Most people agree that projects seem to take longer and longer. I ask students, “Does everyone know what contingency is?” All participants usually signal that they do indeed understand it. Then I ask someone to define it. A lot of wiggling in place usually follows the question, but even- tually someone offers an answer along the lines of “extra time or money to handle the unexpected.” I then ask, “Extra compared to what?” More puzzled expressions. I refer to Figure 3.2 as an example of the variation in task performance (which they have seen during a previous estimating
exercise) and ask, “Isn’t it a huge difference if you add contingency to the 50% probable task estimates, as compared to adding it to the 90%
probable task estimate?” They all agree and understand that the word con- tingency can have a vast difference in meaning, depending on how you choose to interpret the base. I offer an operational definition: “Contingency is the difference between a 50% probable estimate and a 90% probable estimate.” If you do not like that definition, you are welcome to change it.
Just be sure that the people you are dealing with use the same meaning.
Everyone wants to have a successful project. One necessary condition to a successful project is to have the project complete on schedule. To have projects complete on schedule, every task on the critical path must complete on schedule. To have every task on the critical path complete on schedule, we must plan each task to include the contingency (as previ- ously defined), because we know that there is uncertainty in task per- formance. That is the only way to do it with the current CPM. Further, because you find out the critical path only by estimating all the project tasks and connecting the network, you have to include contingency in all the task estimates.
Project managers generally agree that they want people to keep their commitments and deliver on their task delivery date. People generally
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0 0.5 1 1.5 2 2.5
Contingency
Scheduled duration
Cumulative completion probability Relative completion probability
Figure 3.2 Variation in estimates for the time to perform a task helps define contingency.
agree that, in their organizations, people who complete tasks on time are good performers, and people who do not complete on time are considered poor performers. They acknowledge that when project managers ask for input on task times, they want contingency included in the estimates.
Usually, there is also pressure to plan to complete projects as soon as possible. In competitive bid situations, the bidder that can complete sooner usually has an edge. Everyone knows that planning to com- plete the project sooner tends to reduce project cost, thereby helping make a competitive bid. For those performing R&D projects, the impact of a shorter development may be the difference between the success and the failure of the project. For deadline-driven projects, a shorter plan time usually alleviates the pressure to start now.
For all those reasons, in order to plan a successful project, the project manager must have a shorter critical path for the project. To have a shorter critical path for the project, the project manager must have shorter task estimates that do not include contingency.
Figure 3.3 is the evaporating cloud for that dilemma. Of course, we cannot have both 50% probable task estimates and high-probability task estimates; thus, there is a conflict. In many environments, that conflict plays out by the task estimators proposing high-probability estimates and management, including the project manager, reducing those estimates as a challenge or “stretch” goal. The time cuts usually do not have a method to achieve the time reduction—they are arbitrary. Usually, people know that management still expects them to achieve the low-probability task times. They go into the schedule as fixed dates, and management will request status relative to that date.
A Short project
duration
B Keep my delivery
commitment
D
Include contingency in task times
C
Reduce the critical path time
D Do not include
contingency
′
Figure 3.3 Task time conflict.
Task performers tend to accept the challenge. They really have no option. There is considerable pressure to be a team player and to do your part. Subcontractors often have the same pressure—meet the reduced time or we will give the work to someone else. Experienced people justify accepting the situation as a management-dictated version of the chicken game. (Remember those 1950s teenage rebellion movies in which two drivers raced toward a cliff or toward each other to see who would veer off or stop first?) People on a project know that what is happening to them is also happening to every other task on the project. If they agree to the time cut, it is likely that reality will strike some other project task before it gets them, causing management to chicken out and extend the project time.
That gives them the time they need to complete their task on time, so they can win in the system. If they were to object to the time cut, they would lose immediately because management would brand them as nonperformers or nonsupporters. They have no choice in the real world of power politics.