System Dynamic Modeling in Project Management
Prof. Padmanav Acharya
National Institute of Industrial Engineering (NITIE), Mumbai
The use of dynamic simulation through feedback control addresses managerial, organizational, and socio-economic problems in project management. System dynamics (SD) can be applied as a research tool to manage long-term plans, take policy decisions, analyze growth trends, and act as a tool to model large systems.
Business dynamics in information technology depends on hiring and attrition rates, and impacts productivity and delivery. Factors, such as rework due to errors and new work due to scope change, add to existing work, and contribute to delivery delay. The SD model encapsulates all these issues to establish quality and timely delivery to improve customer satisfaction. "This results in future orders and increases a company's business potential for more projects, which in turn leads to more jobs, and the cycle continues," explained Prof. Padmanav Acharya.
The SD model offers good insights on organizational and industry growth scenarios at regular intervals to build realistic plans for future projects.
"In IT projects, due to time and schedule constraints, 0.2 to 0.8 percent of the tasks can be safely passed as faulty. These are the acceptable error levels in projects," he said. Hence, the assumptions held in the SD modeling are that 80 percent of projects can get completed on time and 99.6 percent of projects offer quality.
For any project, Prof. Acharya recommends the integrated approach where the SD model is implemented at each project phase, whereas the critical path method and/or the program evaluation review technique is applied at the holistic project level.
"A more stable system is a more sustainable system, and the benefits derived by the top management from such SD models are inimitable," he concluded. The SD model is slowly rising as a powerful tool in project management.
Project Simulation and Planning Software
Prof. Tapan P. Bagchi
Director, Post Graduate Diploma in Management,
KIIT University (formerly Kalinga Institute of Industrial Technology), Bhubaneswar
Planning is the first step in project management that provides sponsors and stakeholders with information on all phases of the project right from initiation to execution.
Data simulation is a useful tool at this stage to come up with expected performances like time and cost overrun probabilities, and project schedules. The program evaluation review technique (PERT) is a project management tool that is based on approximation, whereas the critical path method (CPM) takes into account deterministic estimates. It is important to quantify risks before the application of tools such as PERT.
"We have to begin with standards and data provided by practitioners. The PERT methodology is easier than CPM as it facilitates the organization to move from project authorization to scope, work break down structure, and estimations with immediate effect," stated Prof. Tapan Bagchi.
He illustrates the application of data simulation during 'project crashing'. Crashing is a method used to shorten the project duration by reducing the time of one or more of the critical project activities to less than its normal activity time. Expedite activities by applying more resources to the project, so that crashing costs do not exceed the original project costs. Crash causes a ripple effect and hence it is important to choose the least expensive method to crash a project.
The key is to list all the critical paths and use a heuristic method to attain targets though this methodology does not guarantee an optimal solution always.
"There was a proposal to build a seven-storied building with a projected cost of Rs. 10 crore. Since an adequate number of sponsors could not be identified, the plan was cut down to a three-storied building. However, the contractor explained that the costs will reduce by a mere 15 percent as the maximum costs will go towards laying the building's foundation. Therefore, in certain cases, crashing does not work," Prof. Bagchi explained.
Risk Management Research is the Need of the Hour
Prof. Krishna Moorthy
Dean, Sunpharma Academy, Vadodra
Mr. Vinit Thakur
Independent Consultant and Faculty,
T. A. Pai Management Institute, Manipal
A project faces many variables from the inception to execution stage that may affect its smooth transition. Risk factors that are analyzed and studied at the drawing board may turn out to be a powerful strategy for success.
Explaining the importance of an emerging field, called risk management analysis, Prof. Krishna Moorthy and Mr. Vinit Thakur urged researchers to focus not just on risk management methods or tools but also on innocuous and taken-for-granted issues that have the latent potential to transform themselves into risk factors and subsequently hamper project execution.
Delineating the curriculum of risk management being taught in varsities across the world, Prof. Moorthy emphasized the need to incorporate intensive risk management modules at the post-graduate level of project management courses.
Defining risk as a probability of events with a power to unleash an adverse cascading impact on a project chain, he said that variables with latent potentiality of 'becoming risk factors' should not be confused with issues that are generically classified, as problems or threats.
"Threats and problems are easily identifiable but risk factors can only be judged; in many cases, they are not only grounded in subjectivity of the analysts but they are also relative in nature vis-a-vis space and time," he explained. He said it has become important for the academia to use case studies and modern audio-visual teaching aids while disseminating knowledge on risk management.
Mr. Thakur said that he introduces risk management or risk analysis to students by way of the popular childhood game of snakes and ladders. He said that students can effectively comprehend the fundamentals of risk management if they are placed in a 'risk-like situation or a sort of controlled and playful, simulated environment. This teaching process helps the student in learning how to identify probable risk factors. These observations can later be jotted down in a risk register, which helps during actual project planning.'
Soft Skills a Must to Tackle Project Complexities
Prof. Tapash Kumar Ganguly
Senior Professor and Dean-Executive Education,
National Institute of Construction Management and Research (NICMAR), Pune
Changes in the technological landscape over the years have made projects more complex than before. Growing budgets, varied stakeholder interests often colliding with each other, and unknown risk factors are leading to higher complexity.
Prof. Tapash Kumar Ganguly said, "It is important to understand that an increase in 'disorder and instability' is corollary to complex projects that have huge investments."
Stressing on the need for a newer definition of project management, Prof. Ganguly citing examples of highway construction cases in USA, pointed out that technicality and ensuing complexity even though interlinked, are two different entities.
Prof. Ganguly emphasized the need to take into consideration socio-cultural variables which were earlier not given much thought while visualizing, planning, or executing a project.
"Earlier everybody spoke about only time and cost while discussing the modalities of a project. Even today we speak in the same linear manner? nobody talks about the stakeholders and their varied interests," he added.
Culture is an extremely problematic subject, as also other social variables such as linguistic issues in a region. "The sociocultural ap is extremely complex because intangible forces operate at a different level. And thus the time has come to create and visualize project models like the 'diamond model' that encapsulates measurement of not just political vagaries but also social factors pertaining to people of the region," he commented.
Project executors need the right soft skills to help them cope with the complexities arising out of the interplay of these socio-economic forces.