TEAMFLY Team-Fly ® Modelling Complex Projects Modelling Complex Projects Terry Williams Copyright © 2002 by John Wiley & Sons, Ltd., Baffins Lane, Chichester, West Sussex PO19 1UD, UK National 01243 779777 International (ϩ44) 1243 779777 e-mail (for orders and customer service enquiries): cs-books@wiley.co.uk Visit our Home Page on: http://www.wiley.co.uk or http://www.wiley.com All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1P 0LP, UK, without the permission in writing of the publisher. Other Wiley Editorial Offices John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158-0012, USA WILEY-VCH Verlag GmbH, Pappelallee 3, D-69469 Weinheim, Germany John Wiley & Sons Australia, Ltd., 33 Park Road, Milton, Queensland 4064, Australia John Wiley & Sons (Asia) Pte, Ltd., 2 Clementi Loop #02-01, Jin Xing Distripark, Singapore 129809 John Wiley & Sons (Canada), Ltd., 22 Worcester Road, Rexdale, Ontario M9W 1L1, Canada British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN 0-471-89945-3 Typeset in 11/13pt Baskerville MT by Footnote Graphics, Warminster, Wiltshire. Printed and bound in Great Britain by T. J. International Ltd, Padstow, Cornwall. This book is printed on acid-free paper responsibly manufactured from sustainable forestry, in which at least two trees are planted for each one used for paper production. Contents 1 This book 1 Introduction to the book and the author 1 Why is there a need for this book? 3 The structure of this book 7 What do I need to know before I read this book? 8 Conclusion 11 2 Projects 13 What is a project? 13 What are project objectives? 15 Basic project management techniques 18 Projects referred to in this book 23 Conclusion 29 3 Modelling 31 What is a model? 31 Why do we model? 35 Modelling in practice 40 Validation 44 Conclusion 47 4 What is a complex project? 49 Introduction 49 What is complexity? Structural complexity 50 What is complexity? Uncertainty 55 What is complexity? Summary 58 Increasing complexity 59 Tools and techniques—and the way ahead 62 vi Contents 5 Discrete effects and uncertainty 65 Introduction 65 Uncertainty and risk in projects 66 Cost risk: additive calculations 78 Time risk: effects in a network 89 Analysing time risk: simulation 96 Criticality and cruciality 104 The three criteria and beyond 115 Conclusion 118 6 Discrete effects: collecting data 119 Introduction 119 Collecting subjective data: identification 121 Collecting subjective data: general principles of quantification 123 Collecting subjective data: simple activity-duration models 126 Effect of targets 131 Conclusion 136 7 The soft effects 137 Introduction 137 Some key project characteristics 139 Client behaviour and external effects on the project 140 Management decisions 146 Project staffing 149 Subjective effects within the project 151 Summary and looking forward 154 8 Systemic effects 155 The effects 155 A brief introduction to cause mapping 157 Qualitative modelling: simple compounding 158 Qualitative modelling: loops 161 Quantitative modelling 163 9 System dynamics modelling 167 Introduction to system dynamics 167 Using system dynamics with mapping 171 Elements of models 175 Production elements 176 Other elements 188 Managerial actions 189 Contents vii How effects compound 193 Validation 195 Conclusion 196 10 Hybrid methods: the way forward? 199 Introduction 199 Adapting standard models using lessons learned from SD 200 Using conventional tools to generate SD models 205 Using SD and conventional models to inform each other 206 Extending SD: discrete events and stochastic SD 208 The need for intelligence 210 Conclusion 212 11 The role of the modeller 215 Introduction 215 Project management 215 What makes a good modeller? 217 Stages of project modelling 219 Chapter summary 230 12 Conclusion 233 Appendix: Extension of time claims 235 References 249 Index 265