistentlook thoughout. Although this makes electronicversions of illustrations less important, a hardcopy becomes crucial for re-creation purposes.Contact PMI’s Publishing Department for fur-ther details.

STYLE OF TEXTYou should write in clear and concise English.Spelling should follow Webster’s New WorldDictionary. Authors whose native language is notEnglish are assured that in-house editorial atten-tion to their manuscript will improve clarity andacceptability to readers. For questions regardingstyle and format of text, refer to the PublicationManual of the American Psychological Association,Fifth Edition.

REFERENCESFor questions regarding reference format, referto the Publication Manual of the AmericanPsychological Association, Fifth Edition.References used in the text should be identifiedby author name and publication date in paren-theses, e.g., (Cleland & King, 1983), and listedalphabetically at the end of the manuscript.Page numbers should be cited for all quota-tions. Follow the format example shown below:

Baker, Bud. (1993). The projectmanager and the media: Some les-sons from the stealth bomber pro-gram. Project Management Journal, 24(3), 11–14.

Cleland, David I., & King,William R. (1983). Systems analysisand project management. New York:McGraw-Hill.

Hartley, John R. (1992).Concurrent engineering. Cambridge,MA: Productivity Press.

Please ensure that references are complete, thatthey include, where relevant, author’s name,article or book title, volume and issue number,publisher, date and page reference.

The use of page footnotes should be keptto a minimum. Footnotes should be numberedconsecutively and listed at the end of the textas endnotes.



KEYWORDSKeywords categorize your manuscript. They cover project management methodologies and processes, tools and techniques, PMBOK® Guideknowledge areas, industries, types of projects, geography. Please list three or four keywords that best categorize your manuscript. Choosefrom the following list of suggested keywords (this is not a comprehensive list) or you may use your own.

PMI Professional Awards Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C2

PMI Career Track . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C3

PMI Global Congress EMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C4

Index of Advertisers

AccountingActivity Duration EstimatingAgricultureArrow Diagramming MethodBaselinesBenchmarkingBenefit/Cost AnalysisBudgetingChange ControlCommunications ManagementConcurrent EngineeringConfiguration ManagementConflict ResolutionConstraintsConstructionContingency PlanningContract CloseoutCost EstimatingCost ManagementCritical PathDelegationDeliverablesDesignDocumentationEarned ValueEngineeringEnvironmentEstimatingFast-TrackingFeedbackFinanceFloatFundingHuman Resource ManagementInformation SystemsIntegration ManagementLarge ProjectLeadershipLife-cycle CostingManufacturingManagement SkillsMatrix OrganizationMilestonesMitigationMonte Carlo Analysis

Multiproject PlanningNegotiatingNetworkingNew Product DevelopmentOrganizational PlanningOrganizational StructureParametric ModelingPerformance ReportingPharmaceuticalsProcurement ManagementProductivityProject Life CycleProject Management SoftwareProject Plan DevelopmentQuality AssuranceQuality ManagementReengineeringResource PlanningResponsibilityRisk ManagementRisk Response DevelopmentSchedule DevelopmentSchedule ControlScope ManagementScope DefinitionScope Change ControlSimulationStaff AcquisitionStakeholdersStandardsStatistical SamplingTeam DevelopmentTime ManagementToolsTrainingTransportation VarianceUtilitiesVirtual OrganizationWork Breakdown StructureWork Packages

CHECKLIST� Manuscript via e-mail or on CD� 100-word abstract� Illustrations� Author biographies� Black and white author photographs

(upon acceptance)� Signed copyright agreement

(upon acceptance)

REVISIONSCorrespondence and files for revision will be sent to the first-named author unlessotherwise indicated. Copyediting ofmanuscripts is performed by PMI staff. The authors are asked to check edited files fortypographical errors and to answer queriesfrom editors. To improve publication times itis important that revised files be returnedwithin three days. Excessive turnaround timemay jeopardize publication of papers.

COPIES AND REPRINTSAuthors will receive 10 copies of the Journalfree of charge. Additional copies of the Journaland/or article reprints can be ordered at anytime from PMI.

Project Management Institute Publishing Department4 Campus Blvd.Newtown Square, PA 19073 USATel: 610/356-4600 ext. 1135Fax: 610/355-1633E-mail: [email protected]

Career Track is a new biannual supplement to PM Network® that will give projectmanagers—both new and mature professionals—information, tips and ideas tohelp advance their careers. The first issue will feature:

• Leadership Skills

• Global Careers

• Work/Life Balance

• Interview Pointers

• Career FrameworkIntegration

Through this exciting publication, PMI will provide valuable advice to maximizecareers at any level. Look for its debut in the May issue of PM Network.

careertrack

© 2005 Project Management Institute, Inc. All rights reserved. "PMI", the PMI logo, and "PM Network" are registered marks of the Project Management Institute, Inc. 075-009-2005 (03-05)

Making Project Management Indispensable for Business Results.TM

coming in may 2005…

Making Project Management Indispensable for Business Results

EDINBURGH, SCOTLAND

Location: Edinburgh InternationalConference Centre and Sheraton Grand Hotel

Features: Keynote Address, Presentationsin 8 Areas of Focus, NetworkingReceptions, Exhibition Hall

PMI Leadership Meeting, 21-22 May

PMI SeminarsWorld®, 26-27 May

Visit www.pmi.org

www.pmi.org

®

Project Management Institute

For more information visit www.pmi.org; call +32-2-743 15 73;or e-mail [email protected]

© 2005 Project Management Institute, Inc. All rights reserved. “PMI”, the PMI logo, and “SeminarsWorld” are registered marksof the Project Management Institute, Inc. 020-053-2004 (03-05)

Making Project Management Indispensable for Business Results.™