Why Single Point Estimating?

July 9, 2009

A couple of weeks ago DeliveryDemon got involved in some interesting discussions about whether a single point estimate could actually exist. Various thoughts circulated for a while before being buried in a deluge of other ‘stuff’. Now the ‘stuff’ has been cleared, the thoughts are coming to the surface again.

Certainly an estimate has associated with it a degree of uncertainty. Depending on  who’s looking at it, understanding of that uncertainty varies with the eye of the beholder. A good estimator will have a fairly sophisticated view of the nature and range of the band of uncertainty. Some people will recognise the existence of the uncertainty without having much understanding of how it can be managed. Some people are oblivious to its existence while others take a position of total denial – ‘Just give me the number. What’s wrong with you that you can’t give me a single number?’

There’s an education gap creating the demand for a single number. There’s also something more systemic. Take a look at budgeting systems. They demand single values for each line in the budget. If a manager wants to create contingency to allow for uncertainty in a project, the common ways of doing it are to include contingency in each budget line, and to have a separate slush fund for allocation at the manager’s discretion.

This approach was a minor anomaly in the days when business as usual consumed nearly all of a company’s budget. Today, Change is an important business function and companies often need to allocate a substantial proportion of the budget to it. The anomaly is becoming a significant problem for two reasons:

  • A large uncertainty factor is becoming embedded in every budget
  • The company does not know how much contingency it has in its budgets, and how much contingency it needs. As a result it is not in a position to manage contingency in line with business priorities.

The DeliveryDemon doesn’t have a perfect solution, but a working solution would have some of the following features:

  • Three figures associated with each budget line – target, best case and worst case, with budgets being based on the target figure
  • The ability to allocate contingency to individual budget lines based on the best case / worst case figures
  •  The ability to allocate contingency at an aggregate level, thus reserving decisions about its use for more senior management. This would also allow for a lower contingency figure, on the assumption that not all lowest level budget lines would need to call on contingency.
  • A process to review allocated contingency, and retrieve it when the need is reduced or gone, or reallocate it should business priorities change.
  • A requirement to justify the use of contingency, to offset the human tendency to use up the funds available.

Some of this happens in practice in some companies, but not as an explicit process, which is dangerous from a due diligence perspective. The big difference will come when Change is recognised as a fundamental business function, and managed from a strategic perspective in the same way as other major business functions. Once that happens, Change ceases to be special. Its processes and characteristics will be made explicit  in the same way as those of any other business function, as will its interfaces with other business functions. When Change is recognised as just another business function, then it makes sense for it to feed business requirements into systems design, which will be an interesting challenge to current budgeting and contingency management conventions.


Expectation Management

June 7, 2009

Any well trained project manager knows that surprises are bad news. Underperform, and it’s your fault. Overperform and people want to know why you didn’t make a more challenging commitment in the first place. Such is the lot of the project manager!

Every project is surrounded and permeated by expectations. The team has them, so does the project sponsor, and all the suppliers, not to mention customers, and the operations team. All those expectations are coloured by the recollections and assumptions and experience of the individual stakeholder. Ask a stakeholder what their expectations are and you will get a response but that won’t be the whole story. Often expectations aren’t identified until they are not met, and the stakeholder sees it as a project failure. As project managers, we talk glibly about expectation management, but it’s a complex and delicate subject. A project manager needs to analyse the project environment and decide how much effort needs to go into expectation management. It’s not a one-off exercise either. This decision needs to be reviewed at each stage and major change and decision point, and at any time their are indications of loss of confidence in the project, or excessive expectations. And of course the communication plan needs to be updated to deal with the reality rather than the situation which the project manager *expected* to exist!

Thinking about expectation management in general, DeliveryDemon did an analysis of her own expectations during a recent trip to Edinburgh for a Saturday meeting, and was surprised at the extent of the assumptions made during the trip and how they affected her.

Lift to the airport DeliveryDemon assumed the driver would head for the motorway, the driver preferred the direct route through towns. There probably isn’t a lot to choose between the routes but at each red traffic light and school crossing the DeliveryDemon got twitchier and twitchier.

Before check-in the DeliveryDemon was hungry and popped into M&S for a sandwich and bottle of water, an obvious thing to do in an airport mall full of food shops. Full marks (sorry, pun!!) to the checkout girl who recognised the assumption of eating the food on the plane, and provided a gentle reminder that drinks can’t be taken through security.

Airside is really designed to take expectations, shake them up and leave the traveller feeling jumpy. On the one hand shops and restaurants encourage browsing and relaxing over a meal or a drink. On the other hand the departure boards demand attention. When the distant gate is finally announced, the delivery-oriented DeliveryDemon wants to head straight for the gate, and is frustrated by the shuffling, 6-wide groups who expect that others will match speed to that necessitated by their in-depth discussion of last night’s soap or football match. Then once the gate is open, airline staff rush the passengers through and chivvy them along  – to wait in a queue. Rush, stop, rush, stop – the metabolism doesn’t know what to expect. What a recipe for high blood pressure and heart attacks!

In the sky the DeliveryDemon tends to expect interesting clouds and clear, photogenic, views, and feels vaguely cheated by a flight through grey cottonwool.

Meeting people provides a good test of assumptions. The DeliveryDemon and colleague got the mobiles out to make contact with another colleague arriving on a different flight, arranging to meet at the luggage carousel in arrivals. After some confusion the invalid expectation became clear – the colleague had arrived on a European flight, coming through a different arrivals area.

The hotel was one of two in a larger chain, situated in the Grassmarket. Expecting to stay in the same hotel as other colleagues, several people were annoyed to lose out on the opportunities of discussion over breakfast or a late night drink as overbooking meant the party was split between two hotels. For the unlucky group diverted down the road, the hotel failed to meet expectations of cleanliness with rooms where evidence of previous occupants had not been removed, and failed to meet expectations of construction standards with double glazing so ineffective that it would have been as quiet sleeping out in the Grassmarket during the Friday night festivities.

Finding a restaurant also upset a few expectations. Nose to the steamed up glass, DeliveryDemon waved to colleagues crammed round some window tables in the recommended eatery. There was no way that three of us would be able to battle through the crowds to the tables, never mind find seating space. But we did. And the staff conjured up chairs and created elbow room from a fifth dimension. The DeliveryDemon was very glad of being persuaded to ignore her expectations of not getting a seat, more so when faced with a steak served up on a hot stone with a pile of jacket wedges!

Grey days Having lived in Edinburgh, the DeliveryDemon expected and was prepared for grey skies and sharp winds, seasoned with the odd rain shower. Fortunately the DeliveryDemon also favours contingency planning, and adapted her expectations when faced with warm sunshine and clear blue skies, sneaking out between sessions for some impromptu architectural photography.

 Lunch hadn’t been a high spot at previous meetings, but the DeliveryDemon’s expectations were overset by a tasty cooked lunch which was light enough to avoid doziness during the afternoon session. Of course, with the Edinburgh hotel showing what can be done, expectations have been reset for lunches at future London meetings.

The return flight DeliveryDemon had hoped for a return flight to Luton, much closer to home than Heathrow but the expected evening return didn’t exist. DeliveryDemon is unimpressed with the UK’s domestic transport arrangements. At least Edinburgh airport was quiet, the rugby fans still celebrating in town. But the expectation of a leisurely browse round a selection of malt whiskies was upset by the feeling of urgency generated by a departure board announcing that the flight was already boarding, well before departure time. The flight left on time and arrived early. The DeliveryDemon expected problems on arrival, given the publicity Terminal 5 has attracted, so the quick baggage arrival came as a surprise.

Just a step on the way Of course, whatever expectations the advertising raises, Heathrow is not a destination in its own right, and the hapless traveller is often faced with an onward journey of a few miles which takes considerably longer than the flight.

London Underground For decades, a big red circle with a blue bar through it has raised the expectations that a Tube station is nearby. It’s a simple, brash, logo whose message is well known. Brash, not sophisticated, and that’s the problem. When designers are let loose on the signage of a transport hub, the prissy result has no place for such a dominant and informative graphic. They tone it down so it doesn’t stand out among all the other information. The result is that the tired traveller, looking for train or toilet or taxi, has to search through an undistinguished clutter of signs for the information they need. Not good for the traveller, not good for the traffic flow, and not particularly clever, given that the purpose of signage is to deliver information. So it is at Terminal 5.

And finally the train home Saturday evening. London. The last train. One might expect it to be full of happy people who followed a show with a meal and a glass or two of wine before returning home. Not with East Midland Trains’ final departure at 10.30. It made a nailbiting journey from Heathrow for the DeliveryDemon who couldn’t be sure if she could expect to catch the last train, or have to rely on the slow and uncomfortable line which goes no further than Bedford. And not knowing the train meant having to buy the ticket on the day. UK trains are notoriously expensive, but who would expect the cost of a single ticket to be the same price as a return?

It was just an overnight visit to Edinburgh for a meeting. But what a lot of expectations and assumptions arose. Some were met or well managed, others not. If that’s the expectation pattern for a single person on a simple trip, how much more varied and complex are the expectations and assumptions of the many stakeholders over the lifetime of a project? For a project manager, expectation management is a serious business, and a major factor in the success of a project. Forget this at your peril!


Project / Programme Delivery and Service Delivery – Is There A Conflict?

June 1, 2009

(Shamelessly taken from a reply the DeliveryDemon provided to a question on LinkedIn)

Do you see a conflict?

The main interfaces with service delivery are:

  • When defining the scope of the project, acknowledge that there will be an impact on service delivery, and involve the stakeholders who can form a view of the impact and how it is likely to affect other priorities, and take decisions.
  • During the design / delivery / test stages of a project, identify and involve the service delivery stakeholders needed to provide input / carry out activities / test.
  •  As part of dependency management, identify dependencies / resource conflicts with other projects also impacting service delivery, establish a suitable level of communication with them.
  •  For transition to business as usual, allow for testing and business change within the service delivery function.

All of the above are down to planning and communication and should not be a significant source of conflict if well managed.

There is only ONE intrinsic and irresolvable conflict between programmes / projects and service delivery. Service delivery is there to deliver a service and that is their first priority. In the event of a serious incident, restoring the service has first priority.

In the event of a serious incident, all the programme / project manager can do is:

  • Keep tabs on the incident resolution without hassling those at the sharp end.
  • Make use where possible of resource not involved in the incident, provided their workload has not increased to cover colleagues dealing with the incident.
  • Carry out an impact analysis, work on a contingency plan and implement it.
  • Keep the project / programme stakeholders informed.
  • Escalate only in the event that it is likely senior management will give the project priority over the service.
  • Keep the morale of the team up when they can’t make progress.
  • When the pressure lifts, get in there with the key stakeholders to ensure that the programme / project gets appropriate priority as the pressure comes off.