3 - dannny walsh_23 tocpa_usa 21-22 march 2016
TRANSCRIPT
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
1/27
23rd International Conference of the
TOC Practitioners Alliance - TOCPA
www.tocpractice.com 21-22 March, 201, Tennessee, !"A
Critical Chain Project Management:
Assessing the Efficacy & Feasibility
Daniel P. Walsh, Exepron, USA
March, 2016
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
2/27
After a successful career in leading large organizations including Director of Operations for a five billion
dollar enterprise and CEO for a $750 million company, in !!" Daniel #als founded %ector &trategies, a
'eory of Constraints, ('OC) focused company* +e is te cofounder of E-epron. a /st Century proect
management, &aa& cloud based, real time collaborative, critical cain soft1are solution*
+e is a recognized e-pert in developing and implementing po1erful strategies tat 2uic3ly and
dramatically improve mar3et presence and profitability* +e as 1or3ed 1it companies in te
sipbuilding, parmaceutical, construction, engineering4 soft1are, manufacturing, aerospace defense
industries* 6umerous ortune 00 companies are among is clients, including 'e-tron, 89:, 9oeing,
;oc3eed and te
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
3/27
700 Developers on E-epron
&tate of
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
4/27
'raditional ?: :etods
Only >@ percent of proects finis on time and 1itin
budget, according to ne1 researc by ?roect
:anagement 8nstitute (?:8)*
Organizations continue 1asting $0! million for
every $ billion invested in proects and programs,B
according to :ar3 A* ;angley, president and CEO of
te ?roect :anagement 8nstitute*
#itin te last year, onl# half of pro$ects finished on
time and 55 percent finised 1itin teir initialbudgets, according to te /,@00 proect management
leaders surveyed*
?:8 =eport /0Annual &urvey of ,00 accredited member respondents
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
5/27
'raditional ?: ?erformance
0,"! proects
/00 Companies
>0 Countries
50 failure =ate
Price %aterho&se Coopers "&r'e#
?rice1aterouseCoopers, 1ic revie1ed 0,"0 proects from /00 companies in >0 countries
5
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
6/27
:onumental 9udget 9usters
% Over Budget
Years Late
Over Budget US$
ttpsFFpodio*comFsiteFbudgetbustersGm3tHto3I>=3::J##f!1s=ols2vKLKMon+pfsM"7ugtfOvr?
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
7/27
CC?: A1areness is +ig
?:8 =eport /0
,00 member respondents to te annual survey*
7
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
8/27
Cost %ersus 'rougput
Cloud
ocus on ig localefficiencies, e*g* manage
variances
ocus on
meeting customer
scedules
Control
Costs
:a-imize
'rougput
&uccessfully
run ourbusiness Conflict
In order to …
In order to …
In order to …
… we must …
… we must …
… we must …
… we must …
… because :
… because :
It is NOT possible to maximize throughputperformance by achieving high localperformance everywhere
The best way to lower globalcost is to lower local cost
@Source: Eliyahu Goldratt
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
9/27
Evaluate according to te
local impact
6ot evaluate according to
local impact
Control
Costs
?rotect
'rougput
:anage#ell Conflict
In order to …
In order to …
In order to …
… we must …
… we must …
… we must …
… we must …
… because :
… because :
;ocal 8mpact is 6O' e2ual to te
impact on te organization
;ocal 8mpact 8& e2ual to te
impact on te organization
Cost %ersus 'rougput
Cloud
!Source: Eliyahu Goldratt
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
10/27
'o #at to Cange G
Control
Costs
?rotect
'rougput
:anage#ell
In order to …
In order to …
In order to …
… we must …
… we must …
… because :
… because :
+ave one set of
metrics to ma3e
global and local
decisions
#e are using 'rougput measurements to
ma3e operational and financial decisions
Cost %ersus 'rougput
Cloud
0
#e are using 'rougput measurements to
ma3e operational and financial decisions
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
11/27
'e ?roblem
The 3 Pillars of Project Management Solution
• &cedule Q 'rougput #orld metrics• &cope Q 'rougput #orld metrics
• Cost Q 'rougput #orld metrics
ost creates a !ilemma for PM
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
12/27
'e ?roblem
• CC?: 1ill (conceptually) positively impact cost by
significantly improving management of &cedule and&cope R :aybeS
• CC?: metodology is a 'rougput focused solution
and 1as not intended to manage Cost #orld :etrics• Attempts at applying 'rougput tecni2ues to
reconcile Cost #orld metodology 1it 'rougput
metodology in CC?: ave failed
/
"#Y
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
13/27
'e ?roblem
onventional &&roach
'e Cost Duration allocated at te tas3 level consists of
• 'e 'ouc 'ime 1or3 ours to complete te tas3
• Embedded ?rotection against %ariability
• An industry recognized efficiency factor
• 'otal 'ime 'as3 Duration 'otal Cost
>
PM &&roach
'e Cost Duration allocated at te tas3 level consists of
• 'e 'ouc 'ime Duration to complete te 'as3
• E-tract &afety from tas3s
O'(L)T
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
14/27
CC?: ?arado-
• :any professional organizations, companies andindividuals believe CC?: is a alf ba3ed solution
• :any companies 1ill not even consider CC?:
• Conflict 1it Cost :etrics during 8mplementation
• 9loc3s support from many sta3eolders
• Jeopardizes &ustainability &ource of :any failedimplementations
)nertia * Since PM is Through&ut focused then
all metrics must +e Through&ut metrics
"#Y
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
15/27
'e &corecard
• CEO, 9oard, CO, Comptroller, 'reasurer, Auditors4
Contract Administrators, inancial Analysts andCustomers using te TOfficialU metrics to evaluate
proect performance
• Even if &cedule &cope is on trac3, may be inconflict 1it inancial Oversigt and Compliance
re2uirements
• CC?: not providing Critical Cost 8nformation neededby Decision :a3ers
5
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
16/27
Earned %alue :anagement
"
Delay
'imeTime
C o s t
(&d)et at Completion
Toda#s*ate
+arned
al&e
Planned
al&e
Act&al
Cost
Cost
%ariance
&cedule
%arianceost "orld
?ast uture
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
17/27
=ole of :etrics
Different 6eeds Q 6eed Different :etrics7
Through&ut "orld
Source, ---./0e&ron.com
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
18/27
=ole of :etrics
+ave one set of
metrics to ma3eglobal and local
decisions
• Assumption &ince CC?: is a 'rougput &olution
ten all metrics must be 'rougput metrics
• Assumption must be callenged
@
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
19/27
Einstein on &implicityEveryting sould be made assimple as possible, but not simpler*B
Oc3amVs =azor
#illiam of Oc3am (c* /@7Q>7), an Englis ranciscan friar,
scolastic pilosoper and teologian*
Among competing ypoteses tat predict e2ually 1ell, te
one 1it te fe1est assumptions sould be selected*B
&8:?;8C8'
!
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
20/27
'e &olution
• :ust +ave 'rougput :etrics• :ust ave Cost :etrics
• :ust be 8ntegrated into te &olution
• or te first time, CC?: solution 1ill ave
interactive Operational and ?erformance metrics
providing +olistic vie1 of ?ortfolio of ?roects
/0
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
21/27
:obius Effect
/
A
AA
ost "orld and Through&ut "orld
inside the the same PM solution
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
22/27
'o #at to Cange G
Control
Costs
?rotect
'rougput
:anage
#ell
In order to …
In order to …
In order to …
… we must …
… we must …
… because :
… because :
+ave one set of
metrics to ma3e
global and local
decisions
#e are using 'rougput and Cost measurements to
ma3e operational and financial decisions
Cost %ersus 'rougput
Cloud
//
#e are using 'rougput and Cost measurements to
ma3e operational and financial decisions
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
23/27
&olution
/>
• =ender unto Caesar te tings tat are Caesar R , instead of
perpetuating and callenging te universally accepted precepts ofcost accounting, rater embrace tem and incorporate into CC?:
tin3ing*
• 'e CC?: tools must develop tis capability, reconciling and
mapping all of te costs and earned value directly to a specific tas3
in te proectUs CC?: scedule* 'is becomes an integral part of
tePlanning phase – Scheduling phase – Execution phase.
Source: CCP: !ssessing the E""icacy and #easibility$ %aniel P. &alsh' www.exepron.com
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
24/27
Collaborative 9usiness
&olution
/
• CC?: must not be limited to ust ?lanning, &ceduling
and E-ecution of te 1or3 content
• :ust e-pand and embrace te inancials Q Cost and=evenue
• Offer value to all of te &ta3eolders
• CC?: must become a ()(!* 9usiness &olution• CC?: as te uni2ue potential to permeate
trougout te entire Enterprise
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
25/27
:etcalfUs la1
6 e t 1 o r 3 < s e f u l n e s s
6et1or3 6odes
The value of a network is proportional to the
square of the number of users of the system (n2)
/5
+eal (ime In"ormation
!cross the Enterprise
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
26/27
&olution
/"
The cost and earned value are calculated in the ost -orld and
ma&s to the schedule that is calculated in the Through&ut -orld
• #e no1 can no1 mange te tree pillars* 'e cost data can bedirectly mapped bac3 to te CC?: tas3* 8t migt be elpfulvisualizing t1o parallel re2uirements tat 1ill ave to beupdated in e-ecution*
• #e 1ill update te cost, earned value, (revenue) and update te
time remaining in te tas3* 'e additional effort is very minimal
and te benefits enormous*
So1 -hat shall -e call this addition to the PM
a&&roach Let2s call it PM Pro.
-
8/18/2019 3 - Dannny Walsh_23 TOCPA_USA 21-22 March 2016
27/27
&olution
Thro&)hp&t
Metrics
Thro&)hp&t
Metrics
CostMetrics
PMPO4
/7