Every project starts with a plan, but to steal a quote from Helmuth von Moltke “No Battle Plan Survives Contact With the Enemy”
So too it is with a project plan. IT WILL NOT GO EXACTLY TO PLAN.
This post is designed to explain how to manage the change of the Projects plan.
First, enter the concept of a Tolerance. The tolerance is typically applied to a value like Delivery Time, Cost, Scope, etc. and it is expressed as a value above (and below) the agreed value of the element it is applied to.
The Tolerance usually also has 3 values it applies to check the value; Green, Amber, and Red. What we call a RAG indicator.
Note also the Tolerance can be expressed as a Value or a Percentage.
So an example of a Cost tolerance and RAG might be; If Projects Forecast Cost is within +/- 5% it is Green. if Forecast Cost exceeds +/- 5% it is Amber (at risk of exceeding tolerance), if it exceeds +/- 10% its Red (it has exceeded the tolerance).
BUT, i hear you say, exceeds what? Well that would be exceeds the projects BASELINE.
The Baseline is the agreed amounts, typically approved by the Project board, on the project elements previously mentioned; the Delivery Timeframes, Cost, and Scope. Effectively it is a snapshot of the Project Forecast when it is agreed to be a satisfactory path forward.
So with those basics out of the way... Let's look at how we can;
Apply Baselines to schedules,
Monitor the forecasts using current actuals,
Report tolerance breeches,
Replan and / or rebaseline, and
Using multiple baselines, ensure we can see how the project is not just progressing but how its evolving.
Note: in this example I will be using MS Project and Project Online. But the principles apply for most PPM tools.
Step 1. Move your plan to a fully costed and resourced schedule. If possible ensure the task costs are generated via resource cost / hour. This will significantly help when you need to experiment with "what if" scenarios to plan yourself "back to Green"
Step 2. Baseline your schedule once it is approved, preferably with would be done by the PMO using Protected Baselines that are not editable by PMs. Also preferable is the Baselining of previous estimates used in the formation of the project, such as Rough order of magnitude (ROM) estimates. This will help future estimate efforts improve when deltas emerge.
Step 3. Enter actuals and monitor forecasts. Hint: the best way to monitor work underway and in the near future is to use the Work Done / Work to Go question to resources. Also, best practice is to reach out to those responsible for approaching work to confirm resources are ready to start on the current agreed plan, how far you can reach forward depends, and you should gauge what is possible within your organisation.
Step 4. When the future Amber RAG(s) for the project appears, ether see if you can re-plan the forecast work/costs without breaking the agreed deliverables, or write an exception report to alert the project board as to the emerging "bulge" in the project element. Everyone appreciates a heads-up.
Step 5. If the Amber RAG becomes Red (if it even had a Amber period) don't wait a month for the next board meeting, communicate now. Emergency meetings are a thing, a thing for this eventuation. A Project Change Request (PCR) is a normal course of events, and it should include an amended Project Schedule (resources and costed) to replace the old one.
Step 6. If accepted, the new schedule (resourced and scheduled) is baselined as Baseline 0, but not before the old one is preserved as number 2-4 (1 should be the original Business Case)
Step 7. Goto Step 3 until project complete.
More Notes and Tips:
A lot of the emergent issues in projects are unforeseeable, unless hindsight counts. Experienced project boards know they approved the plan so it's a bit rich for them to demand perfection.
Just come clean early, even if it means project termination.
Involve all resources (and/or managers) in all planning, including for the PCR.
Try using Contingency Funding instead of Tolerances, better yet try and link Contingency funding to Risk Mitigation activities.
Use Generic Resources (with comparable costs) if you don't know who is doing the work, BUT if you don't know who is doing the work one month prior to the start date, that's an issue in itself.
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