Managing Project Uncertainty: From Variation to Chaos

Group-7 Atul Sharma Arnab Guha Mallik Rudra Radhakrishnan Ankur Dey Tarafder PGP/15/075 PGP/15/074 PGP/15/173 PGP/15/204

Project is a unique interrelated set of tasks with a beginning, an end and a well defined outcome
Assumption: everyone can identify the tasks and provide alternatives and maintain the same overall project vision throughout

A more comprehensive and better approach towards project management is uncertainty based management

Types of Uncertainty:
1. 2. 3. 4. Variation Foreseen Uncertainty Unforeseen Uncertainty Chaos

Types Of Uncertainty
Variation in activity durations, costs and exact performance level of the resources Foreseen risks refers to a distinct, understood and identifiable influences Require risk assessment with alternate plans Ex. results of field test in drug development
A developer can anticipate possible side effects The side effect is the foreseen uncertainty. The contingency plan may never be used, but it is there if the side effect occurs

Unforeseen uncertainty cant be identified during planning The team either is unaware of the events possibility or considers it unlikely Occurs in any project that pushes a technology envelope or enters a new market E.g.: Pfizers blockbuster drug Viagra

Projects subject to chaos do not start with stable assumptions/goals Basic structure of the plan is uncertain e.g. when technology is in upheaval or when research is the main goal. The project ends up with results that are completely different from the projects original intent. e.g. Ex. Sun s development of Java

A shifting schedule causes the critical path to move, forcing managers to monitor variations , not just critical activities
Ex. variation during a construction project in delivery dates

Type of Uncertainty: None (Only Complexity)

Type of uncertainty PM Style Managing Tasks Managing Relationships

Planning

Execution

Planning

Execution

No uncertainty
(only task and relational complexity)

Coordinator and master scheduler

Plan the nature and sequence of tasks based on experience .

Monitoring of project progress against project plan.

Identify interest conflicts, and codify responsibilities and deliverables .

Coordination of stakeholders and suppliers

critical path
Activity network analysis (CPM, PERT, etc. )

Gantt Chart

Contract design and enforcemen t

Critical Path Method

Enforcement of deliveries by parties with conflicting interests

The greater the uncertainty more the team may have to redefine the tasks or structure of the project plan in midcourse.

The mechanism that ensures agreement is the uncertainty profile. For example, although the dominant uncertainty an Internet start-up faces may be chaos, it also may face other types of uncertainty
To help identify the dominant uncertainty types, teams may use hunches or more formal approaches, such as statistical analyses, technology and market forecasts, or creativity management techniques Once a profile is created, it can be used to build a project infrastructure to execute a plan (in the case of variation or foreseeable uncertainty) or to learn from events and adjust (unforeseeable uncertainty or chaos)

The project managers role and the planning and monitoring activities change as the uncertainty profile evolves.
Flexibility and the ability to communicate changes is key.

Type of Uncertainty: Variation

Type of uncertainty PM Style Managing Tasks
Planning Execution

Managing Relationships
Planning Execution

Variation

Trouble shooter and expeditor

Build in slack/buff er at strategic locations in critical path and determine control limits for corrective action. Simulation of different scenarios.

Monitor deviation from intermediate targets

Clearly identify and communicate expected performanc e criteria.

Monitor performance against performance criteria. Maintain some flexibility with key stakeholders .

Use of control charts

Critical Chain:

buffer management

The Mobile Systems Unit (MSU) of Acer learned the importance of that principle in its development and manufacture of PC notebooks They missed the market introduction window by only one month on a given model and it virtually eliminated the units profit potential for that model Significant schedule variations with multiple causes.
1. Vendors did not deliver sufficient volumes of a promised new component on time 2. Major customers such as IBM would change their requirements 3. Design problems with the motherboard would cause additional design loop 4. Negotiations among multiple parties might change internal specifications

This lead to shortcuts in testing, causing major rework at a more costly stage Acer attacked the multiple causes on multiple fronts.
1. They created buffers in the form of slack capacity by killing two delayed projects 2. It then concentrated on improving the way it documented operating procedures so that it could increase testing coverage and facilitate training of young engineers

Those steps reduced the number of correction loops during product development Improved the quality of the companys manufacturing ramp-up Over the next two years, MSU more than doubled its sales and gained significant market share.

Type of Uncertainty: Foreseen Risk

Type of uncertainty PM Style Managing Tasks
Planning Execution

Managing Relationships
Planning Execution

Foreseen risk

Consolidator of project achievements

Decision tree

outcome decision node

X1 X2 X3 X4

Chance node

Anticipate and trigger alternative paths to project goal through decision tree techniques
Contingency planning, decision analysis.

Identify occurrence s of foreseen risks and implement contingenc ies

Increase awareness for changes in environmen t along known criteria or dimensions

Continuousl y inform and motivate internal and external partners in order to cope with major switches in project execution

go 1 -p stop

Occupy the white spaces in the contract.

Type of Uncertainty: Unforeseen Risk

Type of uncertainty

PM Style

Managing Tasks
Planning Execution

Managing Relationships
Planning Execution

Unforeseen risk

Flexible orchestrator and networker

Evolving decision tree p go 1-p stop

X1 X2 X3 X4

Build in the ability to add a set of new tasks to the decision tree

Continuou s-ly question the existing project model and scan the horizon for early signs of nonanticipated influences.

Build in ability to mobilise new partners in the network who can help solve new challenges

Maintain flexible relationship s and strong communication channels.

0
X5

Parameter (chance node) recognized at this point

Type of Uncertainty: Chaos

Type of uncertainty

PM Style

Managing Tasks
Planning Execution

Managing Relationships
Planning Execution

Chaos

Entrepreneur and Knowledge manager

Iteration (new projects)

Further decisions (not plannable )

Consider parallel solutions with iteration and gradual selection of final approach.

Repeated verification of hypotheses on which project is built; detail plan only to next verification

Build longterm relationship s in order to create interest alignment

Close linking with users and leaders in the field. Direct and constant feedback from markets and technology providers.

THANK YOU