Effect of Scheduling Practices on Project Success

By Andrew Griffith, Ph.D., P.E., PMP

Independent Project Analysis, Inc.

I. Presentation Objectives
A. Provide data that you can use to help justify the investment in project scheduling
How?
B. Present the results of an Independent Project Analysis, Inc. research study
1. Demonstrates a measurable link between scheduling practices and project
outcome success
2. Based on data from actual projects

METHODOLOGY

II. Independent Project Analysis, Inc.

A. Project management research and consulting company based in Ashburn, Virginia
B. Capital project benchmarking
1. Project system benchmarking
2. Individual project evaluations
3. Project system monitoring
C. IPA approach is based on extensive, detailed, and robust databases

III. Characteristics of the IPA Process Plants Database

A. Over 7,000 capital projects from a wide range of industries
B. Over 200 companies worldwide
C. Quite detailed: up to 2,000 factors per project
D. Includes all phases of the project life-cycle, from R&D through operations
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

E. All project types covered: greenfield to revamp

F. New projects added constantly

IV. Application of the IPA Methodology

Schedule
Histories
Contingencies Management
Strategies

IPA
Databases
Cost Performances
Histories

Project Technical
Definition Characteri
Benchmarking i
Project Project
Evaluations System
Monitoring

PMI College of Scheduling Page 2

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

V. IPA Approach: Linking Inputs and Outputs

Inputs That Affect

FEL Technical Project Project

Difficulty Management Practices

Parametric
Statistical
Techniques

Cost Schedule Operational Safety

Performance

Performance Outputs

VI. Research Hypothesis

There is a positive and significant relationship between

scheduling practices used early in the project life-cycle and the

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Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

ultimate success of the project.

VII. Scheduling Practices Data
A. Collected during every project interview
B. Measures characteristics of the project schedule
C. Anchored at the time of project authorization for all projects in the study
D. Validated with electronic schedule files and hard copy printouts

VIII. Project Outcome Performance Metrics

A. Measure relative performance for a wide range of outcome metrics - not just one
success measure
B. Based on data collected after mechanical completion and startup
C. Derived using parametric statistical techniques
D. Normalized based on project characteristics, location, currency, escalation, etc.
E. Includes both predictability and absolute metrics
IX. Predictability vs. Absolute Metrics

Predictability Metric Absolute Metric

Outcome performance relative to
Outcome performance relative to
industry average for comparable
estimated performance
projects
Based on actual performance of Based on performance vs.
project vs. the estimated Industry average - derived using
performance statistical models

Deviations are not normalized for Models normalize for project

project characteristics characteristics
Reported as a percent deviation Reported as an index with
from the estimated performance Industry average set to 1.0
Cost growth & schedule slip Cost index & schedule index
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Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

X. Approach
A. Developed sample database
1. Project scheduling practices
2. Outcome performance metrics
3. Other project practices and characteristics
B. Applied statistical tests
C. Controlled for other project characteristics
D. Interpreted the results and formed conclusions

XI. Sample Characteristics

Characteristic Study Sample

Number of Projects 494 completed projects
Number of companies
59 different owner organizations
represented
All industries covered by IPA
Industries
database
Project locations Worldwide locations

All project types: Greenfield to

Project types
revamp
Average estimated cost: $24MM
Project sizes
($100K to almost $1B)

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Topic of the Month – April 2005
 Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

ANALYSIS

XII. Scheduling Practices That Drive Better Project Outcome Performance

A. Integration of all project phases into a single schedule
B. Application of CPM techniques
C. Resource-loading
D. Review by core project team
XIII. Integrated Schedules
A. Integrates all project phases into a single master schedule
1. Definition, detailed engineering, procurement, construction,
shutdown/turnaround, and commissioning and startup
B. Only 33% include all applicable project phases
1. Many missing FEL, shutdown/turnaround, and/or commissioning and
startup
XIV. Integrated Schedules - Correlated With Better Cost Performance

+1 Std.
0.7
pr < 0.02 Mean
(Actual / Industry Benchmark)

0.8 -1 Std.

0.9
Cost Index

1.0

1.1

1.2

1.3
Integrated Schedule Not Integrated

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Topic of the Month – April 2005
 Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

XV. Integrated Schedules - Also Correlated With Less Schedule Slip

-40% +1 Std.
pr < 0.00
-20% Mean
(Actual / Planned Duration)
Percent Schedule Slip

0%
-1 Std.
20%

40%

60%

80%

100%
Integrated Schedule Not Integrated

XVI. Based on CPM

A. Is the project schedule based on the Critical Path Method (CPM)?
1. Activities networked together
2. Activity start and finish dates based on network calculations
3. Critical path and activity float defined
B. Less than 50% of schedules in the sample were based on CPM

XVII. Use of CPM Correlated with Less Cost Growth

-30%
pr < 0.00 +1 Std.
-20%
Mean
(Actual / Estiamted Cost)
Percent Cost Growth

-10%

0% -1 Std.
10%

20%

30%

40%
Applied CPM Did not Apply CPM
XVIII. Use of CPM Also Correlated with Less Schedule Slip

PMI College of Scheduling Page 7

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.
30%
Percent Schedule Slip pr < 0.03
(Actual / Planned Duration)

20%

10%

0%
Applied CPM Did Not Apply CPM

XIX. Use of CPM Also Correlated With Better Cost Performance

0.7
pr < 0.03 +1 Std.
(Actual / Industry Benchmark)

0.8
Mean
0.9
-1 Std.
Cost Index

1.0

1.1

1.2

1.3
Applied CPM Did Not Apply CPM

XX. Resource-Loaded
A. Critical project resources loaded into the schedule using appropriate units of
measure
B. Only 24% were resource-loaded
C. Mix of resource categories for projects with resource-loading
D. Construction labor 73%
E. Engineering labor 58%
F. Construction Equip. 24%

PMI College of Scheduling Page 8

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

G. Estimated cost 21%

H. Other 10%

XXI. Resource-Loading Correlated with Better Cost Performance

0.7
+1 Std.
pr < 0.01 Mean
(Actual / Industry Benchmark)

0.8
-1 Std.

0.9
Cost Index

1.0

1.1

1.2

1.3
Resource-Loaded Not Resource-Loaded

XXII. Resource-Loading Also Correlated with Less Schedule Slip

30%
(Actual / Planned Duration)
Percent Schedule Slip

20%

10%

0%
Resource-Loaded Not Resource-Loaded

XXIII. Project Team Review

A. Review by the core project team
1. Supports buy-in to plan
2. Provides a check for accuracy and feasibility

PMI College of Scheduling Page 9

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

B. 76% of the project schedules were reviewed by the team

XXIV. Team Review Correlated with Less Cost Growth

-30%
pr < 0.00 +1 Std.
-20% Mean
-1 Std.
Percent Cost Growth
(Actual / Estimated Cost)

-10%

0%

10%

20%

30%

40%

50%
Reviewed by Core Team Not Reviewed by Core Team

Conclusions and Recommendations

XXV. Single Schedule Definition Rating

A. Definitive - Resource-loaded CPM schedule that covers all major project phases
B. Preliminary - CPM schedule that covers all major project phases, but not
resource-loaded
C. Factored - Milestone schedule showing the timing required for major project
milestones and phases
D. No Schedule - No project schedule developed other than possibly a target
completion date

PMI College of Scheduling Page 10

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

XXVI. Sample Distribution

Definition Rating Percent of Sample

Definitive 13%

Preliminary 29%

Factored 55%

No Schedule 3%

XXVII. Schedule Definition Drives Better Cost Performance

pr < 0.00
Resource-Loaded

CPM Schedule

Milestone

0.90 0.95 1.00 1.05

Av erage Cost Index
(Actual / Industry Benchmark)

PMI College of Scheduling Page 11

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

XXVIII. Schedule Definition Also Correlated with Better Schedule Performance

0.4 +1 Std.
pr < 0.02 Mean
Execution Schedule Index
(Actual / Industry Benchmark)

0.6 -1 Std.

0.8

1.0

1.2

1.4

1.6
Definitive Preliminary Factored

XXIX. Schedule Definition Also Drives Lower Schedule Slip

Resource-Loaded

CPM Schedule

Milestone

0% 5% 10% 15% 20% 25% 30%

Average Percent Schedule Slip

(Actual / Planned Duration)

PMI College of Scheduling Page 12

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

XXX. Schedule Definition Also Correlated with Less Cost Growth

+1 Std.
Mean
pr < 0.00
-30% -1 Std.

-20%
Percent Cost Growth
(Actual / Estimated Cost)

-10%

0%

10%

20%

30%

40%
Definitive Preliminary Factored

XXXI. Conclusions
A. Sound scheduling practices drive better project outcomes
B. Significant benefits of good scheduling practices
1. 7% better cost
2. 12% better schedule
3. 6% less cost growth
4. 23% less schedule slip

XXXII. Transferability of Findings

A. Sample is limited to capital projects in the heavy industrial sector
B. Measure of scheduling practices anchored at the time of project authorization -
not at the start of construction
However
C. Relationship between practices and outcomes is consistent across project types
and industries
D. General findings are applicable to all project types

PMI College of Scheduling Page 13

Topic of the Month – April 2005
Effect of Scheduling Practices on Project Success
By Andrew Griffith, Ph.D., P.E., PMP
Independent Project Analysis, Inc.

XXXIII. Recommendations
A. Use the results of this study to help justify the investment in sound scheduling
practices
B. Benchmark schedule development
1. Design an applicable metric for schedule definition
2. Systematically measure schedule definition at authorization for all projects
3. Measure trends and strive to improve

Contact Information
Andrew F. Griffith
Independent Project Analysis, Inc.
44426 Atwater Drive, Suite 100
Ashburn, Virginia 20147
Phone: 703-729-8300
E-Mail: [email protected]

PMI College of Scheduling Page 14

Topic of the Month – April 2005