Integrated Master Schedule (IMS)

Project Management: Earned Value Consulting; Could You Use Some?

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Failed Projects

A recent article discussed the results of a survey on the reasons that projects failed. The definition of failure was that the project was abandoned. Abandonment does not occur frequently in the world of government projects; especially defense projects where there should be strong “must have” needs driving the project. These projects tend to persist until completed even though the outcomes are not satisfactory. But there is a lot to learn from the list of reasons for failure.

Of the sixteen reasons listed, the top four had to do with changes to the environment that had given rise to the project. For example, changes in the company priorities was the most often cited reason for abandonment. In that same vein were issues with changing objectives and inaccurate definition of requirements. These types of failures are not topics for this blog since they do not immediately involve execution of the project.

Execution Problems

Lower on the list of those environment related reasons for failure were the ones more related to execution problems. These are of significant interest to a project management using an earned value consulting company such as Humphreys & Associates (H&A). These reasons related more to issues of poor project management that could have been corrected. In this area were reasons like “poor change management,” “inaccurate cost estimates,” “inaccurate time estimates,” and “inexperienced project management.”

The answers given in a survey situation depend very much on the mindset of the person responding. Is the reason really “inaccurate cost estimates” or should it have been “failure to execute to the estimate”? How many times have you seen a problem in execution “swept under the carpet” as being an inaccurate estimate or plan? One of these two answers points to the estimating system and process while the other points to project management. The estimates were generated; and, at some point, they were deemed to be sufficiently detailed to launch the project. If a scrubbed and blessed estimate is “inaccurate” that would still be a failure of project management. If the problem were really a failure to execute, then how easy would it be to blame the problem on poor estimates? This blog will discuss the cited failures as if they were execution failures.

Earned Value Management (EVM) Consultant Specialists

There are situations in life where the need for specialized advice is common and well accepted by us all. When your doctor is unsure of the medical issues, the doctor will send you to a specialist. The reason is obvious. The specialist has learned so much more about a specific problem and has so much experience diagnosing and treating the problem that it would be foolish not to secure the services of that specialist. In fact, it might be malpractice. A project management consultant can be thought of much like a medical specialist.

There are similar situations in business where the need for specialized knowledge is critical. Large companies tend to have in-house legal departments to cover the day-to-day legal issues and tasks that are central to their businesses. However, the need to go to outside counsel for large or unusual issues is accepted. Companies do not hesitate to engage the services of outside law firms to help them through troubled times. Project management consultants are like outside counsel.

What if there were a project management or earned value management situation you have never encountered before? A good example would be the times that H&A has been called in to help clients navigate the unhappy circumstances of needing to go over-target. Going through the over-target-baseline (OTB) or over-target-schedule (OTS) process is not a common experience. It is a tense time when careers can be on the line and the company reputation might also be at risk. It takes specialized knowledge to get it right. In some cases, it even takes the objective view of an outsider to help make the right decisions.

Specialized Knowledge

Another example of specialized knowledge being crucial is when the customer has deemed some issue on the project to be deficient. In some situations, a customer’s Corrective Action Request (CAR) can result in cost penalties and damaged reputations; possibly even worse consequences could result. Engaging the services of an EVM consultant with experience in identifying problems, building Corrective Action Plans (CAP)s, and leading or helping implementing the corrective actions is often a valuable and necessary action. Ask yourself how smart it would be to assume that those who were involved in causing the issue would be capable of creating a satisfactory solution.

These scenarios are aligned with the idea of project management consulting being something you only need in a crisis. There are other non-crisis needs for specialized support. Often H&A is engaged simply to help a client prepare a proposal. A proposal situation puts heavy demands on the company staffing levels and can require areas of specialized knowledge not available in the company. What if the company has never created a fully compliant Integrated Master Schedule (IMS) and they could use help the first time? What if there are not enough trained and experienced schedulers to work on the proposal? What if the company does not have a documented project management system?

Make or Break Opportunities

Projects can be huge and risky. They can be make-or-break opportunities to a company. Where so much can depend on good project management, smart companies recognize the need for an outside opinion and outside talent. Just like the internal legal department, the internal project management group sometimes needs to call on outside subject matter experts. While it might be obvious, let’s look at some reasons why this is true.

There are more ordinary everyday reasons to engage a project management consultant. Perhaps an organization just managed to win a new project bigger than any they have won before. In this case, they may not be ready to handle the project in terms of experience, systems, and even just talented headcount. A project management consulting company such as H&A can bring solutions to your earned value woes. It can also provide temporary training staff to get things going until the client is ready to take over.

Poor Communication

Let’s get back to the survey of reasons that projects failed. Are there issues on the list where project management consulting could have made a difference? Imagine an improved project management process and staff after a period of consulting to support creating or improving systems and training personnel?

The fifth most frequent reason for failure is “poor communication.” A good project management system with trained personnel is all about communication. Communication of plans, communication of progress, communication of issues, and communication of corrective actions are all actions required in a project management system. Quite often the problem of “poor change management,” cited as the sixth most common reason for failure, is reduced or eliminated after using the consulting services of a specialist?

What about the twelfth cited problem of “inadequate resource forecasting”? Would a well built and maintained resource-loaded Integrated Master Schedule (IMS) go a long way in providing forecasts of resource needs and the impacts of not having the resources? In fact, a proper IMS would help with several of the cited reasons for failure, such as inaccurate duration estimates. In fact, the application of a process, such as Schedule Risk Analysis (SRA), with the help of an experienced consultant can identify such issues in advance while there is still time to take action.

Earned Value Training

Disregarding the threat of failure as a motivator, the need for constant improvement should be enough reason to consider a project management consultant. We can all laugh at the time-worn clichés of “not-invented-here” or “we’ve never done it that way;” however, these are clichés for a reason. There is resistance to outside help and there is resistance to change. But outside help can be a great logjam breaker. An experienced and knowledgeable consultant can be your voice when you need someone who has, to use another cliché, “been there and done that.”

In fact, our consultants can laugh when they say they have “been there” and they have more than a T-shirt to prove it.

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Along the IMS Time-Now Line

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Arrows moving to the right.Recently one of our consultants was instructing a session on the Integrated Master Schedule (IMS) with a group of project personnel from one of our larger clients. The group was a mixture of beginners with no real experience in schedules and some much more experienced practitioners; some with more than 10 years of experience. The mixture made it somewhat difficult, but it also made for some interesting discussions that might have been missed in a more homogenous group. One of those things was the usefulness or importance of the “time-now” line.

When the group was asked about the importance of the time-now line and what information could be easily gained from a look at the line, there was silence. The beginners did not have a clue but also none of the experienced people had any response. What should have been a short discussion with just one “slide” as a visual, turned out to be a longer and more informative session on this topic.

The time-now line has different names in different software tools but it refers to the data date, or status date, of the schedule. That also would be the first day of the remainder of the schedule. When a scheduler sorts tasks by date, the time-now line runs down the screen and forms a highly useful visible reference.

In the small example below [see Figure 1], you can see the time-now line and visually assess the situation. Time-now is shown by a vertical line at the beginning of September, so all remaining effort has been scheduled to after that date. In other words, no work can be forecasted in the past. A walk down the line shows Task 1 has both started and completed. Task 2 started but has not completed. In fact, the remaining work in Task 2 has been pushed out by the time-now line. The start of Tasks 5 and 9 are also being pushed out by the time-now line. In most real project schedules, filters and other techniques may be needed to isolate information like this; but in our small example, we can simply “eyeball” the time-now line and see valuable information. Task 9 starts the critical path shown in red tasks.

 

The project start date was August 1. The status date is September 1. Tasks 2, 5, and 9 show gaps from the predecessor to their starts. in the case of Task 2 the cap is to the start of the remaining work. This gap is caused by the time-now being set to September 1 with all remaining work starting after that. The critical path is being pushed by time now.Figure 1

 

A slightly different setup for that same small example [see Figure 2] shows something interesting. The time-now line is still at the beginning of September. But now there is a gap between time-now and work on the critical path. This is an unusual situation and should be investigated for the root cause. It is possible this is an accurate portrayal of the situation, but regardless of the cause, it must be verified and explained.

 

Time now is still at September 1. There is a gap on the critical path at the start of Task 9 which, in this case, is caused by a Start-No-Earlier-Than constraint.Figure 2

 

In yet one more variation [see Figure 3], we see that a broken link results in Task 8 ending up on the time-now line. A task without a predecessor will be rescheduled to start at the earliest possible time (if the task is set to be “As Soon As Possible”). And the earliest possible time is the time-now line; the beginning of September. Just as broken things fall to the floor in real life, “broken things” fall to the time-now line in a schedule. Un-started work can land there. Un-finished work can land there. And un-linked work can land there.

It is further possible to see that Task 2 has had an increase in the remaining duration that has driven it onto the critical path. Task 2 at this moment is the most important task on the entire project. A slip to Task 2 will drive out the end date for the entire project. One question that needs answering is what is holding up Task 2?

If the display had been sorted by increasing total float/slack and the usual cascade by date, then the critical path would be starting at the upper left-hand corner; like the critical path in this example. The action on the project is almost always on the time-now line and the most important action, when sorted as described, will be at the upper left-hand corner.

 

Task 2 is now driving the critical path. Task 8 has fallen back to the time now line. The constraint on Task 9 has been removed.Figure 3

 

So, a walk down the time-now line can help us see the critical path action, find broken parts of the schedule, and locate unusual circumstances that need our attention. Our recommendation is to look at the time-now line any time there is data being changed in the IMS. This will help you catch issues early and keep the schedule cleaner.

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Management Reserve; Comparing Earned Value Management (EVM) and Financial Management Views of “Reserves”

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Management Reserve & Earned Value ManagementPerhaps you have witnessed the collision of earned value management’s views on “management reserve” with the Chief Financial Officer (CFO) and the finance department’s views on “balance sheet reserves.” Most companies tend to organize EVM, the function, reporting to either the programs’ organization or to the finance organization. Either will work but either can fail if the two organizations do not understand the interest of the other.

In this article we will outline three areas. The first will be EVM and Management Reserve (MR). The second will be finance and balance sheet “contingencies, loss provisions, or reserves.” The third will compare the two views and identify where they are similar and where they differ.

We will use two terms for both EVM and Financial Management; “in play” and “on the sideline.” “In play” for EVM means that it is in your Performance Measurement Baseline (PMB) and Budget at Completion (BAC). “On the sideline” for EVM means “not in scope” therefore in MR. “In play” for financial management means recorded on the balance sheet (e.g.: current liability; an accrued liability). “On the sideline” for financial management means not recorded on the balance sheet, because it is more likely than not that a liability has been incurred.   If material, however, it will likely be disclosed in the notes to the financial statements, even if it is not recorded on the balance sheet.

 

Earned Value Management and Management Reserve

A program manager and his or her team must deal with – mitigate – risk or be consumed by those risks as they become issues. There are two types of risks, known and unknown. The known risks are entered into a risk register, and their likelihood and consequence are determined. Mitigation for those known risks is done at the activity level in a program’s Integrated Master Schedule (IMS) (Planning and Scheduling Excellence Guide — PASEG page 141, ¶ 10.3.1). Mitigation of known risks is part of the PMB (in the BAC) and is therefore “in play.”

The second type of risk – unknown or unknowable risks – are covered by management reserve if within the Scope of Work (SOW) of the existing contract. If contractor and customer conclude that the realized risk is outside the existing contract, then an Engineering Change Proposal (ECP) would likely be created by the contractor; and a contract modification would be issued by the authorized customer contracting officer if they agreed.   The program manager should ask this question of his team: what work is “at risk” and what work is not “at risk?” Does labor or material present more risk? Management reserve “is an amount of the overall contract budget held for management control purposes and for unplanned events” (Integrated Program Management Report–IPMR DI-MGMT-81861 page 9, ¶ 3.2.4.6). Management reserve is “on the sidelines.” MR has no scope. MR is not earmarked. MR stands in waiting.

 

Earned Value Management Reserve (MR) Compared To Financial Management “Contingency”

Because the audience reading this blog is most likely from the EVM community, I’ll offer a Financial Management example of a company that faces many risks and must manage those risks or be consumed by them. Altria Group, Inc. and Subsidiaries (stock symbol: MO) are in the tobacco, e-Vapor and wine business. Altria’s history clearly shows that the company measures and successfully mitigates the risks they face. Altria faces a blizzard of litigation each year and must protect its shareholders from that risk. So how does Altria manage known risks (mostly from litigation) and how does Altria handle unknown risks?

Altria is a publicly traded company and its annual report (10K) is available on-line to the public. This data is from their 2014 annual report.

I am an MBA, not a CPA, so I’ll stick to Altria’s 2014 balance sheet. For those not familiar with financial statements, a balance sheet has on its left hand side all of a company’s assets – what the company owns and uses in its business (current assets = cash, accounts receivable, inventory; long term assets = property, plant and equipment). The right hand side of a company’s balance sheet shows current and non-current liabilities and shareholders’ equity. The top right hand side of the balance sheet includes current and non-current liabilities (accounts payable, customer advances, current and long-term debt, and accrued liabilities like income taxes, accrued payroll and employee benefits, accrued pension benefits and accrued litigation settlement costs) and the bottom of the right hand side of the balance sheet includes shareholders’ equity consisting of common and preferred stock, paid in capital and retained earnings.

Altria’s 2014 annual report shows under current liabilities; accrued liabilities; settlement charges (for pending litigation Contingency note # 18) a value of $3.5 billion dollars. The 2013 amount was $3.391 billion dollars.

So Altria has “in play” $3.5B for litigation for 2014. In financial terms, Altria has recorded $3.5 billion in expense related to the litigation, probably over several years as it became more likely than not that a liability had been incurred and was reasonably estimable. In EVM terms Altria has $3.5B in their baseline, or earmarked, or in scope for litigation (court cases).

What happens if Altria ultimately has more than $3.5B in litigation settlement costs? What does Altria have waiting on the “sidelines” to cover the unknown risks? Essentially Altria has on its balance sheet waiting “on the sidelines” $3.321 billion in cash and the ability to borrow additional funds or perhaps to sell additional shares of stock to fund the settlement costs. In EVM terms Altria has $3.5B in its baseline (on its balance sheet) to manage the risks associated with litigation. Altria’s market capitalization at the market close on May 17, 2015 was $52.82 billion and its 2014 net revenues were $24.522 billion. It is reasonable to understand that Altria has more than enough MR.

 

Differences Between EVM MR and Financial Management Balance Sheet Reserves

In EVM, MR is only released to cover unplanned or unknown events that are in scope to the contract but out-of-scope to any control account. A cost under-run is never reversed to MR, and a cost over-run is never erased with the release of MR into scope.

In industry in general, and Altria in particular, if the “in play” current liability for settlement charges of $3.5B are not needed (an under-run), then Altria will reverse a portion of the existing accrued liability into income, thereby improving profitability. If Altria’s balance sheet reserve of $3.5B is insufficient, then Altria’s future profits will be reduced as an additional provision will be expensed to increase the existing reserve (an over-run).

[Humphreys & Associates wishes to thank Robert “Too Tall” Kenney for authoring this article.]

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Variance Analysis, Corrective Action Plans, Root Cause Analysis

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Variance Analysis “provides EVMS contract management with early insight into the extent of problems and allows corrective actions to be implemented in time to affect the future course of the program.” [NDIA ANSI EIA 748 Intent Guide] Department of Defense Data Item Descriptions: DI-MGMT-81861, Integrated Program Management Report (IPMR) paragraphs 3.6.10xx; DI-MGMT-81466A, Contract Performance Report, paragraph 2.6.3; and DI-MGMT-81650, Integrated Master Schedule (IMS) — paragraph 2.5 — all require analysis for significant variances including cause, impact and corrective action plans.  By comparing the performance against the plan, it is possible to make mid-course corrections which assist completion of the project on time and within the approved budget. The Variance Analysis Report (VAR) is a “living, working document to communicate cause, impact and corrective action”. [See: Chapter 35 Variance Analysis and Corrective Action, Project Management Using Earned Value, Humphreys & Associates, page 707.] Well-written variance analyses should answer the basic questions of why, what and how.

Cause is also known as root cause, nature of the problem, problem statement, issue, or problem definition. Root cause is the fundamental reason for the problem. Root cause is required in order to take preventative corrective action. The explanation of the variance is broken down into each of its components: discuss schedule variances separately from cost variances; discuss labor separately from non-labor; discuss which portion of the variance was caused by efficiency (hours) and which portion was because of dollars (rates) or if the variance was driven by material discuss how much was because of price and how much was because of usage. For more information refer to Humphreys & Associates blog Variance Analysis-Getting Specific.

Once the root cause of the problem has been identified and described, the impact(s) on the project should be addressed. Identify impacts to customers, technical capability, cost, schedule (including when the schedule variance will become zero), other control accounts, program milestones, subcontractors, and the Estimate at Completion, including rationale.

A corrective action (CA) plan should be developed that describes the specific actions being taken, or to be taken, which includes the individual or organization responsible for the action(s). The corrective actions should be directly derived from root cause analysis and related to each identified root cause.   Results from previous corrective action plans should be included.  Occasionally, a successful plan will include interim modifications or fixes in the short term, with long term changes identified as well. When no corrective action for an overrun is possible, an explanation and EAC rationale should be included.  A corrective action log should be used that tracks the actions taken and the status of the corrective plan for each variance analysis cycle.  As was stated in the Humphreys & Associates article:  Corrective Action Response: Planning and Closure – Part 2 of 2  “It is critical that verification methods, objective measures, metrics, artifacts, and evidential products are identified that will verify that the corrective actions are effective.”  Corrective action plans based on clearly a defined root cause facilitates time management action and avoids the occurrence of repetitive problems.

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Schedule Health Metrics

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What are Schedule Health Metrics?

Schedule Health Metrics by Humphreys & AssociatesAt the heart of every successful Earned Value Management System (EVMS) is a comprehensive Integrated Master Schedule (IMS) that aligns all discrete effort with a time-phased budget plan to complete the project.  As such, the IMS must be complete and accurate to provide the necessary information to other EVMS process groups and users.  The IMS may be a single file of information in an automated scheduling tool, or a set of files that also includes subcontractor schedules.

For any medium to large project, the IMS may contain thousands of activities and milestones interconnected with logical relationships and date constraints to portray the project plan.  Schedule Health Metrics provide insight into the IMS integrity and viability.

Why are Schedule Health Metrics important?

For a schedule to be useable, both as a standalone product and as a component of the EVMS, standards have been developed to reflect both general scheduling practices and contractual requirements.  Schedule Health Metrics contain checks designed to indicate potential IMS issues.  Each check has a tolerance established to help focus on particular areas of concern.  The individual metrics should not be considered as a pass or fail score, but should be used as a set of indicators to guide questions into specific areas of the IMS.

For example, if there is an unusually large number of tasks with high total float properties, a review of the logic in the IMS is warranted.  At the end of the analysis, if the Control Account Manager (CAM) responsible for the work, with the help of the Planner/Scheduler, can explain why the high float exists, then the issue is mute.  Metrics are simply a method to help isolate issues in a large amount of data.  In this example, the analysis will continue to depict issues with this CAM’s data, but those issues are not indicative of failure.

What are the standards?

From the beginning of automated scheduling systems in the 1980’s, attempts have been made to take advantage of the scheduling databases for the purpose of metrical analysis.  The maturity of scheduling software tools has provided better access to metrics in both open architecture databases and with export capabilities to tools such as Microsoft’s Excel and Access products. With the availability of the new tools, new analysis techniques were developed and implemented.

Several years ago, the Defense Contract Management Agency (DCMA) reviewed the various Schedule Health Metrics being used within the US Government and selected 14 tests they believed to be the best tests of an IMS.  Because they support a wide variety of customers from the DOD, NASA, and DOE, they have developed these checks with thresholds that should be common to all types of programs, but not specific or restrictive to a particular one. The thresholds help bring focus to the issues in the schedule under review.  With agreement between the customer, the DCMA and the contractor, they may be altered in some cases to reflect the unique nature of a project.

Unless otherwise indicated, the DCMA Health Metrics apply only to incomplete activities or tasks in the IMS, not milestones, with baseline durations of 1 day or longer. This set also excludes Level of Effort (LOE) and Summary tasks because they should not be driving the network.  The DCMA 14 point Schedule Health Metrics are:

1.  Missing Logic

The test: The percentage of incomplete activities that do not have a predecessor or successor.

The threshold: 5%.

For a schedule to function correctly, the tasks must be logically linked to produce a realistic mathematical model that sequences the work to be performed.

2.  Activities with Leads

The test: The percentage of relationships in the project with lags of negative 1 day or less.

The threshold: 0%.

The project schedule should flow in time from the beginning to the end.  Negative lags, or leads, are counter to that flow and can make it more difficult to analyze the Critical Path.  In many cases this may also indicate that the schedule does not contain a sufficient level of detail.

3.  Activities with Lags

The test: The percentage of incomplete activities that have schedule lags assigned to their relationships.

The threshold: 5%.

An excessive use of lags can distort an IMS and should be avoided.

4.  Relationship Types

The test: The percent of Finish to Start relationships to all relationships.

The threshold: 90%.

A project schedule should flow from the beginning of the program to the end.  Finish to Start (FS) relationships are the easiest and most natural flow of work in the IMS, with the occasional Start to Start (SS) and Finish to Finish (FF) relationship as required.  Start to Finish relationships should not be used because they represent a backward flow of time and can distort the IMS, as do the overuse of SS and FF relationships.

5.  Hard constraints

The test: The current definition includes any date constraint that effects both the forward and backward pass in the scheduling engine.  These include any date constraint that says ‘Must’ or ‘Mandatory’, ‘Start On’ or ‘Finish On’, and ‘Start’ or ‘Finish Not Later Than’ date constraints.

The threshold: 5%.

Hard constraints limit the flexibility of the IMS to produce reliable Driving Paths or a Program Critical Path.  Techniques using soft constraints and deadlines can allow the schedule to flow and identify more issues with float values.

6.  High Float

The test: Percentage of tasks with High Total Float values over 44 days.

The threshold: 5%.

A well-defined schedule should not have large numbers of tasks with high total float or slack values.  Schedules with this condition may have missing or incorrect logic, missing scope or other structural issues causing the high float condition.  The DCMA default threshold of 44 days was selected because it represents two months of effort.  Individual projects may wish to expand or contract that threshold based on the length of the project and the type of project being scheduled; however, any changes in thresholds should be coordinated with the customer first to confirm the viability of the alternate measurement.

7.  Negative Float

The test: The percentage of activities that have a total float or slack value of less than zero (0) days of float.

The threshold: 0%.

When a schedule contains tasks with negative float, it indicates that the project is not able to meet one or more of its delivery goals. This is an alarm requiring redress with a corrective action plan.  Please see the Negative Float blog for additional discussion.

8.  High Duration

The test: A percentage of tasks in the current planning period with baseline durations greater than 44 days.  This check excludes LOE, planning packages and summary level planning packages.

The threshold: 5%.

Near term tasks should be broken down to a sufficient level of detail to define the project work and delivery requirements.  These tasks should be shorter and more detailed since more is known about the immediate scope and schedule requirements and resource availabilities.  For tasks beyond the rolling wave period, longer duration tasks in planning packages are acceptable, as long as the IMS can still be used to accurately develop Driving Paths to Event Milestones and a Program Critical Path to the end of the project.

9.  Invalid Dates

The test: Percentage of tasks with actual start or finish dates beyond the Data Date, or without actual start or finish dates before the Data Date.

The threshold: 0%.

The check is designed to ensure activities are statused with respect to the Data Date in the IMS.  Claiming actual start or finish dates in the future are not acceptable from a scheduling perspective, but can also create distortions in the EVM System by erroneously claiming Earned Value in the current period for future effort.  Alternately, if tasks are not statused with actual start or finish dates prior to the Data Date, then they cannot be logically started or finished until at least the day of the Data Date, if not later.  If the forecast dates are not moved to the Data Date or later, the schedule cannot be used to correctly calculate Driving Paths to an Event Milestone, or calculate the Program Critical Path.

10.  No Assigned Resources

The test: Percentage of incomplete activities that do not have resources assigned to them.

The threshold: 0%.

This is a complex check because of two basic factors: 1) resources are not required to be loaded on tasks unless directed by the contractor’s internal management requirements, and 2) some tasks such as Schedule Visibility Tasks (SVTs) and Schedule Margin tasks should not be associated with work effort.  If the contractor chooses not to load resources into the schedule the options are:

  1. Associate basic quantities of work with tasks and define in a code field, transfer those quantities to the EVM cost system and verify the traceability between the IMS quantities and the associated budgets in the cost system.
  2. Maintain the budgets entirely in the EVM cost system and provide a trace point from the activities in the IMS to the associated budgets in the cost system.  The trace points are usually in the form of control account and work package/planning package code values.

In either case, care must be exercised so that Schedule Visibility Tasks are reviewed and confirmed to ensure that work is not misrepresented to either the contractor or the customer.

11.  Missed Activities

The test: Percentage of completed activities, or activities that should have been completed based on their baseline finish dates, and failed to finish on those dates.

The threshold: 5%.

Many people view this as a performance metric.  That is true, but it is also used to review the quality of the baseline.  For example, if a project has a 50% failure rate to date, what level of confidence should the customer have in future progress?  Is the baseline a workable plan to successfully complete the project?  Does the EVM System reflect the same issues as the IMS?  If not, are they correctly and directly connected? These are questions that should be addressed by the contractor before the customer or other oversight entities ask them.

12.  Critical Path Test

The test: Select a task on the program Critical Path and add a large amount of duration to that task, typically 600 days.

The threshold: The end task or milestone should slip by as many days as the delay in the Critical Path task.

This is a test of the integrity of the schedule tool to correctly calculate a Critical Path.  If the end task or milestone does not slip by as many days as the artificial delay, there are structural issues inhibiting this slip.  These issues may be logic links, hard constraints or other impediments to the ability of the schedule to reflect the slip.  These issues should be addressed and corrected as the schedule data is to be relied upon to provide meaningful information to management.

13.  Critical Path Length Index (CPLI)

The test: The Critical Path length + the Total Float on the Critical Path divided by the Critical Path Length.  This formula provides a ratio that puts the Critical Path Float in perspective with the Critical Path length.

The threshold: .95 or higher.

If the program is running with zero (0) Total Float on the Program Critical Path, then the ratio is 1.00.  If there is negative float on the Program Critical Path, then the ratio will fall below 1.00 which indicates that the schedule may not be realistic and that project milestones may not be met.

14.  Baseline Execution Index

The test: The number of completed activities divided by the number of activities that should have been completed based upon the baseline finish dates.

The threshold: .95 or higher.

This check measures the efficiency of the performance to the plan.  As such, some people also dismiss this as a simple performance metric, but as in the case of Metric #11 (Missed Tasks), this is also a measurement of the realism of the baseline plan.  As in Metric #11, if the schedule performance is consistently not to the plan, how viable is the plan?  How viable is the EVMS baseline?  How accurate is the information from the baseline that Management is using to make key decisions?  Metrics #11 and #14 may reflect the result of the effort being performed on the contract, but also represent the quality and realism of the baseline plan.

What are additional metrics that help identify schedule quality issues?

The DCMA’s 14 point schedule assessment should be considered a basic check of a schedule’s health, but by no means is the only check that should be used to analyze an IMS.  More industry standard checks are identified in other documents, including the Planning and Scheduling Excellence Guide (PASEG) revision 2.0 (6/22/12). The PASEG is a National Defense Industrial Association (NDIA) product and was developed in cooperation between industry and the Department of Defense. Section 10.4, Schedule Execution Metrics, discusses in greater detail some of the Health Metrics identified above, as well as other metrics including the Current Execution Index (CEI) and the Total Float Consumption Index (TFCI).

In addition to these metrics, checks should be performed on activity descriptions, activity code field values, risk inputs, Earned Value Techniques and other tests to assure alignment of the IMS with its partner information systems.  These systems include, but are not limited to the MRP system, the cost system, program finance systems and the risk management system.  The IMS in an integral component of a company’s management system, therefore issues with the IMS data will be reflected in the other components of the EVMS.

All of the above health checks can be performed manually with the use of filters and grouping functions within the scheduling tool; however, they may take too much time and effort to be successfully sustained.  The marketplace has tools available to perform these and other checks within seconds, saving time and cost, allowing schedule analysts and management to devote valuable time to address and resolve the issues.  With the aid of these tools, a comprehensive schedule health check can be performed as part of the business rhythm instead of an occasional, time available basis.

Summary

Schedule Health Metrics are an important component of the schedule development and maintenance process.  While the DCMA has established some basic standards for schedule health assessments, the 14 metrics should not be considered the only checks, but just the beginning of the schedule quality process.

Schedule checks should be an integral part of the schedule business rhythm and when issues are identified, they should be addressed quickly and effectively. Significant numbers of tasks that trip the metrics, or persistent issues that are not resolved, may require a Root Cause Analysis (RCA) to identify the reasons for the problems and to develop a plan to address them.

Give Humphreys & Associates a call or send us an email if you have any questions about this article. 

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