Using project complexity determinations to establish required levels of project rigor
Thomas D. Andrews, Project & Risk Management Division Manager
National Security Technologies, LLC
The concepts discussed in this paper (1) focus on using technical competencies and skills in making objective determinations regarding project complexity based on objective scoring criteria, and (2) using the complexity determinations to establish the level of rigor required in initiating, planning, executing, monitoring and controlling, and closing projects to maximize process efficiency.
This paper presents a project complexity analysis methodology for defining the levels of project management process rigor a project team needs to employ to maximize project delivery efficiencies without compromising quality and performance. Methods for making project complexity determinations based on project lifecycle size, duration, organizational complexity, requirements, technology readiness, risk, and visibility are discussed. The paper correlates the levels of rigor needed by project management process groups given the determined level of project complexity. Next, the paper presents a graded approach to defining extent of team formation, planning documentation rigor, stakeholder communication rigor, requirements management rigor, acquisition planning, risk management, executing, and monitoring and controlling rigor dependent on project complexity determinations. Methods for integrating and aligning the project complexity determination methods into existing project management procedures and processes are also discussed as well as methods for training personnel in the use of the method and facilitating and monitoring effectiveness of implementation within an organization in which project delivery is a mission focus.
This paper is organized into the following content areas:
- Introduction: How and when to define project complexity, the value to the project team and the organization.
- Part 1: Process and Implementation:
- Establishing complexity determination methods and approach.
- Establishing levels of rigor for activities in each project management process group based on complexity levels.
- Integrating complexity determination processes into existing procedures and processes.
- Vetting complexity determination processes and procedural impacts with users and supporting effective implementation.
- Part 2: Monitoring, measuring, and verifying effectiveness
For the purpose of this paper, I draw examples from my company's implementation of the project complexity determination process within our organizational procedures in which we defined three complexity levels for projects: low, medium, and high. The determination of the appropriate complexity level for a given project is defined using example criteria that were established and proceduralized in my organization, which conducts a wide range of projects varying from software development, traditional engineering and construction type projects, environmental cleanup projects, unique testing and exercise events, as well as scientific research and development type projects.
The Key Questions
How is project complexity defined?
Project complexity is determined in my organization by evaluating project attributes using the seven criteria listed below:
- Life-cycle size for cost,
- Life-cycle duration for schedule,
- Project organization complexity,
- Technology readiness,
- Visibility, and
- Authorization basis.
When is project complexity best determined?
Project complexity should be determined no later than the start of the Planning Phase and should be re-validated prior to baselining the project. Early determination is encouraged, however, even during the Initiation Phase.
What is the value to the project team of project complexity determinations?
Early project complexity determination allows the project team to focus its resources on applying an appropriate level of rigor given their assessment of complexity in the seven criterion areas listed above and eliminates unnecessary initiation and planning effort and documentation development.
What is the value to the organization?
The use of project complexity determinations maximizes the level of efficiency with which projects can be initiated, planned, executed, and closed. This makes the organization more competitive and provides increased value to the customer.
Part 1: Process and Implementation
Establishing complexity determination methods and approach
It is important to align the complexity determination process with the project types, environments, and areas of project specialization an organization is involved with. As an example, the use of “authorization basis” in the criterion listed above reflects my organization's work with nuclear projects, which require extensive authorization bases including the development and implementation of documented safety analysis, technical safety requirements, and operational readiness reviews as part of the commissioning effort.
It is also important to scale the complexity determinations to the project types and complexities the organization is involved in. As an example, the range of project size in cost for my organization typically ranges between US$100,000 and US$30 million and life cycle schedule durations can vary from as short as one month to three years. Larger companies that are involved in mega-projects would be required to develop larger scales ranging from US$100 million up to multiple billion dollar ranges with life cycle schedule durations of one to ten years.
Establish levels of rigor for activities in each project management process group based on complexity levels
Developing Project Management Plan
One size does not fit all. A low complexity project in our organization may only need a two or three page Project Management Plan whereas a highly complex project may need a 50 to 100 page plan.
Low complexity, quick-delivery projects, such as software development/modification, may only require a small dedicated team with similar expertise, whereas highly complex projects may require teams in excess of 50 to 100 persons with a wide range in expertise and skills from scientist to engineer to craft worker.
The number of organization business units and/or functional departments can vary significantly with project complexity. Low complexity projects may be conducted using only personnel from one business unit, division, or department. Highly complex projects may require resources from multiple business units, divisions, and departments within an organization or even resources from outside the organization. This can significantly impact the level of communication planning, span of control determinations, and stakeholder management challenges a project encounters.
Roles and responsibilities
The definition of roles and responsibilities can be very simple on a low complexity project with a short duration and very involved on a highly complex project with a longer duration. Clearly defining and documenting roles and responsibilities early in a project's lifecycle can make or break the probability of success. A simple responsibility assignment matrix (RAM) may suffice for a low complexity project whereas an extensive RAM cutting through all levels of an organization from senior management to work package manager may be required for a medium or high complexity project.
Work breakdown structure development
Low and medium complexity projects often utilize tried and proven work breakdown structures (WBS) whereas one-of-a-kind highly complex project WBS may require considerable effort in developing and fine tuning to provide effective decomposition of the work effort into manageable work packages and control accounts.
A brief high-level scope of work statement may be sufficient for a low complexity project whereas an extensive scope of work statement and detailed WBS dictionary may be required for medium and high complexity projects, requiring much more effort in development to insure project success.
Requirements collection and definition
The level of requirements collection and definition can vary extensively depending on the complexity of a project with simple narrative for low complexity projects to detailed requirements flow-down matrixes required for higher complexity projects. Nuclear projects require the development of traceable requirements flow-down using relational database applications and the development of facility design and system design descriptions.
Project complexity levels greatly impact the level of stakeholder communication management required, from small projects with one or two stakeholders of known influence to many stakeholders for larger, complex projects that may require stakeholder analyses to determine stakeholder power and influence and methods for managing.
Procurement planning can vary on projects from the purchase of office material for small efforts to involved procurement processes on complex projects in the acquisition of long lead items of major equipment, which may have to be fabricated and tested offsite and/or the use of specialized subcontractors requiring separate schedule, contracts, communications, monitoring, and control.
The range of scheduling effort can vary from a simple spreadsheet with activities and due dates for small projects to extensive logic-driven resource-loaded schedules having hundreds or even thousands of activities using critical path methodology on highly complex projects.
The range of cost estimating necessary can also vary extensively given project complexity, from simple service-based labor hour estimates for low complexity projects to detailed bottom-up cost estimates using crew sizes, labor hours, consumables, bulk materials, vendor pricing, and subcontract pricing as their bases.
Given a project's complexity level, risk management can vary from only an identification and awareness of risk to the use of qualitative and quantitative risk analysis methods (Monte Carlo) to determine confidence levels in cost and schedule performance, development of management reserves, and risk response planning.
Quality management rigor can vary from obtaining certification for a delivered product on a low complexity project to developing project-specific quality plans, requiring QA and QC inspector qualification, performing source and field quality control inspections, documenting the results of those inspections, receipt inspection, and tracking and quarantining of non-compliant materials and equipment for high complexity projects.
The range of cost management required can vary significantly dependent on project complexity with only a simple cost breakdown between materials, labor, and equipment in a spreadsheet for low complexity projects versus the development of detailed cost plans based on the project WBS utilizing integrated planning and scheduling tools with monthly actuals and accruals being collected and entered on a weekly or monthly basis for high complexity projects.
Executive authorization and review
Most companies have defined project authorization thresholds dependent on project size and cost. Smaller projects may only require approval at the division level whereas larger highly complex projects may require multiple levels of approval leading to final approval at the executive office or even board of directors.
Monitoring and controlling
The required level of monitoring and controlling can vary significantly with project complexity levels. Low complexity projects may require only an end-of-project validation of cost and schedule performance if durations are only weeks or a month. Highly complex longer duration projects may require weekly and monthly project team meetings in which status is collected and entered into scheduling applications to determine project status using a wide variety of performance measurement techniques which can vary with work package and control account.
Low complexity, short-duration projects may require only an end-of-project report, whereas highly complex projects may require the collection of status and monthly reporting for long periods of time utilizing earned value management techniques to forecast variances, perform variance analysis, and predict variances at completion for presentation and discussion with stakeholders.
Closing a project of low complexity may be as simple as submitting an invoice to the customer, whereas closing a large highly complex project may require a dedicated report, turnover of documentation, financial analysis, lessons learned reporting, and stakeholder approval/acceptance.
Integrating Complexity Determination Process into Existing Procedures and Processes
Integrate with existing processes
It is important to integrate the project complexity determination process with existing procedures and processes a company is utilizing for project delivery. In my organization, the project complexity determination was added to the company-wide project management procedure during a major rework of that procedure. The project management procedure covered the project development and delivery process in the organization and compliance with the procedure was required across all business units, so it was the ideal location for the project complexity determination process and allowed its integration into the project lifecycle phases that include Initiation, Planning, Execution (included monitoring and control), and Closeout.
Align with industry best practices and standards
Aligning the project complexity determination process with accepted and best industry practices is equally important. As an example in our implementation, we utilized several best industry practices as documented in published standards and dealing with two important factors: (1) technology readiness – referenced use of Level (TRL) scale pioneered by NASA. The TRL scale ranges from 1 (basic principles observed) to 9 (total system used successfully in operation). Refer to DOE G 413.3-4A, “Technology Readiness Assessment Guide,” for complete description (DOE, 2011). (2) Risk – we used qualitative analysis scoring scales as published in Department of Defense Risk Management Guide and Department of Energy Guide 413.3-7, Risk Management.
Clearly define levels of rigor by project complexity level and activities within each process group
In implementing our project complexity determination process we integrated the process into our project management procedure by specifically defining the minimum process group rigor for each complexity level (low, medium, and high) with required steps/activities. The following Exhibit 1 is an excerpt from our Company Directive on Project Management depicting this approach.
Exhibit 1– Steps for medium complexity projects.
Tools (applications, job aids, checklists, templates, and forms)
We developed a job aid (form) and required its use in our Project Management Company Directive at a minimum at the beginning of the Planning Phase, and again just prior to setting the project baseline budget. The example form is provided in Exhibit 2.
Exhibit 2– Project complexity determination form.
People (training and qualification)
Vetting complexity determination process and procedural impacts with users
Once the project management procedure was revised, we went through an extensive vetting process to familiarize the various business units and functional organizations within our company with the new process. Activities included distributing advance copies of the procedure for review, testing of the project complexity determination process and form, receiving comments and feedback from the testing, incorporating the comments and suggestions into the updated procedure and form, and finally publishing the new procedure and complexity determination process. We also held a project management forum with all project management practitioners invited to review and discuss the final published procedure and process.
Training methods to support effective implementation
The most effective means to train project management practitioners in the use of the new process and form for our organization was by facilitating project teams as part their project kick-off activities in the use of the process and form. This was an ideal setting because the project team and subject matter experts were gathered to begin the Planning Phase activities and we had the necessary expertise to address the entire range of criteria identified in the form.
Part 2: Monitoring, Measuring, and Verifying Effectiveness
Management Assessments and Surveillances
Employ appropriate assessment instrument(s) to determine the effectiveness of project management process implementation. These instruments may include formal management assessments, project surveillances, and project reviews, which can be supported by process implementation effectiveness metrics. Our project management organization (PMO) began reviewing the effectiveness of implementation of the new project complexity determination process through the use of these management assessments, project surveillances, and phase gate reviews as part of our normal conduct of operations.
Developing and Reporting Metrics
Developing and reporting metrics from those management assessments, project surveillances, and phase gate reviews helps determine implementation effectiveness. Examples of data collection to support metric development are provided in Exhibit 3.
Exhibit 3– Project complexity determination effectiveness.
Verification of effectiveness involves using the data collected to display, through the use of Pareto charts, the following information for management review and action.
- On what percentage of projects was a project complexity determination conducted?
- On what percentage of the projects did the determination change as the project progressed between the Planning Phase kick-off and setting the Project Baseline Budget?
- What percentage of enterprise projects were designated as Low, Medium, and/or High complexity?
- Estimated saving in time through the use of the project complexity determinations that reduce the required level of process rigor.
- Estimated saving in cost through the use of the project complexity determinations that reduce the required level of process rigor.
The project complexity determination methodology discussed in this white paper can be utilized to improve the efficiency and effectiveness of project delivery within an organization. It is important to tailor the methodology to the organization's project type, size, and environment to ensure that the methodology provides a clear means of determining the level of complexity required across the range of project types an organization is involved with. It is important to also integrate the methodology into the organization's project management processes and procedures to ensure that it will be utilized uniformly and effectively across the project lifecycle. If this is done correctly, an organization's required level of rigor for project initiation, planning, execution (monitoring and control), and closure can be more efficiently and consistently applied to improve project delivery efficiencies, reducing resource requirements, cost, and time without sacrificing quality. The selection of an appropriate complexity level early in the project planning phase and revisiting the selected complexity level prior to setting the project budget baseline will help ensure appropriate and effective tailoring of activities within each of the project management process groups as the project moves from planning into execution.
This manuscript has been authored by National Security Technologies, LLC, under Contract No. DE-AC52-06NA25946 with the U.S. Department of Energy. The United States Government and the publisher, by accepting the article for publication, acknowledges that the United States Government retains a non-exclusive, paid-up, irrevocable, world-wide license to publish or reproduce the published form of this manuscript, or allow others to do so, for United States Government purposes. The U.S. Department of Energy will provide public access to these results of federally sponsored research in accordance with the DOE Public Access Plan (http://energy.gov/downloads/doe-public-access-plan).
U.S. Department of Defense (DoD) Risk Management Guide
U.S Department of Energy (DOE) Guide 413.3-7, Risk Management
U.S. Department of Energy (DOE). (2011). Technology readiness assessment guide. DOE G 413.3-4A. Washington, D.C. Retrieved from www.directives.doe.gov.
© 2015, Thomas D. Andrews
Originally published as a part of the 2015 PMI Global Congress Proceedings – Orlando, Florida, USA