The bottom line on project complexity

applying a new complexity model

Introduction

As needs change and challenges grow, project management continues to evolve to meet 21st century demands. It takes expertise in complex project management (CPM) for an organization to thrive, indeed to survive, in today's environment rife with uncertainty. This paper is based on a research study that examined the new Project Complexity Model profiled in the PMI® David I. Cleland Project Management Literature Awarded book by Kathleen B. Hass (2009), Managing Project Complexity: A New Model. The book offers a method for dramatically improving the performance of today's complex projects and demonstrates how complexity thinking can complement conventional project management approaches.

The purpose of the research was to conduct a pilot study to evaluate the applicability of the Project Complexity Model in organizations using a new online instrument, and examine the current complexity levels of today's projects. The study examined the dimensions that increase project complexity, including team size, project duration, schedule, cost and scope flexibility, understanding of the problem and solution, stability of requirements, strategic importance, level of organizational change, inter-project dependencies, and political sensitivity; the techniques used to manage each complexity dimension; and each project/program's status for scope, schedule, budget, and business success.

The Nature of Complexity in the World of Business

“I think the 21st century will be the century of complexity.” Professor Stephen W. Hawking, PhD

According to Samuel J. Palmisano, Chairman, President and Chief Executive Officer, IBM Corporation in his introduction to the 2010 Global CEO Study, complexity is here to stay: “Inside this revealing view into the agendas of global business and public sector leaders, three widely shared perspectives stand in relief.

(1) The world's private and public sector leaders believe that a rapid escalation of “complexity” is the biggest challenge confronting them. They expect it to continue — indeed, to accelerate — in the coming years.

(2) They are equally clear that their enterprises today are not equipped to cope effectively with this complexity in the global environment.

(3) Finally, they identify ‘creativity’ as the single most important leadership competency for enterprises seeking a path through this complexity.”

In the 21st century, business processes have become more complex, more interconnected, interdependent, and interrelated than ever before. In addition, businesses today are rejecting traditional management structures to create complex organizational communities comprised of alliances with strategic suppliers, networks of customers, and partnerships with key political groups, regulatory entities, and even competitors. Through these alliances, organizations are addressing the pressures of unprecedented change, global competition, time-to-market compression, rapidly changing technologies, and yes, increasing complexity. As a result, business systems are significantly more complex than in the past; therefore, the projects that implement new business systems are more complex. Huge cost and schedule overruns have been commonplace in the past. To reap the rewards of significant, large-scale change initiatives designed to not only keep organizations in the game but make them a major player, we must find new ways to manage project complexity.

The Current State of Project Management Performance

It is no secret that our record of project performance is rife with failed and significantly challenged projects. This is true for virtually all types of projects. Examples abound—we offer just a few.

Public Works Projects Boston Big Dig: Went from estimates of $2.6B to a final price tag of $14.8B. Conceived in the 1970s and finished, more or less, in 2005, the Big Dig is modern America's most ambitious urban-infrastructure project, spanning six presidents and seven governors, costing $14.8 billion, and featuring many never-before-done engineering and construction marvels (Gelinas, 2007).
   
The Chunnel: 70% cost overruns on the original contract. The banks and the shareholders who financed the Channel Tunnel knew—or should have known—that the risks of building giant projects are very great. “No projects are harder to achieve,” a consultant advised the Channel Tunnel's five lead banks in 1984. “To work on giant projects is always exhausting and often demoralizing.” He ought to have added “bankrupting.” Despite the consultant's warning, the banks pressed ahead. They were under pressure from their governments, which wanted to do something grand without paying for it. They were under pressure from their good customers among the large construction companies to lend for something grand, and the banks also had internal pressure to keep up the pace of business. It became the largest privately financed project in history (Donlan, 1998).
 
Defense Acquisition Projects
 
Defense Acquisition R&D Projects: Average 42% over budget. Research and development costs of the Pentagon's weapons programs have increased 42% more than originally estimated, with an average delay of 22 months in delivering initial capabilities, according to a new assessment of the Defense Department's major acquisition programs in 2008 (Peters, 2009).
 
NASA
 
Mars Program: The mission's total cost is expected to run over by more than 30 percent. NASA's flagship mission to land a nuclear-powered, next-generation rover on Mars is facing development problems and ballooning costs that could threaten its scheduled launch next year. NASA Administrator Michael Griffin told a congressional hearing that engineers had to redesign the heat shield on the Mars Science Laboratory after tests showed the protective layer would not survive entry through the Martian atmosphere. The extra work is expected to add $20 million (euro13.23 million) to $30 million (euro19.84 million) to the $1.8 billion (euro1.19 billion) price (Chang, 2008).
 
Information Technology
 
IT projects are experiencing the highest fail rate in over a decade resulting in billions of dollars of waste, according to the Standish Group's report, “CHAOS Summary 2009.” “This year's results show a marked decrease in project success rates, with 32% of all projects succeeding that are delivered on time, on budget, with required features and functions” says Jim Johnson, chairman of The Standish Group, “44% were challenged which are late, over budget, and/or with less than the required features and functions and 24% failed which are cancelled prior to completion or delivered and never used” (CHAOS Summary, 2009).

In addition to these examples, we see complex projects all around us, e.g., for the World Bank and World Health Organization (addressing aids in Africa), for governments (addressing the current financial crisis and climate change), and for business transformation projects that in some instances have led to bankruptcy (mergers, acquisitions, re-engineering business processes and large IT systems modernization). The economic cost of failed and challenged projects is sizeable, often in the billions of dollars. For our economic competitiveness and for the security of the homeland, we simply must improve project performance. For these reasons, many industry leaders believe that CPM will be the next big thing in our quest to achieve better project performance. Potential benefits from the improved management of complex projects are significant. Not only will there be substantial direct returns to those organizations embracing CPM, there will also be an increase in the capacity of the global community to effect the strategic change required to meet the challenges of the 21st century.

What is Complex Project Management (CPM)?

Complexity is difficult to define. Some say complexity is the opposite of simplicity; others say complicated is the opposite of simple, while complex is the opposite of independent. Australia seems to be leading the charge to professionalize CPM. According to Queensland University of Technology (QUT), Brisbane Australia, the CPM strategic partner of the Australian Government's Defence Materiel Organization (DMO), complex projects are those that embody the characteristics listed here. Although there is no standard universally accepted definition for CPM, we can simply say it is the management of projects that have these characteristics:

  • Are characterized by uncertainty, ambiguity, dynamic interfaces, and significant political or external influences; and/or
  • Usually run over a period which exceeds the technology cycle time of the technologies involved; and/or
  • Can be defined by effect, but not by solution.

Trends in the World of Complex Project Management

Across the globe, awareness is emerging of the urgent need for improved delivery of projects that are complex, critical, often large and long, and in the multiple millions and sometimes billions of dollars. Research indicates that traditional, linear project management tools and techniques, while still necessary, are often insufficient to manage the complexities of 21st century projects. At the same time, it is apparent that the current workforce of project managers, business analysts, engineers and architects has limited capacity to meet the challenges posed by complex projects.

Competency Standard for Complex Project Management

Again we look to Australia to lead the way. Prior to engaging QUT, the DMO, in concert with the UK Ministry of Defence and an international team of executives experienced in managing very large projects, spent considerable energy reviewing and refining a professional competency standard as an extension to the existing A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (PMI, 2008), defining the essential competencies required for the successful leadership of complex projects, programs and portfolios. The draft Competency Standard for Complex Project Management was developed and authored by Dr. David H. Dombkins (Commonwealth of Australia, 2006). After an extensive review process in consultation with Industry via the Defence and Industry Advisory Council, and the Australian Institute of Project Management (AIPM), the final draft was approved by the Defence and Industry PM Council in June 2006. The College of Complex Project Managers in Switzerland will retain custodianship of the standard on behalf of the international project management community. The Competency Standard is comprised of nine competency views:

View 1 - Strategy and Project Management

View 2 - Business Planning, Lifecycle Management, Reporting and Performance Measurement

View 3 - Change and Journey

View 4 - Innovation, Creativity and Working Smarter

View 5 - Organizational Architecture

View 6 - Systems Thinking and Integration

View 7 - Leadership

View 8 - Culture and Being Human

View 9 - Probity and Governance

The International Centre for Complex Project Management (ICCPM)

ICCPM is a not-for-profit organization working to advance knowledge and practice in the management and delivery of complex projects (online at http://www.iccpm.com/). ICCPM (formerly College of Complex Project Managers) was officially launched in Rome on 10 November 2008 at the 22nd IPMA World Congress on Project Management. The International Centre for Complex Project Management was established in 2007 as part of an initiative that started in 2005 when Australian, UK and US Government bodies and defense industry organizations launched an initiative designed to improve the international community's ability to successfully deliver very complex projects and manage complexity across all industry and government sectors. There is a growing list of global corporate partners including BAE Systems, Boeing, Lockheed Martin, Mallesons Stephen Jaques, Raytheon and Thales.

The ICCPM has embraced a research and innovation strategy that will enable it to work with partners and the international community to fund, facilitate, and conduct applied CPM research. The goal is to share the research study findings with organizations across industry and government sectors, both nationally and internationally. With support from its corporate partners and its major sponsor, the Australian Government's DMO, the ICCPM has already made a significant contribution toward the development and delivery of the world's first Executive Masters in Complex Project Management (EMCPM) through QUT. The program is a master's curriculum that complies with the CPM standard and is designed to accelerate the career of accomplished traditional project managers into senior leadership positions in project-based organizations. The program focuses on the art of project leadership as distinct from the competency in the engineering and project management disciplines. In designing the EMCPM program, QUT worked extensively with a number of industry collaborators including the UK Ministry of Defense, USA Department of Defense, Lockheed Martin (Fort Worth), Boeing (St. Louis), Raytheon (Washington, DC) and BAE Systems (UK and Australia).

Study Methodology and Participant Demographics

Recognizing the pressing need for an understanding of project complexity and application of project complexity management strategies, this pilot study used a quantitative, nonexperimental, descriptive research design to evaluate the application of the Project Complexity Model introduced in the book, Managing Project Complexity: A New Model in the workplace; explore possible correlations among the complexity dimensions, management techniques, and project outcomes; and test the newly developed instrument. The project complexity and project status scales exhibited moderate to good reliability (α = .621 to .898), strong content validity, and low to moderate concurrent validity (Sr = .403, p < .001) with the pilot group.

Study participants were in leadership roles on a current or recently completed project/program and, if on a current project, their projects must have received funding, completed planning, and entered the execution phase. Nonrandom, convenience sampling (e.g., Project Management Institute [PMI®] chapters, online professional groups, and online publications) was used to recruit participants. Sixty-six participants who completed the online instrument were included in the final pilot analyses. Most participants were project managers (44%) followed by program managers (29%), complex project managers (17%), and business analysts (4%). The majority of participants had five or more years of experience (71%) and worked full-time on their projects/programs (91%). Forty-seven percent had achieved Project Management Professional (PMP®) certification.

The industries participants represented included Financial Services (42%); IT & Telecommunications (15%); Information Systems (5%); Pharmaceutical (5%); Aerospace & Defense, Consulting, and Government (4% each); Healthcare and Utilities (3% each); and Oil, Gas, & Petrochemical and Insurance (1% each). The greatest percentage of participants worked in organizations with annual revenues greater than $50 million (82%) and more than 5,000 employees (61%). Project/program types included IT application development (26%), IT application enhancement (17%), equipment or system installation/upgrade (17%), and business process reengineering and improvement (17%).

The Project Complexity Model

There are many different ways projects can become both complicated and complex. The business problem might be difficult to define. The solution may be elusive and difficult to determine, describe, or grasp. Business boundaries might be unclear. Business process relationships are likely to be non-linear and contain multiple feedback loops. Today's complex business systems will change over time, and therefore need to be dynamic, adaptive, and flexible. Some business systems are nested; i.e., the components of the system may themselves be complex. There are a number of dimensions of project complexity, including: team size and composition, project duration, schedule, cost and scope flexibility, clarity of the problem and solution, stability of requirements, strategic importance, level of organizational change, inter-project dependencies, political sensitivity, and unproven technology. The Project Complexity Model presented here was used by participants to evaluate project size, complexity, and risk and determine the specific dimensions of complexity that were present on their projects. See Exhibit 1 – Project Complexity Model 1.0.

Project Complexity Model 1.0

Exhibit 1. Project Complexity Model 1.0

Study participants applied the complexity model on their current projects/programs using the formula presented below in Exhibit 2.

Project Complexity Model Formula

Exhibit 2. Project Complexity Model Formula

Applying the Complexity Model

Project Complexity Diagnosis Example

Exhibit 3. Project Complexity Diagnosis Example

Applying complexity thinking to projects involves using the complexity profile based on the Project Complexity Model to diagnose project complexity, select appropriate methods and techniques, assign appropriate project leaders, and determine suitable complexity management strategies based on the complexity diagnosis. See Exhibit 3 – Project Complexity Diagnosis Example. Study participants applied the complexity model on their current projects/programs; 76% of the projects were highly complex projects/programs and 24% were moderately complex projects.

Select the Project Cycle Based on the Project Profile

Based on the project profile, the project manager first determined the appropriate project cycle to use. All projects have a cycle, a sequence of stages through which the project passes. Typical cycles have a series of periods and phases, each with a defined output that guides research, development, construction, and/or acquisition of goods and services (Mooz, Forsberg, & Cotterman, 2003). As projects have become more complex, iterative project cycles that stress agility, experimentation, adaptation, and solution evolution have emerged to address the complexity dimensions.

Even though 76% of the projects were highly complex, just over half of the participants indicated they used the Traditional Linear Model (TLM) project cycle (53%) followed by the Iterative Model (IM) cycle (26%) and Adaptive Model cycle (14%). For those using a TLM, 77% used Waterfall or Modified Waterfall project cycles. For those using an IM, 65% used Incremental Delivery. For project/programs rated as highly complex, 46% were using a TLM project cycle and 28% were using an IM project cycle. This indicates that organizations may be slow to adopt the iterative, adaptive models that are needed when dealing with complexity and uncertainty.

Select Appropriate Management Techniques Based on Complexity Dimensions

Projects sometimes fail because of misapplication of good methods and techniques. Applying complexity thinking to determine the appropriate techniques to use based on the complexity dimensions present is the key to success when managing complex projects. Successful managers of complex projects use situational project management by adapting their leadership style, and the project management, systems engineering, and business analysis techniques to manage the complexity dimensions that exist. There are many strategies that can be used to complement our traditional project management techniques. A few of the most effective strategies are listed below.

Management Strategies for Long-Duration Projects

  • Evolutionary development—Develop, and if possible, deliver the solution in increments, applying lessons learned from each increment into the next iteration and constantly testing for alignment with business objectives.
  • Time and cost management—Delivering on schedule is one of the main challenges for a long-duration project due to the enormous amount of work involved. Implement a rigorous process to track progress and control delivery.
  • Rapid Application Development (RAD) —If requirements are understood and scope is contained, RAD allows greatly abbreviated development timeline.
  • Multiple estimating methods—Estimating is hard, very hard. Don't rely on one estimating technique.
  • Attention to team composition and process—As the project drags on and fatigue sets in, project managers should look at both team composition and team processes to maintain continued motivation among members. Build your expertise in leading high-performing teams.
  • Lean development techniques—Although the project is complex, do not be tempted to apply more rigor than necessary. Continually verify that the project is building the minimum viable solution. Use the motto: “Barely sufficient is enough to move forward.”

Eighty-three percent of the projects/programs had durations and budgets greater than six months and $750K. The mean duration and budget for the projects/programs included in the study were 23 months and $15.9 million.

Participants indicated the most frequent strategies they used to manage long-duration projects/programs included: Establishing an expert leadership team (61%), applying rigorous time and cost management practices (53%), applying rigorous and continuous risk management (43%), and using progressive elaboration and rolling wave planning (38%).

Complexity Management Strategies for Large, Dispersed, Culturally Diverse Project Teams

  • Great teams…you need one—When structuring the project, establish a core project leadership team, and multiple core sub-project teams that are small (four to six people), dedicated full-time to the project, co-located (preferably in a workroom), highly trained, and multi-skilled. These core teams will augment their efforts by bringing in subject matter experts and forming sub-teams as needed. Select team members not only because of their knowledge and skills, but also because they are passionate and love to work in a challenging, collaborative environment.
  • Team leadership—The project manager needs to learn how to delegate and decide what roles and responsibilities to keep since he or she is managing through others on complex projects. In addition, the project manager needs to determine what procedures to standardize across sub-teams and what to allow others to tailor. For example, the overall program may use a variant of Waterfall Model with highly structured phases and decision gates, but allow individual projects to use agile techniques to achieve their individual objectives.
  • Contractor team management—Add contract terms for managing the contractor team (e.g., joint planning sessions, integrated project schedules, EVM, control gate reviews, award fees, and penalties). Conduct regular progress evaluations and periodic reviews of contract terms and conditions.
  • Virtual team management—For complex projects involving virtual team members distributed globally, communication and collaboration are critical. Communication manners, methods, and frequencies are crucial factors in determining the success or failure of virtual teams, so develop a communication strategy early in the project. There is no substitute for face-to-face sessions when the team is in early formative stages or when the team is in crisis. Virtual teams can be more productive than traditional teams when managed well, so use them as a strategic advantage.
  • Collaboration—Involve all core team members in the project planning process and seek feedback often to continually improve the performance of the team.

Less than 10% of the projects/programs had highly complex teams. Most participants (70%) indicated their teams were competent, experienced, and had worked together in the past. Participants indicated the most frequent strategies they used to manage dispersed, culturally diverse teams included: Conducting face-to-face meetings for key planning and decision-making (85%), creating a culture of collaboration and open communication (64%), applying standard procedures and tools (61%), and leveraging the power of the team (55%).

Complexity Management Strategies for Urgent Projects with Fixed Deadlines and Inflexible Demands

  • Flexible high-performing team members—High-performing team members must have the skills, information, and motivation to adapt to change quickly.
  • Time-boxed schedule—While we all hate fixed deadlines, a time-boxed schedule increases the level of urgency felt by the project team and forces decisions to be made quickly and efficiently.
  • Minimize scope—Eliminate all “nice-to-haves” and unnecessary features. Deliver the minimal viable solution.
  • Stage-gate or milestone management—Structure the schedule into a series of milestones or releases marked by the completion of a major deliverable. Conduct control-gate reviews at each milestone to ensure the quality of the deliverables and to move quickly into the next stage. Milestone management frees the team to focus on the work needed to get to the next milestone only.

Twenty percent of participants indicated their projects/programs had overly-ambitious schedules and scopes and fixed, aggressive deadlines. Most participants (65%) indicated their budget, schedule, and scope were achievable and could undergo minor variations. Participants indicated the most frequent strategies they used to manage projects/programs with fixed deadlines and inflexible demands included: Conducting face-to-face decision-making (79%), applying communication strategies to maintain the sense of urgency (61%), using time-boxed scheduling to force decision-making (42%), and conducting decision-gate reviews (41%).

Complexity Management Strategies for Ambiguous Business Problems, Opportunities, Solutions

  • Business analysis—Use business modeling and requirements-understanding modeling to clarify the current and target states of the business.
  • Value-chain analysis—Describe processes within the organization and evaluate the value each activity contributes to the organization's product or services. The goal is to establish the ability to perform particular activities and to manage the interrelationships between the activities that result in a source of competitive advantage.
  • Root-cause analysis—Conduct rigorous root cause analysis to determine the underlying business problem.
  • Feasibility studies—Brainstorm to identify all potential solution options and conduct feasibility analyses (analyze technical, operational, economic, cultural, and legal feasibility) for each solution option to determine the highest-value alternative.
  • Feature-driven development—Use when the solution can be delivered incrementally. The goal is to provide value early, implement the highest value features first, and adapt from the learnings of prior increments.
  • Edge-of-chaos management—In some circumstances, when a project seems to be operating on the edge of chaos, the team is still brainstorming, creating, studying, examining ideas, and evaluating complexity and dependencies to select the most valuable, most elegant, and least complex solution. Encourage lots of experimentation and prototyping to bring the solution into focus. In rare cases, project teams design and develop more than one solution in order to prove which one is truly the optimal approach.

Less than 10% of the projects/programs involved problems with unclear business objectives, ambiguous or undefined problems/opportunities, and difficult to define solutions. Most participants (60%) indicated their objectives, problems, and solutions were somewhat clear and defined. Participants indicated the most frequently used strategies to manage ambiguous business problems, opportunities, and solutions included: Focusing on clear business objectives (61%), conducting risk analysis (55%), using creative decision-making (44%), and fostering team optimization (44%).

Complexity Management Strategies for Volatile Requirements

  • Professional business analyst—Critical complex projects need a full-time, seasoned business analyst (BA), and will likely need a BA team to elicit, analyze, specify, validate, and manage requirements.
  • Agile analysis—Agile analysis is a highly iterative and incremental process, where developers and project stakeholders actively work together to understand the domain, identify what needs to be built, and prioritize functionality (Ambler, 2007).
  • Test-driven requirements development—Build the test case before or concurrent with documenting requirements.
  • Effective scope change management—Avoid spending too much time up front. Uncover 80% of requirements in 20% of the time. Expect, plan for, and welcome changes that add value. Reduce the cost of change by using incremental development methods. Do requirements and early design concurrently and collaboratively.
  • Iteration—Iteration is the best defense against unpredictability.
  • Visualization and communication—Visualize and communicate requirements in the right way to the right audience.
  • Appropriate level of detail—Know what needs to be fixed (defined at the front end), and what can be flexed (defined at a summary level initially).
  • Interdependency management—Set up a requirements integration team to manage requirements relationships and dependencies.

Twenty percent of participants indicated their projects/programs had poorly understood, volatile, and undefined requirements with inadequate customer support. Most participants (62%) indicated basic requirements were understood, but were expected to change, and had moderately complex functionality. Participants indicated the most frequent strategies they used to manage volatile requirements included: Involving customers throughout the project (86%), managing requirements change (73%), and communicating the right message to the right audience to continually validate requirements (62%).

Complexity Management Strategies for Highly-Visible Strategic Projects

  • Executive oversight—Build a framework for effective decision-making and project oversight, focused on realizing the project benefits, achieving strategic goals, addressing risks, managing change, and setting expectations.
  • Political management strategy—Assess the political environment. Define problems, solutions, and action plans to take advantage of positive influences, and to neutralize negative ones.
  • Public relations—Find ways to promote yourself and your project.
  • Benefits management—Continually assess the value and organizational impact of the project benefits.
  • Virtual alliance management—Strategic projects involve alliances with suppliers, customers, key political groups, regulatory entities, and even competitors. When seeking out partners, look for the best-in-class competencies to build high-quality, specific products or services in the shortest period of time.

Forty-two percent of participants indicated their projects/programs had inadequate executive support, major political implications and stakeholder conflicting expectations. Participants indicated the most frequent strategies they used to manage highly visible strategic projects/programs included: Continuously managing stakeholders and their expectations (74%), managing customer relationships (68%), establishing strong executive sponsorship and oversight (61%), and using an executive steering committee (48%).

Complexity Management Strategies for Large-Scale Organizational Change (Kotter, 2002)

  • A sense of urgency—Work with stakeholder groups to reduce complacency, fear, and anger over the change, and to increase their sense of urgency.
  • The guiding team—Build a team of supporters who have the credibility, skills, connections, reputations, and formal authority to provide necessary leadership.
  • The vision—Use the guiding team to develop a clear, simple, compelling vision, and set of strategies to achieve the vision.
  • Communication for buy-in—Execute a simple, straight-forward communication plan using forceful and convincing messages sent through many channels.
  • Empowerment for action—Use the guiding team to remove barriers to change.
  • Short-term wins—Wins create enthusiasm and momentum. Plan the delivery to achieve early successes.

Sixty-five percent of participants indicated their projects/programs were large-scale organizational change efforts impacting the enterprise and transforming the organization. Participants indicated the most frequent strategies they used to manage large-scale organizational change included: Communicating constantly for buy-in (76%), managing dependencies (68%), creating a sense of urgency (52%), and delivering short-term wins (47%).

Complexity Management Strategies for Complex Technology

  • Vendor partnerships—If the technology planned for use is unproven, establish a partnership with the technology vendor that assigns them a significant part of the risk.
  • Rapid prototyping—Quickly build the riskiest component of a solution first to prove an idea is feasible.
  • Technical solution dependency management—When the technical solution is complex, it is prudent to divide the development into a core system (the operative part of the system), and special components (separate from the core, adding functionality in components). Further divide the core system into extension levels, building the foundation level first and then extending system capabilities incrementally. As the core system is developed and implemented, different technical teams work on specialized functional components. The goal is to build the specialized components with only a one-way dependency to the core system; therefore, specialized components are independent of each other and can be created in any order or even in parallel (Lippert, Roock, Wolf, & Züllighoven, 2002).

Fifteen percent of participants indicated their projects/programs involved groundbreaking innovation, immature and unproven technology, or complex legacy integration. Most participants (64%) indicated their solutions were difficult to achieve and were new to the organization, with moderately complex integration. Participants indicated the most frequent strategies they used to manage technology complexity included: Setting up integration teams (45%), structuring the effort into micro-projects (45%), establishing the right balance between discipline and agility (36%), and involving a seasoned IT architect (33%).

Complexity Management Strategies for Risks, Dependencies, and External Constraints

  • Cross-project dependency/external constraints management—Assign someone from the core program leadership team as the dependency/constraint owner, to liaise with the entity that is responsible for creating the deliverable or imposing the constraint.
  • Real risk management—In practice, few projects perform adequate risk management. For complex projects, it is essential to identify risks every month and reexamine risk responses to ensure the management of known risks and the identification of new risks.

Fifteen percent of participants indicated their project/programs involved high risk, multiple external dependencies and significant exposure. Most participants (44%) indicated their project/programs involved moderate risk with some dependencies and acceptable exposure. Participants indicated the most frequent strategies they used to manage risks, dependencies, and external constraints included: Continuously managing risks (77%), managing uncertainties (77%), assigning owners to dependencies (59%), and conducting contract negotiations (38%).

Complex Project Management Competencies

It takes years to develop the qualities to successfully manage complex projects. It requires leadership qualities resulting from a combination of professional and personal experiences and personality traits

Only a limited number of project managers will ever be able to handle the most complex projects. High-potential candidates should be identified early, and put on a development fast track. Competencies required to deliver 21st century projects successfully are emerging. See Exhibit 4: Project Management Competencies are in Transition.

Project Management Competencies are in Transition

Exhibit 4. Project Management Competencies are in Transition

Seventy-one percent of participants indicated their project/program included a leadership team of senior-level experts who shared the leadership role. Most common roles on the leadership team included program manager (58%), lead technologist (45%), business visionary (39%), and business analyst (26%). Other roles on the leadership team included subject matter expert, enterprise architect, solutions architect, project sponsor, functional managers, vendor pms, and test manager.

Fifty-six percent of the projects/programs included a senior project/program manager and 35% had a senior business analyst (BA) managing the requirements; however, 39% of the projects/programs did not have a BA. Participants indicated their organizations’ project/program manager career paths consistently included three levels (project manager, senior project manager, and program manager), and it appears the role of CPM may be emerging. However, participants reported that BA career paths included only two levels (BA and senior BA).

Linking Project Complexity and Project Results

Little research has been conducted on the relationship between project complexity and project results. The presence of many highly complex dimensions make projects more difficult to manage and may be related to the lower performance outcomes cited earlier in this paper.

Participants rated their projects/programs for schedule, budget, and scope status, and for delivering expected business benefits. Forty-seven percent of participants indicated their projects/programs were challenged for schedule, budget, and scope. For these challenged projects/programs, 68% - 87% were greater than 20% over for schedule, budget, or scope. Twenty-one percent of participants indicated their projects were challenged for delivering forecasted business benefits. The business benefits that would deliver at least 20% less benefit included: Less reduction in cost (64%) and less improvement in efficiency (57%).

The top four dimensions that increased the complexity on participants’ projects/programs included: budget and duration, strategic importance, organization impact, and risks and external dependencies. A statistically significant relationship was found between an increase in overall complexity rating and greater challenge for schedule, budget, and scope; however, no statistically significant relationship was found between overall complexity rating and delivery of business benefits.

Further analyses revealed statistically significant relationships between more challenged schedule, budget, and scope and delivery of less business benefits for projects/programs with:

  • Ambiguous problems, business opportunities, and solutions
  • Volatile requirements
  • Strategic importance.

Study Conclusions

Based on the pilot analyses, the Project Complexity Model exhibits moderate applicability in the workplace. The results indicate that complexity may be an important consideration in achieving project/program success, and complexity is an important consideration when selecting project cycles, methodologies, and project/program management strategies. Reliability estimates indicate that participants are applying the complexity-dimension rating scale somewhat consistently; however, the lower concurrent validity estimate may indicate participants’ perceptions of the complexity of their typical project/program assignments are not always consistent with the complexity rating obtained when applying the model criteria. The descriptions for each complexity dimension may be somewhat unclear or the model may lack the sensitivity to capture differences between moderately and highly complex projects/programs, thus requiring an additional level of complexity to adequately differentiate the dimensions.

Therefore, the complexity model and instrument should be revised to improve workplace applicability and achieve higher reliability and validity estimates. Future research and model testing should use larger industry-specific participant groups for comparison and should continue to evaluate the impact of project complexity on project results and how to integrate complexity management into traditional project management approaches.

Conclusion—Complexity Matters

It is clear that projects are becoming more complex and that complexity matters. Project complexity is related to project performance outcomes; however, project and program managers may not be applying the advanced techniques necessary to be successful. Therefore, the project management industry is correct in pursuing a higher level of complex project management maturity. The study indicated that the model may be useful, but is not yet comprehensive and complete. Based on the research findings, the model has been recalibrated. The key improvements to the Project Complexity Model 2.0 include:

  • The addition of a fourth project profile, Highly Complex Programs or “Megaprojects”
  • Rewording and tightening the verbiage that describes the criteria used to diagnose a project's complexity for each complexity dimension.

References

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2010, Kathleen B. Hass
Originally published as a part of 2010 PMI Global Congress Proceedings – Washington DC

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