In life, they say that two things are certain: death and taxes. When it comes to computer-based resource leveling there are also a couple of things that you can bet on. First, don’t expect to obtain an optimum solution. Second, you will rarely obtain the same solution, even within the same program. And, we might add, there are no assurances that the higher-priced or more functionally endowed products will provide shorter or more consistent results. That is not to assume that the software designers are either lax or inept regarding the resource leveling function. On the contrary, a lot of effort has gone into most of these products to support effective resource schedul- ing, and excellent resource leveling capabilities have been available for more than 20 years. The problem is primarily one of tradeoffs, and of real world considerations. It may very well be possible to generate an optimized solution. However, you may not wish to pay the price for executing such routines. First, it would tend to require extensive computer resources. Second, it would require so many itera- tions to slow down the process to an unacceptable level. However, even more important, it would require the user to make critical and unnecessary decisions long before they are needed, and then to relinquish control of this complex process to the computer. And because conditions change as the project is being scheduled and executed, the decisions made at the beginning may no longer be appropriate down the line. User intervention may be required to produce the right resource schedule. The issue here is that there are usually sensitive criteria that must be consid- ered when deciding which task should get the limited resources. In the first place, it would be tedious to define all of these decision factors to the computer (after all we are already protesting the amount of detail that must be entered to produce a decent project model). But, more to the point, it would be even more difficult, and unrealistic, to make these determinations very far in advance of the period of work execution. There are definite benefits to be gained from employing computerized re- source leveling routines, especially to get the big picture. But, if we want to be re- alistic, relative to detailed resource scheduling, we will need to take a short-term prospective, and fully interact with the computer. Tool Tip Responding to my philosophy that resource leveling to the end of a two-year-long project may be unrealistic, Scitor added a Level until xx/xx/xx Date option in PS7 and PS8. Look for this option in other products, as well. 140 RESOURCE LEVELING, GAMES OF CHANCE TEAMFLY Team-Fly ® I have been researching this subject for quite some time, and the more in- volved in it I get the more I find it Byzantine and intriguing. It is a fairly complex topic. There is probably more information here than you need to know. We start by looking at some of the issues and problems involving resource leveling. Then, we study the resource leveling process, itself, and examine the results of 13 prod- ucts on some test projects. Next, we look at the resource scheduling attributes and calculations of these products. We also look at some alternate software for re- source management. Finally, in Chapter 4.4, we explore the Practical Uses of Re- source Scheduling. Wheel of Misfortune: The Resource Leveling Process Resource leveling is certainly not new, and neither are the issues pertaining to the best and practical methods to be used. I was recently browsing through a 1981 P/2 manual (PROJECT/2 from Project Software & Development, Inc.). P/2, then running on IBM mainframes and the DEC VAX, offered powerful resource scheduling options. The user had the choice of four leveling methods, two paral- lel and two serial modes. The parallel mode, which is seldom used today, will usually (but not always) produce a shorter-duration, resource-constrained schedule. The parallel method looks at the project by time periods. For each time period, it looks at all the tasks that are scheduled to be worked and assigns resources according to the user pre- ferred ranking criteria. Activities that cannot be scheduled in that time period, due to insufficient resources, are postponed until a later time period. Then the system moves to the next time period and reconsiders the next set of tasks that are ready to be worked. The serial mode considers the project on an activity by activity basis, and gen- erally takes less time to process. For any particular time period, it starts out as above. However, when it cannot schedule an activity on its earliest start period, it looks for the first available period (resource availability) and immediately sched- ules that activity at that future time. It is possible, therefore, that when the system gets to a later time period, one or more tasks may already be scheduled, before checking for the best choice or closest support of the ranking criteria. We will find that the serial method of resource leveling is almost universally employed in to- day’s popular products. With either method, the user is often allowed to identify a set of ranking fac- tors (sometimes called ordering, prioritization, or heuristics). These are condi- tions that will influence the selection of tasks where some tasks must be delayed. Common factors are date values (ES, EF, LS, LF), float values, task duration, as- signed priorities, task IDs, and user sort sequences. During resource leveling, the WHEEL OF MISFORTUNE 141 system first looks at the precedence and imposed date results (the CPM sched- ule) and then the ranking factors. There is no sure way of telling (in advance) which ranking criteria will produce the shorter or smoother schedule. (Those 30 seemingly random numbers mentioned earlier came from running the same test project on 13 programs. Those programs that allowed the setting of preferred ranking criteria gave several different answers, depending on that setting.) Exper- imentation, with varied ranking factors, is necessary in order to get close to the best solution. In addition, in the serial method, the ranking criteria are used only when a task is first considered for resource scheduling. The tasks are not re- ordered during the process. Even with the multiple options for advanced resource leveling, available in P/2, PSDI, in that 1981 document, advised that the system is not designed to achieve the optimal results. In addition to the demand on computer resources, they suggested that the process needs to be timely and dynamic. Today, two decades later, that reasoning is still valid, and, with the universal use of the serial method, optimization cannot be expected. We cannot, within this book, hope to resolve all the issues of efficient and ef- fective resource leveling. We will endeavor, however, to make you more aware of the realities of resource leveling, and of the capabilities and limitations of the popular project management software products, with regard to resource leveling. Perhaps as a byproduct, we will keep the heat on ourselves and the software de- velopers to make resource leveling a more useful function than it is today. Place Your Bets: A Review of Resource Leveling Results Looking at the results of resource leveling tests performed on 13 project manage- ment software products, it is startling to realize the range of answers obtained, and the effect on project duration and resource utilization. Here is an overview. Test model A (producing the results that were mentioned earlier) consists of 14 resource-loaded tasks, requiring either 1 or 2 units of a single resource. There is a total of 30 MDs of effort. The unleveled CPM is 11 days. Leveling, with 2 units of the resource available, should be able to produce a 15-day schedule. Yet, in 30 trials (without invoking splitting options, where available), only 1 iteration produced the 15-day result. Others ranged from 16 to 20 days. (Splitting options, available on 6 of the programs, produced schedules of 15 and 16 days. However, activity splitting was not necessary to obtain a 15-day result via manual leveling.) Let’s say that you are the project or resource manager on this job. Would you be willing to pay for 40 days of effort (20 days for 2 people) when you could get the job done with 30 days of effort? Test model B consists of 7 tasks and 2 resources. Unleveled, the CPM duration 142 RESOURCE LEVELING, GAMES OF CHANCE is 4 weeks, but there is a resource overload in week 1. After resource leveling, the result should still be 4 weeks, as there is room to move 1 task, within the available float. Yet several products delayed more than 1 task, underutilizing available re- sources in week 1, and adding 1 week to the project duration. In both test cases, it was possible to obtain the optimal solution manually, fol- lowing a set of pre-defined ordering rules. Yet the process of serial leveling (rou- tines to immediately place tasks that are ready to be worked), often resulted in periods of resource underutilization that were unnecessary. Test model C is the most revealing. It consists of only 3 tasks and 1 resource. Only 2 of the tasks require the resource. Depending on the ranking factors used, resource leveling can add either 1 day or 5 months to the schedule. For those pro- grams that offer a choice of ranking factors, it is up to the user to determine which method of prioritization will produce the better result. And don’t look for help from the user manuals and other documentation on re- source leveling ranking factors. I read, in one manual, that Late Start (LS) will usually produce the shortest resource-constrained schedule. Another source sug- gested that least Total Float (TF) should be your first try. Yet, in my experiments, the best results in test model A were obtained using Early Start (ES) and test model C worked best with Late Finish (LF) or least (shortest) duration. Better Odds at Blackjack? What I learned, from my research and testing, is that the chances of getting 21 were far greater than the chances of obtaining optimal leveled schedules from project management software. Oh! If only we could employ elastic resources, I thought, wishfully. But resource pools that grow as needed are even rarer than the successful cloning of project managers. No, the only immediate, practical solution (outside of software improvements) is to recognize the limitations of today’s project scheduling systems, and to work within these limits. This will require interaction between the person doing the re- source management and the project management software system. Tool Tip Good news! Although the serial leveling algorithm continues to dominate the traditional CPM tools, the results delivered by the latest releases are more likely to provide a better solution than the products that I reviewed for my series of tests. While still benefiting from user interaction, the com- puted results from these latest releases are much more de- pendable than they were a few years ago. BETTER ODDS AT BLACKJACK? 143 Options That Affect Resource Leveling Before we get into practical techniques for resource management, let’s consider the various differences in the resource scheduling and leveling capabilities in project management software products. In addition to the basic leveling methods that we discussed earlier, we can identify several dozen design attributes that can affect the ability to define a project’s resource parameters and influence the re- source leveling outcome. The variations are extensive. Figure 4.3a presents most of the attributes that directly affect the resource leveling function. Practical Uses of Resource Scheduling In Chapter 4.4, we look at practical uses of resource scheduling. Here is a preview of some things that you should find interesting. Long Term/Short Term Practical resource scheduling is best achieved via a bal- ance of long-term resource aggregation (analysis of predicted resource loads) and short-term resource leveling (possibly with user intervention). We outline a rec- ommendation that should suit most applications. Use of Total and Free Float Have you been taught that we use CPM scheduling so that we can obtain a measure of float? And that we use these float values to help us make decisions on priorities, and to analyze project schedule risk? Get ready to learn all over again. When we use resource leveling, we can forget about using the resultant float values as a time management tool. I explain why, in Chapter 4.4. Use of Accomplishment Value in Place of Float There are other techniques avail- able to help analyze project progress. Accomplishment value (based on popular earned value protocols) can be used, even without using the cost management features of your project management software. A Design for Optimized Resource Scheduling Is there a better way of doing re- source scheduling using project management software? We share some ideas on this subject. Trends in Resource Management Resource management may well be the real oldest profession. Certainly it is not a new function. I’ll bet that even when the pyramids were built, there were fairly well-structured practices in place for managing the projects and the re- sources. Frederick Taylor, at the turn of the twentieth century, published new 144 RESOURCE LEVELING, GAMES OF CHANCE TRENDS IN RESOURCE MANAGEMENT 145 Figure 4.3a Options That Affect Resource Leveling Here is a list of resource scheduling attributes that may be found in traditional CPM products. The range of attributes is quite wide. Some of these are unique to a single product. Most items on the list are available in many products, but in less than half of them. So, in selecting project management software, you cannot assume that even the most popular and rudimentary capabilities are supported by any product. Price, by the way, is not directly related to the number of supported resource scheduling functions. • User choices for ranking. • Multiple iterations or ranking calculations. • Effect of imposed dates (Note: Some products use fixed dates that interfere with resource leveling). • Trial and Error—Perform what-if, but do not replace until accepted by user (or perform undo). • Manual (interactive) adjustment (most Windows products). • Activity splitting. Entire project only (this is useless—must be able to select by task). By task. By task with definable conditions. Automatic contouring (system varies loading by time period to adjust for resource availability). Discrete loading via spreadsheet. • Overtime. • Activity Stretching (called Stretching or Re-profiling in some products or Flex in another). Reduces loading per time period and increases time periods (I wonder if we want to let the computer make this decision without human interaction). • Min-Max or Threshold Options. Defines preferred limits and maximum. • Limit for resource. • Resource substitution (rare). • Leveling audit or results report. • Depletable resources. • Producer resources (unique to SuperProject). • Span dates for resource leveling (if we can choose to limit our resource leveling to a reasonably short time frame, then we can afford to implement more exacting leveling algorithms). • Minimum crew size (available in a few packages). concepts for utilizing resources more efficiently. When the first CPM systems emerged, in the late 1950s, it didn’t take long for tool developers to add re- source scheduling functionality. A most interesting trend can be observed at the current time. It relates to new practitioners of project management and new users of project management soft- ware. Businesses are realizing that the work that they are doing is centered around projects. For those of us who have been immersed in the project manage- ment scene for a while, this is no major revelation. But what is happening is that a project orientation is more of a normal modus operandi, today, rather than a spe- cial situation. Hence, there has been a growth in interest in project management and in computer-based systems to help them plan and schedule this work. That they are looking to project management software for this purpose is es- sentially good! But wait! There’s more (why keep it simple?). These businesses are also realizing that a key item to be planned and managed is the assignment and use of resources on these projects. Again, businesses are looking to project management software, as well they should. There can be no doubt that traditional project management software packages can be excellent tools to support this im- portant function. In our model project environment, we need to do critical path scheduling, and adjust the schedules for resource limitations. We need software that will al- low us to: • Identify the project workscope. • Organize the identified work (outlines and work breakdown structures). • Schedule the work. • Identify available resources. • Assign resources to the work. • Evaluate and adjust the schedule and resource assignments. • Analyze and report schedule and resource information, oriented by project and by resource structures. These are all functions that are fully supported by project management soft- ware, and I would recommend the use of such software for most applications. However, traditional project management software may not be the ideal solution for every application. There are certain plusses and minuses that must be consid- ered, especially when alternative software choices exist. The strong point of project management software is its ability to do critical path scheduling. These tools are optimized to produce and display schedules of the work, based on defined task durations, dependencies, and date constraints (and, optionally, resource constraints). They are designed to analyze and display 146 RESOURCE LEVELING, GAMES OF CHANCE resource schedules and loads (as well as costs). They would appear to be com- plete systems for planning and control. The issue is that these project management software systems are rarely con- nected to the corporate accounting systems. Yet the latter are usually the only complete and dependable repositories for resource charges (time sheets) and cost data. Also, many of these project management software systems are optimized to present a project-centric view of the work, often leaving functional and resource managers with less information and control than would be desired. So our discussion of computer support for resource management functions would not be complete without mentioning some of the non-CPM tools that are available for this purpose. Here are some options for software that can be used in place of or to supplement our traditional project management software products. Alternative Algorithms A few alternative resource smoothing algorithms have been introduced during the past decade. But these, too, have failed to be accepted thus far. Many of these include some type of best-fit approach. One appeared in Best Schedule (Parsifal Systems), but is no longer on the market. Another was built into Team Manager (Microsoft). This product also failed to achieve significant position in the market- place. Yet another best-fit concept was introduced in Project Toolbox (adRem Technologies). This product is no longer available, but the technology was ac- quired by jeTech Data, for inclusion with their Project Enterprise product. Proj- ect Enterprise has since been acquired by Microsoft. It is strange that despite the potential for these tools to provide improved re- source scheduling results, interest in such solutions remains very low. Non-CPM Resource Planning and Analysis Tools Representative of tools that have been specifically designed to address these deeper resource issues is Allegro, The Resource Management System, from Del- tek Systems, Inc. Allegro is not a critical path scheduling tool. It is a resource planning and analysis tool, employing a spreadsheet metaphor as a convenient mechanism to input to and analyze a comprehensive project and resource database. Each Allegro installation is custom designed to interface with the company ac- counting system. Most of the project and resource information can be brought over to Allegro from the accounting system, and regular upload/download be- tween these two systems (and to other data systems) is supported. There are hierarchical structures for both projects and resources. The Proj- NON-CPM RESOURCE TOOLS 147 ect WBS is three levels (default is Department/Phase/Task). Also each project can belong to a specified group of projects (accumulators) for further summa- rized analysis. Each individual resource can belong to a group or class of resources. Re- source assignments can be made at the group or individual level. This supports a real world environment, where we often wish to evaluate the impact of pending and future work, without assigning that work to specific individuals. An espe- cially helpful feature of Allegro is the ability to reassign work from a resource class to individuals, either manually or automatically. In the automatic method, Allegro considers the workloads for resources assigned to the project when it makes these assignments. Allegro can do this because it maintains a record of re- source availability. The master calendar, in Allegro, can be set to define up to 54 custom, variable periods. Normally, you would set up a few historical periods, followed by weekly periods for a few months, and then go to coarser periods, such as months and quarters. A period can be any number of days. Each period becomes a column in the spreadsheet. Data can be analyzed by project, resources, timeslice, and so on at any level of detail. All analysis views are in the spreadsheet format, with a freeze column at the right and a freeze row at the bottom (user selectable). Data can be viewed in Hours, Revenue, Labor (costs), or Percentage of Available Time. All views can be printed. In addition, there is a report writer for graphs and customized reports. All of this goes just a bit beyond the typical capabilities of traditional project management software. But Allegro users must forgo critical path scheduling, or use a CPM program to generate the schedule. In Allegro, each work item (proj- ect/dept/phase/task) is assigned a start and end date, which is used for assigning resources. Resource assignment can be uniform, or can be discrete (by loading each time period), or automatic (considering availability). Additional features in- clude: user specified billing and costing attributes, an award probability (percent- age) multiplier, project and contract accounting fields, and several project and resource classification fields. Time Keeping Software Traditional project management software assumes that task progress will be entered into the system, as start and completion dates and percent complete. It also assumes that actual resource usage will be entered di- rectly into the resource assignment records, on a task-by-task basis. But this is not normally the best way to enter resource time data. Most traditional project management software tools now provide a timesheet view, which facilitates the entering of time spent on tasks, as well as supporting manager review and approval of such entries. These features will optimize and 148 RESOURCE LEVELING, GAMES OF CHANCE satisfy the needs for time keeping, from the project point of view. However, they tend not to be robust enough to meet the resource accounting require- ments of most firms. If you are to avoid the redundancy of operating two time- keeping systems (project and accounting), you will need to consider specialized project timekeeping software. Such tools are designed to interface directly with many of the popular project management software packages, while being robust enough to provide management-level features and a tie-in to corporate ac- counting systems. Tool Tip It is important for these software packages to allow the user to design a time capture input form or view that will allow time sheet data to be entered on a resource by resource basis, across multiple projects. A key difference between a full-featured time keeping program and just a time input form is the level of administrative control provided. We can see this by look- ing at the attributes of one of the special timekeeping programs that have been developed for use with project management software. This product is representa- tive of a myriad of excellent add-on products for timekeeping. Time$heet Professional, from TIMESLIPS Corporation, has been around for several years. It has features and capabilities suitable for large resource groups. A data exchange utility is included with the product, supporting data transfer to and from many CPM products. Time$heet Professional is a corporate time and project tracking software using a timesheet metaphor. While it can be used as a stand-alone program, it works very well as an adjunct program with traditional project management software. It tracks time and expense data for projects, clients, employees, and tasks. Custom reports support multiproject consolidation, with several analysis op- tions. A Stopwatch Timer automatically records time spent on tasks. Many of the terms can be customized to match the corporate jargon. Tasks can belong to billing groups or cost centers. Using the data exchange utility, projects and tasks, with their assignments, can be downloaded to Time$heet Professional, and the entered timesheet data can then be brought back over to the project manage- ment software. Similar capabilities are available in products such as Time Control (HMS) and Time Wizard (AC Software). And don’t forget that many of these features are available in modules that are packaged with traditional CPM systems. Whoops! Gotta run. They’re opening up a new blackjack table. NON-CPM RESOURCE TOOLS 149 [...]... dozen project management experts to list the primary functions and protocols of scope, schedule, and resource management, they would speak with almost a single voice Although there might be variations in emphasis and style, the fundamentals would follow a similar philosophy and purpose But not so for cost management Ask those same dozen project management experts about cost and you might get 15 opinions... of project management and ERP tools is covered in Section 10 CHAPTER 5. 1 CONCEPTS AND ISSUES OF PROJECT BUDGETING AND COST CONTROL Who Needs Cost Management? I n every firm, cost management will exist in some form, usually under the control of the finance function Our problem as project managers is that often that form is not consistent with the project management function, and that the cost data... general requirements and issues of project budgeting and cost control We do this in Chapter 5. 1 Software Support for Cost Management Regardless of your methods for cost management, it will not be done on the back of an envelope The question is whether you will use special cost management SOFTWARE FOR COST MANAGEMENT 161 tools, basic CPM tools, or integrated systems We discuss the options and make some generalized... not be practical to do this Thus, a computer-assisted decision process, fine-tuned by the project team, on a short time frame basis, would appear to be the way to go SECTION 5 BUDGETING AND COST CONTROL Cost Management: The Weakest Link A generic definition of project management would undoubtedly talk of planning, controlling, and balancing the scope, schedule, resource, and cost aspects of the project. .. more detail than project accounting, facilitating greater control and performance ABC is heavily promoted by Dekker, Ltd Dekker TRAKKER is a product that integrates many project management and project accounting elements, and facilitates integration of project management with Generally Accepted Accounting Practices (GAAP) ABC is very useful when you need to perform detailed costing and profit analyses,... associated with project closeout that are not accounted for The budget should allow for project closeout costs, including punch list items and disposition of resources and assets Functions and Subsystems Associated with Cost Management There are several functions and subsystems that are often associated with cost management Some are erroneously believed to be the equivalent of cost management, but... management system Project accounting is not cost management Most often, a project accounting system is no more than assigning an ID number to each authorized project so that costs can be allocated to projects There is no budgeting within the project and there is no facility to evaluate performance or to know whether anything is wrong Activity-based costing (ABC) is a process wherein the budgeting and. .. about project management, discussion of the latter item, cost, tends to get the least attention This is often carried over to the design of software for project management Many of the heavy-duty products, at least back before the PC era, addressed scope, schedule, and resource management and ignored cost management entirely They left the design of the cost component of the software up to the user And. .. The schedule and cost plan must be integrated Phases of Cost Management and Sources of Data There are several phases of cost management These may include: • • • • • • • • • Proposal or preplanning phase Spending authorization Project cost plan (or budget) Collection of actual cost data Billing and chargebacks Cost performance analysis Remedial actions Replanning End of project analysis and recommendations... Chapter 5. 2 There are additional topics that impact on this subject of budgeting and cost control Change control and managing costs associated with scope changes are discussed in Chapter 7.1 The area of performance management, including using cost variance measurements for measuring performance, is covered in Section 8 Project portfolio management is discussed in Section 9 The integration of project management . and resource assignments. • Analyze and report schedule and resource information, oriented by project and by resource structures. These are all functions that are fully supported by project management. definition of project management would undoubtedly talk of plan- ning, controlling, and balancing the scope, schedule, resource, and cost as- pects of the project. Yet, when we read about project management, . em- phasis and style, the fundamentals would follow a similar philosophy and purpose. But not so for cost management. Ask those same dozen project management experts about cost and you might get 15 opinions.